TYA vs VGIT

TYADSimplify Intermediate Term Treasury Futures Strategy ETF

VGITAVanguard Intermediate-Term Treasury ETF

In short

TYA Most intermediate Treasury funds own intermediate Treasuries. TYA stacks intermediate-curve Treasury futures to target the duration of the ICE 20+ Year US Treasury Index, sourcing long-end rate exposure from the belly of the curve.

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

TYA The fund seeks quarterly total returns that match or exceed the ICE US Treasury 20+ Year Index before fees and expenses. It uses intermediate-curve Treasury futures to target the duration of that long-term Treasury index.

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

Why people hold it

• TYA Unusual mandate: it aims for quarterly total returns matching or beating the ICE 20+ Year US Treasury Index before fees, built from intermediate Treasury futures rather than 30-year bonds.simplify.us
• Nothing else in its intermediate Treasury cohort works this way. Peers like SPTI and SCHR simply hold the 3-10 year part of the curve.
• Duration is delivered through futures, not a pile of cash long bonds, and the fund distributes monthly.
• Live since 2021, so there is a multi-year record of the strategy running in real markets rather than a backtest.

• 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

• TYA It charges 0.25%, above the cohort median near 0.15% and many times the plain trackers: SPTI and SCHR run 0.03%.
• Intermediate label, long-end sensitivity. Targeting a 20+ year index's duration means rate moves hit the price much harder than in a straight 3-10 year Treasury fund.
• Futures rolls, margin and collateral add moving parts a cash bond fund does not have, and as a moderately traded fund its spreads can run wider than the cohort's giants.

• 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 TYA profile⁠

Full VGIT profile⁠