EDV vs GOVZ

EDVAVanguard Extended Duration Treasury ETF

GOVZBiShares 25+ Year Treasury STRIPS Bond ETF

In short

EDV Zero-coupon Treasury STRIPS maturing in 20 to 30 years: the most rate-sensitive corner of the government bond market, in a five-basis-point Vanguard wrapper. Pure duration, nothing else.

GOVZ Treasury bonds with the coupons stripped off, 25 years and out. No interest payments means extreme duration and price swings to match, for 0.10% net of a waiver through February 28, 2029.

Stated mandate

EDV The fund passively tracks an index of extended-duration, zero-coupon U.S. Treasury securities, specifically Treasury STRIPS with maturities from 20 to 30 years.

GOVZ The fund seeks to track an index of principal STRIPS from U.S. Treasury bonds with at least 25 years remaining to maturity.

Why people hold it

• EDV At 0.05%, it undercuts the typical long-Treasury ETF (cohort median 0.15%) and charges a third of what TLT does.
• STRIPS have their coupons removed, so the roughly 80 holdings are pure principal claims dated 20 to 30 years out. Rate sensitivity runs beyond standard 20+ year Treasury funds.vanguard.com
• Vanguard has run it since 2007, it tracks its Bloomberg STRIPS index closely, and it sits among the top-rated names in its long-Treasury peer group.

• GOVZ Tracks the ICE BofA Long US Treasury Principal STRIPS Index, the same index as ZROZ (0.15%), for 0.10% net of a waiver through February 28, 2029 (0.15% gross). Sits near the category median on fee.
• Owns only principal STRIPS, the zero-coupon remains of Treasury bonds. Because they make no periodic interest payments, duration runs longer and rate moves land harder than on traditional notes and bonds.sec.gov
• Pays monthly, even though the bonds inside send no coupons. The underlying paper is US Treasury obligations, with no corporate credit in the mix.

Worth knowing

• EDV Vanguard's own fact sheet warns that interest rate risk is expected to be extremely high and that rising rates may cause the fund's value to decline significantly.vanguard.com
• Vanguard describes the fund as primarily intended for pension plans and other institutions matching long-term liabilities.vanguard.com
• The STRIPS pay no coupons. Income accrues as the discount pulls toward par, and the fund passes that along to shareholders.vanguard.com

• GOVZ The flip side of max duration: the prospectus notes STRIPS market values generally swing more with interest rates than regular Treasuries. That works in both directions.sec.gov
• Cheaper long-Treasury options exist: EDV charges 0.05% (also STRIPS-based, different index) and VGLT 0.03% (coupon-paying bonds, shorter duration). Neither is a 25-year-plus principal STRIPS pure play.
• A mid-sized fund that trades more lightly than the category's giants, so bid-ask spreads can be wider, especially on large or off-hours orders.

Full EDV profile⁠

Full GOVZ profile⁠