Investing - Theory, News & General • Re: Comparing a 10-Year Individual US Treasury vs. iShares iBonds ETF

I am trying to decide where to lock in yield for the next decade with a $100,000 investment. Assuming both are held strictly until maturity in 10 years, which option will provide a higher total payout?
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Hi CWRadio,

We can't answer your question as posed.
1) While you can buy either investment with no commission, both trade in a secondary market and thus have bid/ask spreads. Those spreads are not known ahead of time. The spreads (a few basis points) could very well be large enough to tip the balance.

2) For a fair comparison, you need to have both options be invested for the same period of time, right? So you would need to compare two things that mature at the same time. But the ETF holds a set of 2036 Treasuries that mature over the course of 2036, and their proceeds are then invested into as-yet-unknown-yield money market fund until the whole ETF is liquidated in December. By comparison an individual Treasury only matures once. You could pick an individual Treasury that mature on the same day the ETF liquidates. Maybe you've done that -- is the 5.17% rate for a particular Treasury? What's the CUSIP and maturity date?

I suggest focusing on the fact that the YTM of both options are so close that the ending total return comparison will be insignificant.

Instead, choose the option that's more convenient or preferable for other reasons. E.g., are you comfortable purchasing individual bonds versus ETFs? Or what will you do with the coupons or dividend payments (reinvest or spend or invest in something else). Or are you familiar with the tax reporting requirements for individual bonds (1099-INT) versus ETFs (1099-DIV)? Those things all involve time & expertise, which is a another "cost" to you. In my opinion, those costs are more relevant than the strictly financial total return question.

Statistics: Posted by sycamore — Sat Sep 26, 2026 9:19 am