SPTI vs VGIT

SPTIAState Street SPDR Portfolio Intermediate Term Treasury ETF

VGITAVanguard Intermediate-Term Treasury ETF

In short

SPTI Middle-of-the-curve Treasuries and nothing else: notes maturing in 3 to 10 years, wrapped at 0.03% a year. Running since 2007, it is one of the cheapest ways to own that slice of the government bond market.

VGIT The middle of the Treasury curve, priced like an afterthought. VGIT holds government bonds maturing in 3 to 10 years for 0.03% a year, a quarter of what the typical Treasury fund in its peer group charges.

Stated mandate

SPTI The fund seeks to deliver returns generally matching the Bloomberg 3-10 Year U.S. Treasury Index before fees and expenses, investing in U.S. Treasury securities with remaining maturities of 3 to 10 years.

VGIT Seeks to track a market-weighted Treasury bond index while maintaining an intermediate-term dollar-weighted average maturity.

Why people hold it

• SPTI 0.03% a year sits in the cheapest tier of intermediate Treasury funds, well under the category norm and level with Schwab's SCHR at the floor.
• No credit guesswork. Roughly a hundred US Treasury notes, held to mirror the Bloomberg 3-10 Year U.S. Treasury Index.ssga.com
• Index tracking has been among the tightest in its peer group, and income lands monthly.
• Launched in 2007 and now a multi-billion-dollar fund that trades actively, so getting in and out is rarely the hard part.

• VGIT Charges 0.03% a year against a 0.12% median for Treasury funds in its peer group. In bonds, where the coupon does the work, that fee gap is most of the argument.
• Plain index work: it follows the Bloomberg U.S. Treasury 3-10 Year Bond Index with very little slippage, one of the tighter implementations in its Treasury peer group.vanguard.com
• Running since 2009 and now a multi-billion-dollar fund that trades actively, so spreads stay tight. Interest lands monthly.
• The portfolio is U.S. government paper only, a few dozen issues. No corporate borrowers to underwrite, no credit research required.vanguard.com

Worth knowing

• SPTI Intermediate maturities carry real rate sensitivity: a 3-to-10-year book swings more when yields move than a short-bill fund does.
• Treasuries only. No corporates, mortgages or inflation-linked bonds, which makes it a building block rather than a full bond allocation.
• The monthly payout floats with whatever the Treasury curve is paying, so it moves with rates rather than sitting at a set level.

• VGIT Intermediate maturities cut both ways. A 3 to 10 year book reprices more when yields move than a bill fund does, so the ride is bumpier than cash-like Treasury products.
• Treasuries only means no corporate credit premium in the yield. Income comes strictly from government coupons, and the monthly payout drifts with rates.

Full SPTI profile⁠

Full VGIT profile⁠