USVN vs. SMBS

Last updated Jun 4, 2026

USVN (US Treasury 7 Year Note ETF) and SMBS (Schwab Mortgage-Backed Securities ETF) are both exchange-traded funds - USVN is a Government Bonds fund tracking the ICE BofA Current 7-Year US Treasury Index - Benchmark TR Gross, while SMBS is a Mortgage Backed Securities fund tracking the Bloomberg US MBS Float Adjusted Total Return Index. Both are passively managed. Over the past year, USVN returned 3.56% vs 6.78% for SMBS. Their correlation of 0.91 suggests significant overlap in exposure. USVN charges 0.15%/yr vs 0.03%/yr for SMBS.

Performance

USVN vs. SMBS - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in US Treasury 7 Year Note ETF (USVN) and Schwab Mortgage-Backed Securities ETF (SMBS). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, USVN achieves a -0.70% return, which is significantly lower than SMBS's 0.70% return.

USVN

• 1D: -0.22%
• 1M: -0.18%
• YTD: -0.70%
• 6M: -1.08%
• 1Y: 3.56%
• 3Y*: 2.70%
• 5Y*: —
• 10Y*: —

SMBS

• 1D: -0.24%
• 1M: 0.33%
• YTD: 0.70%
• 6M: 0.82%
• 1Y: 6.78%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

USVN vs. SMBS - Yearly Performance Comparison

	2026 (YTD)	2025	2024
USVN US Treasury 7 Year Note ETF	-0.70%	7.66%	-0.50%
SMBS Schwab Mortgage-Backed Securities ETF	0.70%	8.15%	-0.07%

Correlation

The correlation between USVN and SMBS is 0.90, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.90
Correlation (All Time) Calculated using the full available price history since Nov 20, 2024	0.91

The correlation between USVN and SMBS has been stable across timeframes, ranging from 0.90 to 0.91 - a consistent structural relationship.

Return for Risk

USVN vs. SMBS — Risk / Return Rank

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

USVN

USVN Risk / Return Rank: 23
USVN Sharpe Ratio Rank: 25
USVN Sortino Ratio Rank: 24
USVN Omega Ratio Rank: 23
USVN Calmar Ratio Rank: 22
USVN Martin Ratio Rank: 23

SMBS

SMBS Risk / Return Rank: 48
SMBS Sharpe Ratio Rank: 47
SMBS Sortino Ratio Rank: 49
SMBS Omega Ratio Rank: 47
SMBS Calmar Ratio Rank: 49
SMBS Martin Ratio Rank: 49

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.

USVN vs. SMBS - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for US Treasury 7 Year Note ETF (USVN) and Schwab Mortgage-Backed Securities ETF (SMBS). 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.

	USVN	SMBS	Difference
Sharpe ratio: Return per unit of total volatility	0.84	1.64	-0.80
Sortino ratio: Return per unit of downside risk	1.26	2.42	-1.16
Omega ratio: Gain probability vs. loss probability	1.14	1.30	-0.15
Calmar ratio: Return relative to maximum drawdown	0.97	2.41	-1.44
Martin ratio: Return relative to average drawdown	2.89	8.21	-5.33
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

USVN vs. SMBS - Sharpe Ratio Comparison

The current USVN Sharpe Ratio is 0.84, which is lower than the SMBS Sharpe Ratio of 1.64. The chart below compares the historical Sharpe Ratios of USVN and SMBS, 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

	USVN	SMBS	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.84	1.64	-0.80
Sharpe Ratio (All Time) Calculated using the full available price history	0.41	1.18	-0.77

Drawdowns

USVN vs. SMBS - Drawdown Comparison

The maximum USVN drawdown since its inception was -8.27%, which is greater than SMBS's maximum drawdown of -3.20%. Use the drawdown chart below to compare losses from any high point for USVN and SMBS.

Drawdown Indicators

	USVN	SMBS	Difference
Max Drawdown Largest peak-to-trough decline	-8.27%	-3.20%	-5.07%
Max Drawdown (1Y) Largest decline over 1 year	-3.68%	-2.83%	-0.85%
Max Drawdown (3Y) Largest decline over 3 years	-5.89%	—	—
Current Drawdown Current decline from peak	-2.67%	-1.33%	-1.34%
Average Drawdown Average peak-to-trough decline	-2.34%	-0.84%	-1.50%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.24%	0.83%	+0.41%

Volatility

USVN vs. SMBS - Volatility Comparison

The current volatility for US Treasury 7 Year Note ETF (USVN) is 1.37%, while Schwab Mortgage-Backed Securities ETF (SMBS) has a volatility of 1.55%. This indicates that USVN experiences smaller price fluctuations and is considered to be less risky than SMBS based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	USVN	SMBS	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.37%	1.55%	-0.18%
Volatility (6M) Calculated over the trailing 6-month period	2.98%	3.03%	-0.05%
Volatility (1Y) Calculated over the trailing 1-year period	4.26%	4.15%	+0.11%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	5.79%	4.86%	+0.93%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	5.79%	4.86%	+0.93%

USVN vs. SMBS - Expense Ratio Comparison

USVN has a 0.15% expense ratio, which is higher than SMBS's 0.03% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

USVN vs. SMBS - Dividend Comparison

USVN's dividend yield for the trailing twelve months is around 3.75%, less than SMBS's 5.17% yield.

Position	TTM	2025	2024	2023
SMBS Schwab Mortgage-Backed Securities ETF	5.17%	4.83%	0.50%	0.00%
USVN US Treasury 7 Year Note ETF	3.75%	3.81%	4.07%	2.91%

Frequently Asked Questions

Can I hold both USVN and SMBS in my portfolio?

With a correlation of 0.90, USVN and SMBS 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, USVN or SMBS?

SMBS has higher volatility (1.55%) compared to USVN (1.37%). In terms of maximum drawdown, USVN dropped -8.27% vs SMBS's -3.20%.

Which ETF is better, USVN or SMBS?

On 1-year performance, SMBS leads with 6.78% vs 3.56% for USVN. On fees, SMBS is cheaper at 0.03% per year. On volatility, USVN has been the lower-risk option at 1.37%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, USVN or SMBS?

Over the 1-year period, SMBS has performed better with a 6.78% return vs 3.56%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, USVN or SMBS?

SMBS is cheaper with a 0.03% expense ratio, compared with 0.15% for USVN.

Which ETF pays a higher dividend yield, USVN or SMBS?

SMBS has the higher dividend yield at 5.17%, compared with 3.75% for USVN.

What is the main difference between USVN and SMBS?

USVN is categorized as Government Bonds, while SMBS is Mortgage Backed Securities. USVN tracks ICE BofA Current 7-Year US Treasury Index - Benchmark TR Gross, while SMBS tracks Bloomberg US MBS Float Adjusted Total Return Index. They also come from different issuers: US Benchmark Series and Charles Schwab. Their fees differ too: 0.15% for USVN and 0.03% for SMBS.

Which has better risk-adjusted returns?

SMBS currently has the higher Sharpe Ratio (1.64 vs 0.84), 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.