BWZ vs SPTS

BWZCSPDR Bloomberg Short Term International Treasury Bond ETF

SPTSAState Street SPDR Portfolio Short Term Treasury ETF

In short

BWZ The odd one out on the short-Treasury shelf. BWZ skips Uncle Sam and buys 1-3 year government bonds from the rest of the world, spread across a few hundred issues with index caps so no single country runs the show.

SPTS U.S. Treasury notes maturing in one to three years, wrapped at three basis points. SPTS sits in the cheapest tier of the short-Treasury aisle, charging a fifth of the category median for the same plain-vanilla job.

Stated mandate

BWZ The fund seeks to track, before fees and expenses, the price and yield performance of the Bloomberg 1-3 Year Global Treasury ex-US Capped Index.

SPTS The fund seeks to track the price and yield performance of the Bloomberg 1-3 Year U.S. Treasury Index before fees and expenses, providing exposure to U.S. Treasury securities with remaining maturities between 1 and 3 years.

Why people hold it

• BWZ Buys where its shelf-mates don't: short-dated sovereign debt issued outside the US, with index caps that keep one country from dominating the basket.
• About 300 bonds, all parked in the 1-3 year slice of the curve, the corner of government debt where rate swings bite least.
• Running since 2009 under State Street's SPDR banner, through several full rate cycles, and it pays monthly.

• SPTS Charges 0.03% a year against a 0.15% median for short-Treasury funds. On cash-like money, the fee line is the part that doesn't drift.
• Follows the Bloomberg 1-3 Year U.S. Treasury Index closely, one of the tightest index fits among its short-Treasury peers.ssga.com
• Roughly 100 U.S. Treasury notes and nothing else. No corporates, no mortgages, no credit surprises hiding in the basket. Distributions land monthly.
• Trading since 2011 and now a multi-billion-dollar, actively traded fund, so it isn't a thin newcomer you have to nurse in and out of.

Worth knowing

• BWZ Costs 0.35% a year. The plain US short-Treasury funds it gets shelved beside (VGSH, SCHO, SPTS) charge 0.03%.
• Filed with 1-3 year Treasury funds, but the holdings are foreign governments. Expect it to move on its own schedule, not in step with SHY and company.
• Mid-sized and moderately traded rather than a volume monster, so the spread you pay matters more here than in the giant short-Treasury names.

• SPTS Short maturities dampen price swings, they don't erase them. When short-term rates move, the fund's price and its payouts move too.
• Government paper only, so there's no credit spread in the income. The yield is whatever the front end of the Treasury curve is paying.
• VGSH and SCHO match the 0.03% fee on the same slice of the curve. Cost alone won't separate them; execution and platform access will.

Full BWZ profile⁠

Full SPTS profile⁠