ZTWO vs. DFSD

Last updated Jun 4, 2026

ZTWO (F/M 2-Year Investment Grade Corporate Bond ETF) and DFSD (Dimensional Short-Duration Fixed Income ETF) are both Short-Term Bond funds. ZTWO is passively managed, while DFSD is actively managed. Over the past year, ZTWO returned 4.02% vs 4.23% for DFSD. Their correlation of 0.85 suggests significant overlap in exposure. ZTWO charges 0.15%/yr vs 0.16%/yr for DFSD.

Performance

ZTWO vs. DFSD - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in F/M 2-Year Investment Grade Corporate Bond ETF (ZTWO) and Dimensional Short-Duration Fixed Income ETF (DFSD). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, ZTWO achieves a 0.89% return, which is significantly higher than DFSD's 0.62% return.

ZTWO

• 1D: 0.00%
• 1M: 0.30%
• YTD: 0.89%
• 6M: 1.21%
• 1Y: 4.02%
• 3Y*: —
• 5Y*: —
• 10Y*: —

DFSD

• 1D: -0.13%
• 1M: 0.23%
• YTD: 0.62%
• 6M: 0.86%
• 1Y: 4.23%
• 3Y*: 5.33%
• 5Y*: —
• 10Y*: —

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

ZTWO vs. DFSD - Yearly Performance Comparison

	2026 (YTD)	2025	2024
ZTWO F/M 2-Year Investment Grade Corporate Bond ETF	0.89%	5.49%	0.36%
DFSD Dimensional Short-Duration Fixed Income ETF	0.62%	6.59%	0.28%

Correlation

The correlation between ZTWO and DFSD is 0.84, 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	0.84
Correlation (All Time) Calculated using the full available price history since Dec 20, 2024	0.85

The correlation between ZTWO and DFSD has been stable across timeframes, ranging from 0.84 to 0.85 - a consistent structural relationship.

Return for Risk

ZTWO vs. DFSD — Risk / Return Rank

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

ZTWO

ZTWO Risk / Return Rank: 90
ZTWO Sharpe Ratio Rank: 90
ZTWO Sortino Ratio Rank: 94
ZTWO Omega Ratio Rank: 93
ZTWO Calmar Ratio Rank: 82
ZTWO Martin Ratio Rank: 90

DFSD

DFSD Risk / Return Rank: 67
DFSD Sharpe Ratio Rank: 66
DFSD Sortino Ratio Rank: 76
DFSD Omega Ratio Rank: 73
DFSD Calmar Ratio Rank: 58
DFSD Martin Ratio Rank: 62

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.

ZTWO vs. DFSD - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for F/M 2-Year Investment Grade Corporate Bond ETF (ZTWO) and Dimensional Short-Duration Fixed Income ETF (DFSD). 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.

	ZTWO	DFSD	Difference
Sharpe ratio: Return per unit of total volatility	3.09	2.24	+0.85
Sortino ratio: Return per unit of downside risk	4.96	3.44	+1.52
Omega ratio: Gain probability vs. loss probability	1.64	1.44	+0.20
Calmar ratio: Return relative to maximum drawdown	4.32	2.90	+1.43
Martin ratio: Return relative to average drawdown	20.46	11.21	+9.25
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

ZTWO vs. DFSD - Sharpe Ratio Comparison

The current ZTWO Sharpe Ratio is 3.09, which is higher than the DFSD Sharpe Ratio of 2.24. The chart below compares the historical Sharpe Ratios of ZTWO and DFSD, 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

	ZTWO	DFSD	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	3.09	2.24	+0.85
Sharpe Ratio (All Time) Calculated using the full available price history	3.16	0.91	+2.24

Drawdowns

ZTWO vs. DFSD - Drawdown Comparison

The maximum ZTWO drawdown since its inception was -0.93%, smaller than the maximum DFSD drawdown of -8.45%. Use the drawdown chart below to compare losses from any high point for ZTWO and DFSD.

Drawdown Indicators

	ZTWO	DFSD	Difference
Max Drawdown Largest peak-to-trough decline	-0.93%	-8.45%	+7.52%
Max Drawdown (1Y) Largest decline over 1 year	-0.93%	-1.47%	+0.54%
Max Drawdown (3Y) Largest decline over 3 years	—	-1.47%	—
Current Drawdown Current decline from peak	-0.11%	-0.44%	+0.33%
Average Drawdown Average peak-to-trough decline	-0.10%	-2.07%	+1.97%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.20%	0.38%	-0.18%

Volatility

ZTWO vs. DFSD - Volatility Comparison

The current volatility for F/M 2-Year Investment Grade Corporate Bond ETF (ZTWO) is 0.42%, while Dimensional Short-Duration Fixed Income ETF (DFSD) has a volatility of 0.64%. This indicates that ZTWO experiences smaller price fluctuations and is considered to be less risky than DFSD based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	ZTWO	DFSD	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.42%	0.64%	-0.22%
Volatility (6M) Calculated over the trailing 6-month period	0.97%	1.47%	-0.50%
Volatility (1Y) Calculated over the trailing 1-year period	1.31%	1.90%	-0.59%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	1.49%	2.78%	-1.29%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	1.49%	2.78%	-1.29%

ZTWO vs. DFSD - Expense Ratio Comparison

ZTWO has a 0.15% expense ratio, which is lower than DFSD's 0.16% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

ZTWO vs. DFSD - Dividend Comparison

ZTWO's dividend yield for the trailing twelve months is around 4.12%, more than DFSD's 3.98% yield.

Position	TTM	2025	2024	2023	2022	2021
DFSD Dimensional Short-Duration Fixed Income ETF	3.98%	4.12%	4.81%	3.89%	2.12%	0.11%
ZTWO F/M 2-Year Investment Grade Corporate Bond ETF	4.12%	4.31%	0.39%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both ZTWO and DFSD in my portfolio?

ZTWO and DFSD have a correlation of 0.84, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, ZTWO or DFSD?

DFSD has higher volatility (0.64%) compared to ZTWO (0.42%). In terms of maximum drawdown, ZTWO dropped -0.93% vs DFSD's -8.45%.

Which ETF is better, ZTWO or DFSD?

On 1-year performance, DFSD leads with 4.23% vs 4.02% for ZTWO. On fees, ZTWO is cheaper at 0.15% per year. On volatility, ZTWO has been the lower-risk option at 0.42%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, ZTWO or DFSD?

Over the 1-year period, DFSD has performed better with a 4.23% return vs 4.02%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, ZTWO or DFSD?

ZTWO is cheaper with a 0.15% expense ratio, compared with 0.16% for DFSD.

Which ETF pays a higher dividend yield, ZTWO or DFSD?

ZTWO has the higher dividend yield at 4.12%, compared with 3.98% for DFSD.

What is the main difference between ZTWO and DFSD?

They also come from different issuers: F/m and Dimensional. Their fees differ too: 0.15% for ZTWO and 0.16% for DFSD.

Which has better risk-adjusted returns?

ZTWO currently has the higher Sharpe Ratio (3.09 vs 2.24), 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.