Fixed Income: U.S. Government Treasury Short-Term

SCHO Top Performer Intra-day
Price $50.49
Today’s Change 0.00%(0.00)
4:00pm 05/26/2017
TUZ Bottom Performer Intra-day
Price $50.71
Today’s Change -0.02%(-0.03)
3:46pm 05/26/2017
  • Overview
  • Efficiency
  • Tradability
  • Fit

ETF.com Insight

Three of the four ETFs in this segment offer marketlike exposure: the iShares 1-3 Year Treasury Bond Fund (SHY), Schwab Short-Term US Treasury ETF (SCHO) and PIMCO 1-3 Year US TreasurySHY is the stand out of the segment Index ETF (TUZ). SHY, SCHO and TUZ interpret short-term debt to mean bonds due to mature in 1-3 years, fitting our definition of the market. In contrast, the SPDR Barclays Short-Term Treasury ETF (SST) looks different from the market. SST has a broader definition of short-term debt and invests about 1/3 of its portfolio in bonds maturing in 3+ years.
Still, the funds hit what they aim at with respect to coverage.
Every ETF in the segment earns high grades in Efficiency. They charge similarly low expense ratios (ranging from 8 to 15 bps), have excellent index tracking and low fund closure risk. The new kid on the block, SST, is the only exception to this rule, as it has failed to garner sufficient investor interest—its low AUM puts it at medium risk of closure.
Only SHY offers strong liquidity, with large dollar volumes on most days with tight spreads. SCHO and TUZ offer much smaller median daily volumes, but can be fairly traded with a bit of care.
Overall, SHY is the stand out of the segment, earning it our Analyst Pick. While retail investors can fairly access the space with SCHO and TUZ, institutions might want to take a look at SST, especially if one is searching for yield. (Insight updated 05/26/17)

All Funds (4)

SCHO $1.75 B 1751367573.6 Marketlike

A 97
E
97
97
T
100
100
F
97
97

TUZ $124.41 M 124414480 Poor secondary liquidity

A 94
E
95
95
T
82
82
F
94
94

SHY $10.97 B 10966926170 Great tracking

A 92
E
96
96
T
100
100
F
92
92

SST $138.87 M 138868999.8 Low AUM

A 77
E
95
95
T
85
85
F
77
77

ETF.com Grade as 05/18/17

Fixed Income: U.S. Government Treasury Short-Term

1 Year Total Return NAV
Performance  [as of 05/25/17] 1 Month 3 Month YTD 1 Year 3 Years 5 Years 10 Years
Benchmark: Bloomberg Barclays U.S. 1-3 Year Treasury Index0.12%0.14%0.49%0.60%0.70%0.65%2.01%
A 96.994519SCHO1751367573.6SCHOSchwab Short-Term US Treasury ETF0.08%0.14%0.46%0.52%0.60%0.56%--
A 94.394469TUZ124414480TUZPIMCO 1-3 Year US Treasury Index ETF0.11%0.11%0.42%0.47%0.48%0.53%--
A 92.037793SHY10966926170SHYiShares 1-3 Year Treasury Bond ETF0.16%0.16%0.43%0.48%0.59%0.51%1.87%
A 76.799499SST138868999.8SSTSPDR Bloomberg Barclays Short Term Treasury ETF0.10%0.27%0.76%0.32%0.90%0.74%--
All returns over 1 year are annualized. All returns are total returns unless otherwise stated.

ETF.com Efficiency Insight

Every fund in this segment earns high marks in Efficiency. Expense ratios are low across the board, ranging from 8 to 15 bps. Given the current low yielding environment and the short timeSST is the exception with risk of fund closure horizon of this space, every basis point counts. Tracking error can easily eat up the total return. Fortunately, every fund tracks its index tightly and with little variation, typically lagging their underlying indexes by only a few bps off their respective expense ratios.
The segment is generally popular with investors. The four funds manage a total of about $9B in assets, the majority of which is concentrated in SHY. SST is the exception: It launched more than two years ago and has failed to gain traction; its paltry asset base put it at medium risk of fund closure.
The funds have generally maintained tax efficiency too by either making very small cap gains payouts or avoiding them altogether. (Insight updated 05/26/17)

