Fixed Income: U.S. Government Treasury Intermediate

ITE Top Performer Intra-day
Price $59.78
Today’s Change -0.05%(-0.09)
3:56pm 01/13/2017
SCHR Bottom Performer Intra-day
Price $53.52
Today’s Change -0.12%(-0.22)
4:00pm 01/13/2017
  • Overview
  • Efficiency
  • Tradability
  • Fit

ETF.com Insight

The best intermediate Treasury fund for you depends on your definition of “intermediate.” Each of the six funds in this segment defines it differently, making it likely that atThe best fund for you depends on your definition of "intermediate." least one of them fits your needs. The broadest fund, ITE, holds Treasuries with 1-10 years remaining until maturity. The next broadest, SCHR, cuts out the shorter-term securities to only hold Treasuries that will mature in the next 3-10 years. IEF goes even further, limiting its portfolio to bonds expiring in 5-10 years. In contrast, IEI and FIVZ each cut out the shortest- and longest-term bonds to focus mostly on those maturing in the next 3-7 years. The last fund, TENZ, goes outside the realm of our 1-10-year benchmark with a portfolio of Treasuries with 7-15 years remaining. ITE matches the market best in our view, and is our Analyst Pick for the segment. Meanwhile, IEI’s stellar Efficiency and Tradability, combined with its decent Fit, earns it a spot on our Opportunities List.
The six funds all charge similar expense ratios, ranging from 10 to 15 bps. However, tracking and trading costs are better indicators of all-in costs in this segment. Most of the funds track their underlying indexes very closely. Trading differences are similarly severe. IEF and IEI lead the segment with multiple millions of dollars trading most days at very narrow spreads. ITE and SCHR are less liquid, but can also be traded with relative ease. TENZ and FIVZ, however, trade less than $1M on most days. (Insight updated 01/16/17)

All Funds (4)

ITE $508.32 M 508320433.6053 Best Fit

A 100
E
96
96
T
95
95
F
100
100

IEI $6.02 B 6019904800 3-7 year maturities

A 73
E
95
95
T
99
99
F
73
73

SCHR $811.9 M 811903089.45 Tracks poorly

A 71
E
96
96
T
99
99
F
71
71

IEF $7.23 B 7227825450 7-10 year maturities

A 55
E
95
95
T
100
100
F
55
55

ETF.com Grade as 01/05/17

Fixed Income: U.S. Government Treasury Intermediate

1 Year Total Return NAV
Performance  [as of 01/12/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: Bloomberg Barclays Intermediate U.S. Treasury Index--------------
A 99.537645ITE508320433.6053ITESPDR Bloomberg Barclays Intermediate Term Treasury ETF0.41%-1.48%0.28%0.51%1.47%1.00%--
A 73.034212IEI6019904800IEIiShares 3-7 Year Treasury Bond ETF0.47%-1.74%0.38%0.56%1.96%1.27%4.12%
A 70.874972SCHR811903089.45SCHRSchwab Intermediate-Term US Treasury ETF0.56%-2.25%0.54%0.45%2.26%1.44%--
A 54.6562IEF7227825450IEFiShares 7-10 Year Treasury Bond ETF1.13%-3.84%0.76%0.16%3.58%1.94%5.40%
All returns over 1 year are annualized. All returns are total returns unless otherwise stated.

ETF.com Efficiency Insight

The funds in this segment are, for the most part, very similar in terms of Efficiency. SCHR charges the lowest expense ratio—10 bps—but even the most “expensive” The funds in this segment are very similar in terms of Efficiency ETFs here charge just 15 bps. Most funds also track their underlying indexes well, with median tracking differences close to their expense ratios and narrow ranges. TENZ and FIVZ have, however, some downside drag in tracking their indexes, trailing their respective indexes by more than twice its stated expense ratio over some particularly bad 12-month stretch.
Most of the funds in this segment are stable. IEF and IEI are the most popular, with billions of dollars in AUM each, followed by SCHR and ITE, which have over $200M and $150M, respectively. FIVZ, however, haven’t attracted much investor interest, hence we see high risk of closure. (Insight updated 01/16/17)

All Funds (4)

96
96.103291
96
95.897758
95
94.975704
95
94.790716

ETF.com Grade as 01/05/17

Fixed Income: U.S. Government Treasury Intermediate

Tracking Difference (12 Month)

