TUA vs VGIT

TUACSimplify Short Term Treasury Futures Strategy ETF

VGITAVanguard Intermediate-Term Treasury ETF

In short

TUA Most intermediate Treasury ETFs just buy the bonds. TUA rents the exposure instead: short-term Treasury futures sized to match the duration of the 7-10 year Treasury index, with a calendar-quarter bar written into the mandate.

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

TUA The Fund seeks calendar-quarter total return that matches or exceeds the ICE US Treasury 7-10 Year Bond Index, using Treasury futures to target that index’s duration.

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

Why people hold it

• TUA Unusually specific mandate: match or beat the ICE US Treasury 7-10 Year Bond Index each calendar quarter, using Treasury futures to hit that index's duration.simplify.us
• It stays on the job. The portfolio hews closely to the duration target in its prospectus rather than wandering into credit or off-mandate bond bets.
• A conventional 1940 Act fund that distributes monthly, so shareholders get a 1099 rather than the K-1 some futures vehicles generate.

• 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

• TUA 0.25% a year is above the median for intermediate Treasury funds, and above IEF, which tracks the very same index for 0.15%.
• Futures-driven duration moves more sharply than the plain bond-owning funds in this group; TUA sits at the higher-volatility end of the cohort.
• The quarterly benchmark is a target, not a promise. Futures pricing and collateral income can pull results away from the index in either direction.

• 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 TUA profile⁠

Full VGIT profile⁠