SHY vs. UTWO

Last updated Jun 4, 2026

SHY (iShares 1-3 Year Treasury Bond ETF) and UTWO (US Treasury 2 Year Note ETF) are both Government Bonds funds - SHY tracks the ICE US Treasury 1-3 Year Index while UTWO tracks the ICE BofA Current 2 Year US Treasury Index - Benchmark TR Gross. Both are passively managed. Over the past 3 years, SHY returned 4.03%/yr vs 3.78%/yr for UTWO. With a 0.96 correlation, they move nearly in lockstep. Both charge a 0.15% expense ratio.

Performance

SHY vs. UTWO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares 1-3 Year Treasury Bond ETF (SHY) and US Treasury 2 Year Note ETF (UTWO). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, SHY achieves a 0.43% return, which is significantly higher than UTWO's 0.33% return.

SHY

• 1D: -0.05%
• 1M: 0.08%
• YTD: 0.43%
• 6M: 0.69%
• 1Y: 3.32%
• 3Y*: 4.03%
• 5Y*: 1.71%
• 10Y*: 1.65%

UTWO

• 1D: -0.04%
• 1M: 0.07%
• YTD: 0.33%
• 6M: 0.63%
• 1Y: 3.13%
• 3Y*: 3.78%
• 5Y*: —
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

SHY vs. UTWO - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022
SHY iShares 1-3 Year Treasury Bond ETF	0.43%	4.95%	3.92%	4.16%	-0.73%
UTWO US Treasury 2 Year Note ETF	0.33%	4.79%	3.71%	3.45%	-0.81%

Correlation

The correlation between SHY and UTWO is 0.95 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.95
Correlation (3Y) Calculated over the trailing 3-year period	0.95
Correlation (All Time) Calculated using the full available price history since Aug 10, 2022	0.96

The correlation between SHY and UTWO has been stable across timeframes, ranging from 0.95 to 0.96 - a consistent structural relationship.

Return for Risk

SHY vs. UTWO — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

SHY

SHY Risk / Return Rank: 79
SHY Sharpe Ratio Rank: 74
SHY Sortino Ratio Rank: 88
SHY Omega Ratio Rank: 82
SHY Calmar Ratio Rank: 73
SHY Martin Ratio Rank: 77

UTWO

UTWO Risk / Return Rank: 75
UTWO Sharpe Ratio Rank: 71
UTWO Sortino Ratio Rank: 85
UTWO Omega Ratio Rank: 79
UTWO Calmar Ratio Rank: 70
UTWO Martin Ratio Rank: 70

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

SHY vs. UTWO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares 1-3 Year Treasury Bond ETF (SHY) and US Treasury 2 Year Note ETF (UTWO). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	SHY	UTWO	Difference
Sharpe ratio Return per unit of total volatility	2.49	2.33	+0.15
Sortino ratio Return per unit of downside risk	4.10	3.84	+0.26
Omega ratio Gain probability vs. loss probability	1.51	1.47	+0.03
Calmar ratio Return relative to maximum drawdown	3.75	3.50	+0.25
Martin ratio Return relative to average drawdown	15.21	12.89	+2.32
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

SHY vs. UTWO - Sharpe Ratio Comparison

The current SHY Sharpe Ratio is 2.49, which is comparable to the UTWO Sharpe Ratio of 2.33. The chart below compares the historical Sharpe Ratios of SHY and UTWO, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	SHY	UTWO	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.49	2.33	+0.15
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.87	—	—
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	1.06	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	1.28	1.45	-0.16

Drawdowns

SHY vs. UTWO - Drawdown Comparison

The maximum SHY drawdown since its inception was -5.71%, which is greater than UTWO's maximum drawdown of -2.04%. Use the drawdown chart below to compare losses from any high point for SHY and UTWO.

Drawdown Indicators

	SHY	UTWO	Difference
Max Drawdown Largest peak-to-trough decline	-5.71%	-2.04%	-3.67%
Max Drawdown (1Y) Largest decline over 1 year	-0.89%	-0.90%	+0.01%
Max Drawdown (3Y) Largest decline over 3 years	-0.97%	-1.08%	+0.11%
Max Drawdown (5Y) Largest decline over 5 years	-5.71%	—	—
Max Drawdown (10Y) Largest decline over 10 years	-5.71%	—	—
Current Drawdown Current decline from peak	-0.31%	-0.38%	+0.07%
Average Drawdown Average peak-to-trough decline	-0.52%	-0.49%	-0.03%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.22%	0.24%	-0.02%

Volatility

SHY vs. UTWO - Volatility Comparison

iShares 1-3 Year Treasury Bond ETF (SHY) and US Treasury 2 Year Note ETF (UTWO) have volatilities of 0.35% and 0.36%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	SHY	UTWO	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.35%	0.36%	-0.01%
Volatility (6M) Calculated over the trailing 6-month period	0.92%	0.92%	0.00%
Volatility (1Y) Calculated over the trailing 1-year period	1.34%	1.35%	-0.01%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.98%	2.07%	-0.09%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.57%	2.07%	-0.50%

SHY vs. UTWO - Expense Ratio Comparison

Both SHY and UTWO have an expense ratio of 0.15%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

SHY vs. UTWO - Dividend Comparison

SHY's dividend yield for the trailing twelve months is around 3.68%, more than UTWO's 3.50% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
SHY iShares 1-3 Year Treasury Bond ETF	3.68%	3.81%	3.92%	2.99%	1.30%	0.26%	0.94%	2.12%	1.72%	0.98%	0.71%	0.54%
UTWO US Treasury 2 Year Note ETF	3.50%	3.63%	4.22%	4.39%	1.22%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both SHY and UTWO in my portfolio?

With a correlation of 0.95, SHY and UTWO move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, SHY or UTWO?

UTWO has higher volatility (0.36%) compared to SHY (0.35%). In terms of maximum drawdown, SHY dropped -5.71% vs UTWO's -2.04%.

Which ETF is better, SHY or UTWO?

On 3-year performance, SHY leads with 4.03% vs 3.78% for UTWO. Both ETFs have the same 0.15% expense ratio. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, SHY or UTWO?

Over the 3-year period, SHY has performed better with a 4.03% return vs 3.78%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, SHY or UTWO?

SHY and UTWO have the same expense ratio: 0.15% per year.

Which ETF pays a higher dividend yield, SHY or UTWO?

SHY has the higher dividend yield at 3.68%, compared with 3.50% for UTWO.

What is the main difference between SHY and UTWO?

SHY tracks ICE US Treasury 1-3 Year Index, while UTWO tracks ICE BofA Current 2 Year US Treasury Index - Benchmark TR Gross. They also come from different issuers: iShares and US Benchmark Series.

Which has better risk-adjusted returns?

SHY currently has the higher Sharpe Ratio (2.49 vs 2.33), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.