All Funds (4)

97
97.371672
96
95.803923
95
95.388718
95
94.807299

ETF.com Grade as 05/18/17

Fixed Income: U.S. Government Treasury Short-Term

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
SCHO Schwab Short-Term US Treasury ETF 0.06% -0.09% -0.03% -0.17% 20.00% / 39.60% Low 97.371672
SHY iShares 1-3 Year Treasury Bond ETF 0.15% -0.13% -0.11% -0.17% 20.00% / 39.60% Low 95.803923
SST SPDR Bloomberg Barclays Short Term Treasury ETF 0.10% -0.10% 0.16% -0.19% 20.00% / 39.60% Low 95.388718
TUZ PIMCO 1-3 Year US Treasury Index ETF 0.15% -0.15% -0.10% -0.22% 20.00% / 39.60% Low 94.807299

ETF.com Tradability Insight

SHY is the segment’s most liquid options, while SST, SCHO and TUZ fall behind.
SHY leads the pack, with a median daily volume north of over $100M and tight spreads, making it aSHY is the segment's most liquid options great option for active traders. Institutions trading large share blocks can also expect tight spreads from liquidity providers.
Buy-and-hold investors can make do with SCHO and TUZ. Despite their thinner volumes—$5M for SCHO and $500K for TUZ—both show tight single-digit spreads. Small traders can get a fair price if limit orders are used.
SST is the bottom performer in liquidity in this segment due to a lack of asset and investor interest. It trades thinly and spreads are very wide which, depending on your time horizon, can significantly add to round-trip costs. (Insight updated 05/26/17)

All Funds (4)

100
99.73377
100
99.6
85
85.07023
82
81.838813

ETF.com Grade as 05/18/17

Fixed Income: U.S. Government Treasury Short-Term

Ticker Median Daily Volume ($) Average Spread Creation Unit/Day Market Hours Overlap Underlying Volume/Unit % Creation Cost Per Unit (%) Impediment to Creations Score - Tradability
SCHO Schwab Short-Term US Treasury ETF $8.69 M 0.03% 3.44 100.00% -- 0% None 99.73377
SHY iShares 1-3 Year Treasury Bond ETF $66.42 M 0.01% 7.85 100.00% -- 0% None 99.6
SST SPDR Bloomberg Barclays Short Term Treasury ETF $613.16 K 0.14% 0.20 100.00% -- 0.02% None 85.07023
TUZ PIMCO 1-3 Year US Treasury Index ETF $476.59 K 0.06% 0.19 100.00% -- 0.02% None 81.838813
Spread History
Premium/Discount History

ETF.com/ Block Liquidity

SCHO
5
4
3
2
1
SHY
5
4
3
2
1
SST
5
4
3
2
1
TUZ
5
4
3
2
1

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

ETF.com Fit Insight

SHY, SCHO and TUZ offer marketlike exposure to short-term Treasurys by tracking indexes that are very similar or identical to our benchmark. All three funds define “short term”Both SHY and SCHO track the same index as our benchmark. as bonds due to mature between one and three years. On the other hand, SST reaches further out on the yield curve, investing in bonds due to mature in 1-5 years, for yield.
Both SHY and SCHO track the same index as our benchmark. Neither fund replicates its underlying index fully, resulting in minor differences from the benchmark. They nonetheless deliver highly comparable and excellent market coverage.
TUZ leans a bit toward the short end of the curve but arguably offers an even tighter focus than our benchmark.
By contrast, SST invests 1/3 of its portfolio in bonds due to mature in 3-5 years. As a result, the fund serves up the segment’s longest effective duration, which is compensated by the segment’s highest yield. (Insight updated 05/26/17)

All Funds (4)

97
96.994519
94
94.394469
92
92.037793
77
76.799499

ETF.com Grade as 05/18/17

Fixed Income: U.S. Government Treasury Short-Term