SCHR: At Least Avoiding Credit Pressures From Oil-Led Reinflation

Valkyrie Trading SocietyInvesting Group LeaderFollow5ShareSavePlay(9min)CommentsSummaryThe Schwab Intermediate-Term U.S. Treasury ETF faces heightened duration risk amid inflationary pressures from ongoing geopolitical conflict.SCHR’s nearly 5-year duration makes it highly sensitive to shifts in the US yield curve, with the recent 0.4% YTM uptick causing a 2% price drawdown.Fed rate cuts are off the table while oil logistics remain disrupted, sustaining a 'higher for longer' rates environment and pressuring intermediate Treasuries.Treasuries lack optionality in volatile macro conditions, and duration is an underwhelming proposition in a fat-tailed, supply shock-affected environment.Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More » Torsten Asmus/iStock via Getty Images The Schwab Intermediate-Term U.S. Treasury ETF (SCHR) is a short- to intermediate-duration fixed-income Treasury ETF, so theoretically no credit considerations are needed here. Therefore, the focus is on the macro effects from the big delta of theThis article was written byValkyrie Trading Society5.53K FollowersFollowThe Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.