GNMA vs SMBS

GNMABiShares GNMA Bond ETF

SMBSASchwab Mortgage-Backed Securities 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.

SMBS —No data

Stated mandate

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

SMBS —No data

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.

SMBS —No data

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

SMBS —No data

Full GNMA profile⁠

Full SMBS profile⁠