Mortgage bond ETF MBB lagged Treasuries by $9,630 on $300K in 2020 due to refinancing effects, not fees.

In 2020, the iShares MBS ETF (MBB) returned 4.08%, trailing the iShares U.S. Treasury Bond ETF (GOVT) which returned 7.29%, costing a $300,000 investor $9,630 in gains. This gap is mainly due to homeowners refinancing mortgages when rates fall, causing mortgage bonds to be repaid early and reinvested at lower yields, limiting price gains. Treasuries lack this prepayment risk, allowing them to benefit more from falling rates. Investors should understand that mortgage bond ETFs behave differently from Treasuries, especially in rate changes, and consider their portfolio goals accordingly.

As of Nov 03, 2026 00:21 WIB, the iShares MBS ETF (MBB) trades at USD 91.86 with a 1-day change of -0.21%, while the iShares 3-7 Year Treasury Bond ETF (IEI) is priced at USD 115.03, down 0.26% for the day on Pluang. Despite the historical underperformance of MBB versus Treasuries in 2020, both ETFs show similar small declines today. Notably, MBB's market cap stands at $35.89 billion, reflecting its significant presence in fixed income investing on Pluang.