GNMA vs MBB

GNMABiShares GNMA Bond ETF

MBBAiShares MBS ETF

In short

GNMA Most mortgage ETFs blend Fannie, Freddie and Ginnie collateral. This one holds only Ginnie Mae pass-throughs, the slice whose guarantee is explicitly backed by the full faith and credit of the US government, for 0.11% a year.

MBB Launched in 2007, MBB is the plain-vanilla way to own U.S. agency mortgage bonds: one of the biggest and busiest funds in a small niche, tracking the Bloomberg U.S. MBS Index for four basis points.

Stated mandate

GNMA The fund seeks to track an index of mortgage-backed securities issued by the Government National Mortgage Association (GNMA).

MBB The fund seeks to track an index composed of U.S. agency mortgage-backed securities.

Why people hold it

• GNMA Pure Ginnie Mae mandate: the guarantee on these pass-throughs is backed by the full faith and credit of the United States, while federal support for Fannie and Freddie paper is implicit.ginniemae.govcbo.gov
• Costs 0.11% a year, under a third of the typical mortgage-bond ETF fee, and BlackRock covers the fund's ordinary operating expenses out of that management fee.sec.gov
• Monthly payer, roughly 300 Ginnie Mae pools, same index mandate since its 2012 launch. Sits in the upper half of its mortgage-backed peer group on our review.

• MBB Four basis points to rent the entire agency mortgage market, against a category median near 0.35%. In low-coupon bond land, that gap compounds quietly.
• Scale is the real feature: one of the largest and most actively traded funds in the mortgage-bond category, which generally shows up as tighter spreads.
• Pays monthly, and the mandate stays narrow: an index of U.S. agency mortgage-backed securities, nothing exotic bolted on.
• Among the stronger builds in a thin peer group of mortgage-bond ETFs, on the combination of cost, trading friction and issuer staying power.

Worth knowing

• GNMA Thinly traded next to the category's giants (MBB, VMBS), so bid/ask spreads and order size matter more here than in the big broad-agency funds.
• Cheap, not the cheapest shelf: VMBS and SPMB charge less, though they hold broad agency MBS rather than Ginnie Mae collateral alone.
• The guarantee covers payment, not price. Interest-rate moves and homeowner prepayments still drive results, and prepayments can hand principal back sooner than planned.sec.govginniemae.gov

• MBB This is one slice of the bond market. Agency mortgage paper only, with no Treasuries or corporates alongside it.
• Mortgage bonds cut both ways with rates: borrowers refinance when yields fall and sit tight when they rise, so the portfolio's duration shifts underneath you.
• On price it's a photo finish: SPMB tracks the same index at the same 0.04%, and VMBS runs a basis point cheaper.

Full GNMA profile⁠

Full MBB profile⁠