GNMA vs SPMB

GNMABiShares GNMA Bond ETF

SPMBAState Street SPDR Portfolio Mortgage Backed Bond 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.

SPMB The no-frills way to own America's mortgage bonds. SPMB tracks the Bloomberg U.S. MBS Index for four basis points, a fraction of what the typical mortgage-bond ETF charges, and pays income monthly.

Stated mandate

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

SPMB The fund seeks to track, before fees and expenses, the price and yield performance of the Bloomberg U.S. MBS Index.

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.

• SPMB Four basis points a year, against a 0.35% median for mortgage-bond ETFs. Cost is where this fund does its loudest talking.
• Runs the same Bloomberg U.S. MBS Index as iShares' MBB at the same 0.04% fee, and undercuts MBBA, which tracks that index for far more.
• Roughly 2,700 mortgage bonds in a single line item, inside a multi-billion-dollar fund that trades actively, with distributions paid monthly.
• Trading since 2009, and one of the strongest implementations in its mortgage-bond peer group.

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

• SPMB Homeowners refinance when rates fall, so mortgage bonds get paid back early and rally less than Treasuries. That quirk is built into the index, not the fund.
• Prices move with interest rates and the monthly payout floats with the portfolio. This is a bond fund, not a cash substitute.
• US mortgages only. No Treasuries, no corporates, no credit spice. A building block for a bond sleeve rather than the whole sleeve.

Full GNMA profile⁠

Full SPMB profile⁠