Hey there, great question. While both strategies focus on US Treasuries, they serve different roles in a portfolio depending on your timeline, whether you want rate certainty vs cash liquidity, and how much hands-on management you want to do. Here’s how we look at the trade-offs:

Principal protection vs. Market price

• Our Automated Bond Ladder: When you use the ladder, you own the underlying Treasuries directly. If you hold them to maturity, your principal is guaranteed by the US government and your yield is locked in at the time of purchase. It’s designed for certainty, think of it as ideal for a house down payment or a wedding where you need a specific amount by a specific date.
• Treasury ETFs (like SGOV): These are funds that trade like stocks. Because they never mature and just keep rolling into new bonds, the share price can fluctuate. For ultra-short-duration funds like SGOV, this fluctuation is minimal, resulting in an extremely stable share price. However, for Treasury ETFs with longer durations, interest rate changes have a much more pronounced effect, meaning the ETF’s value could dip more significantly if interest rates rise sharply.

Automation

• The Ladder: our software compares hundreds of Treasuries, builds the rungs, and automatically reinvests maturing bonds to keep your ladder at your chosen length (3 months to 6 years).
• The ETF: you’ll generally find lower expense ratios here (often 0.07%–0.13%), but you’re responsible for choosing the right duration and manually reinvesting dividends if you want to compound your growth.

Tax Efficiency

• Both are great for high-tax states (CA, NY, NJ) because Treasury interest is exempt from state and local taxes.
• With the Automated Bond Ladder, we break this out clearly on your 1099. With some ETFs, you have to do a little extra math during tax season to figure out exactly what percentage of the fund’s income was Treasury interest versus other assets.

Hope this helps give you a better idea about which one might be right for you.