Ticker Expense Ratio Median Max. Upside Max. Downside Max LT/ST Cap Gains Rate Rule Legal Structure Fund Closure Risk Efficiency
IEF iShares 7-10 Year Treasury Bond ETF 0.15% -0.09% -0.02% -0.12% 20.00% / 39.60% Low 94.790716
IEI iShares 3-7 Year Treasury Bond ETF 0.15% -0.09% -0.06% -0.12% 20.00% / 39.60% Low 94.975704
ITE SPDR Bloomberg Barclays Intermediate Term Treasury ETF 0.10% -0.11% -0.09% -0.12% 20.00% / 39.60% Low 96.103291
SCHR Schwab Intermediate-Term US Treasury ETF 0.06% -0.11% 0.03% -0.14% 20.00% / 39.60% Low 95.897758

ETF.com Tradability Insight

IEF dominates the segment in Tradability, with the higheset dollar volume changing hands at super tight spreads compared to its peers. Its cousin, IEI, also tends to trade at similarlyIEF dominates the segment in Tradability tight spreads, but IEI’s mediocre median daily volume leaves less space for large trades. That said, retail investors should be able to get in and out of both funds cheaply and easily.
The remaining funds trade much less frequently than IEF and IEI. SCHR and ITE have the healthiest volumes and manageable spreads. Unfortunately, TENZ and FIVZ trade only less than $500K on most days—volumes that make filling large orders difficult. Still, cost-effective retail transactions are possible with limit orders and some effort. (Insight updated 01/16/17)

All Funds (4)

100
99.71
99
99.308316
99
99.10035
95
95.051869

ETF.com Grade as 01/05/17

Fixed Income: U.S. Government Treasury Intermediate

Ticker Median Daily Volume ($) Average Spread Creation Unit/Day Market Hours Overlap Underlying Volume/Unit % Creation Cost Per Unit (%) Impediment to Creations Score - Tradability
IEF iShares 7-10 Year Treasury Bond ETF $177.32 M 0.01% 16.92 100.00% -- 0% None 99.71
IEI iShares 3-7 Year Treasury Bond ETF $40.58 M 0.02% 3.32 100.00% -- 0.00% None 99.308316
ITE SPDR Bloomberg Barclays Intermediate Term Treasury ETF $2.53 M 0.08% 0.42 100.00% -- 0.01% None 95.051869
SCHR Schwab Intermediate-Term US Treasury ETF $5.74 M 0.05% 2.14 100.00% -- 0% None 99.10035
Spread History
Premium/Discount History

ETF.com/ Block Liquidity

IEF
5
4
3
2
1
IEI
5
4
3
2
1
ITE
5
4
3
2
1
SCHR
5
4
3
2
1

This measurement shows how easy it is to trade 25,000 shares of each ETF.

ETF.com Fit Insight

The six intermediate-term Treasury ETFs all define “intermediate” maturity differently. As a result, they all hold very different portfolios. ITE holds the broadest portfolio,The 6 ETFs all define "intermediate" maturity differently with bonds expiring in the next 1-10 years. In contrast, SCHR holds a smaller slice of the intermediate market, with Treasurys that mature in 3-10 years. IEF only holds longer-term intermediate Treasuries, limiting its portfolio to bonds mostly expiring in the next 7-10 years. TENZ tilts even further toward the long end of the curve, with bonds that mature in 7-15 years. The last funds, IEI and FIVZ mostly hold the middle bonds—those maturing in 3-7 years.
The resulting tilts are consistent with the funds’ maturities. TENZ and IEF offer the highest yields, along with the longest average maturities and effective durations. At the other end of the spectrum, ITE has the lowest yield with less than 1/2 of portfolio maturity of TENZ and IEF. IEI, FIVZ and SCHR are in the middle of the spectrum, with yields that move up in accordance with their longer maturities and durations.
Overall, the choice here boils down to your definition of intermediate maturity. ITE matches the market best in our view, but the variety of maturity ranges in this space attests to the lack of a clear standard. The range of total return results shows how much the decision matters. (Insight updated 01/16/17)

All Funds (4)

100
99.537645
73
73.034212
71
70.874972
55
54.6562

ETF.com Grade as 01/05/17

Fixed Income: U.S. Government Treasury Intermediate