SPMB vs VABS

SPMBAState Street SPDR Portfolio Mortgage Backed Bond ETF

VABSCVirtus Newfleet Securitized Income ETF

In short

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.

VABS The agency-mortgage aisle is wall-to-wall cheap index trackers. VABS is the odd one out: an actively managed securitized-income fund from Virtus, run by the Newfleet bond team since its 2021 launch, paying monthly.

Stated mandate

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

VABS The Fund seeks income through an actively managed exchange-traded fund strategy.

Why people hold it

• 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.

• VABS No index to hug. The managers choose their spots across securitized bonds and can reposition as the market shifts, something the passive mortgage trackers in this group (SPMB, VMBS, MBB) are not built to do.
• Income is the stated job, and the cash arrives monthly rather than on a quarterly drip.
• Spread across roughly 200 bond positions, so no single deal carries the portfolio. Diversification is one of this fund's stronger suits within its mortgage-bond peer group.
• Despite being the active outlier in a cohort of low-cost giants, it lands in the upper half of its mortgage-bond peer group on our overall read.

Worth knowing

• 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.

• VABS Active management carries an active price: 0.39% a year, versus 0.03% at VMBS and 0.04% at SPMB and MBB. You are paying for the manager's judgment, not the index.
• A small fund that trades thinly next to the index heavyweights, which can mean wider bid-ask spreads and more care needed on order size and timing.
• With no benchmark to track, results ride on the team's security selection rather than on a published index you can look up in advance.

Full SPMB profile⁠

Full VABS profile⁠