FMN vs SCHQ
Federated Hermes Premier Municipal Income Fund vs Schwab Long-Term US Treasury ETF
Quick Verdict
SCHQ has a lower expense ratio. FMN delivered stronger 1-year returns. SCHQ offers more diversification with 98 holdings.
Side-by-Side Comparison
| Metric | FMN | SCHQ | Winner |
|---|---|---|---|
| Expense Ratio | 0.75% | 0.03% | |
| AUM | $16M | $806M | |
| Dividend Yield | 4.29% | 4.73% | |
| Holdings | 150 | 98 | |
| YTD Return | +3.14% | -3.33% | |
| 1Y Return | +8.79% | -1.50% | |
| 3Y Return (annualized) | +6.65% | -0.01% | |
| 5Y Return (annualized) | -2.48% | -6.86% | |
| Volatility (annualized) | 14.7% | 13.5% | |
| Max Drawdown | -53.4% | -46.7% | |
| Fund Family | Federated Hermes | Charles Schwab Asset Management | |
| Category | Tax Preferred | Fixed Income | |
| Inception | Dec 20, 2002 | Oct 10, 2019 |
FMN vs SCHQ Performance
Federated Hermes Premier Municipal Income Fund (FMN) is a ETF from Federated Hermes and Schwab Long-Term US Treasury ETF (SCHQ) is a ETF from Charles Schwab Asset Management. Over the past year FMN returned +8.79% while SCHQ returned -1.50%. Year to date, FMN is up 3.14% versus a loss of 3.33% for SCHQ.
Over three years, FMN compounded at +6.65% per year against -0.01% for SCHQ; over five years the annualized figures are -2.48% and -6.86% respectively. Across the full 7-year window we track, FMN has the edge at -0.22% annualized vs -4.51%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FMN has been the more volatile fund, with annualized monthly volatility of 14.7% compared with 13.5% for SCHQ. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -53.4% for FMN and -46.7% for SCHQ. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.63. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FMN charges 0.75% per year while SCHQ charges 0.03%. On a $10,000 position that is $75 vs $3 annually, a gap of $72 per year that compounds over a long holding period. On income, FMN currently yields 4.29% against 4.73% for SCHQ.
Frequently Asked Questions
Which is cheaper, FMN or SCHQ?
FMN has an expense ratio of 0.75% while SCHQ charges 0.03%. SCHQ is the cheaper option. On a $10,000 investment, that is $72 per year of difference.
Which performed better, FMN or SCHQ?
Over the past year FMN returned +8.79% vs -1.50% for SCHQ, so FMN leads on 1-year performance. Over the longest common window we track (7 years), FMN annualized -0.22% vs -4.51% for SCHQ. Past performance does not guarantee future results.
Which is riskier, FMN or SCHQ?
FMN has been the more volatile fund at 14.7% annualized versus 13.5% for SCHQ. Worst drawdown: FMN -53.4% vs SCHQ -46.7%.
Should I hold both FMN and SCHQ?
FMN and SCHQ have a monthly-return correlation of 0.63, so combining them can provide real diversification depending on your allocation goals.
Which pays a higher dividend, FMN or SCHQ?
FMN yields 4.29% while SCHQ yields 4.73%, so SCHQ currently pays the higher dividend yield.
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