BIL vs SGOV: Which Is the Better Pick in 2026?

Overview

BIL and SGOV are both ultra-short-duration Treasury ETFs designed to track the yield on U.S. government debt maturing in three months or less. BIL uses the Bloomberg 1-3 Month T-Bill Index and holds pure Treasury bills; SGOV tracks the ICE 0-3 Month Treasury Securities Index and includes both bills and bonds. The main distinction is their underlying indices and fee structure: BIL is slightly more expensive (14 basis points) but has much deeper assets ($50 billion vs. $84 billion), while SGOV is cheaper and fractionally higher-yielding.

How they differ

The biggest difference is their underlying indices. BIL holds exclusively Treasury bills (short-term discount instruments maturing in 1–3 months), while SGOV includes both bills and bonds in its 0–3 month maturity window. This means SGOV may hold some coupon-paying Treasury notes alongside bills, creating minor structural differences in how yield accrues.

Second, SGOV has a cost advantage: its 9 basis point expense ratio beats BIL's 14 basis points. That 5 bps gap compounds over time, especially in a low-yield environment. SGOV also sports a marginally higher distribution rate (3.59% vs. 3.53%), likely reflecting recent Treasury curve positioning.

Third, SGOV is the newer, larger fund—launched in 2020 with $83.5 billion in assets, versus BIL's $50 billion. Both trade with near-zero beta and minimal price volatility (52-week range under 2% for each), so size and duration are functionally equivalent for most holders.

Who each is best for

BIL: Investors who want pure Treasury bill exposure with a 19-year track record and established liquidity; those using this as a stable value or cash-equivalent core holding in taxable accounts where the slightly higher fee is outweighed by brand recognition and institutional adoption.

SGOV: Cost-conscious investors seeking the lowest fees in the ultra-short Treasury space, and those indifferent to whether their short-term Treasury allocation includes bills or bonds—slightly better yield and a smaller fee drag make it the default choice for passive allocators.

Key risks to know

• Interest rate risk (modest). If the Fed raises rates, the market value of SGOV and BIL will barely budge due to their 0–3 month duration. If rates fall, neither fund will appreciate meaningfully. This is a feature for capital stability but a drag on total returns in a declining-rate environment.

• Reinvestment risk. As bills and bonds mature (often within weeks), proceeds are reinvested at whatever current rates prevail. In a falling-rate scenario, rolling Treasury yields lower could reduce distributions month to month.

• NAV stability. Both trade very close to $100 NAV due to minimal credit and duration risk. Any divergence would signal technical disruption, not fundamental concern.

• Opportunity cost. These funds capture only the risk-free rate. Investors seeking higher yield must accept equity, credit, or duration risk elsewhere in the portfolio.

Bottom line

If you're filling a cash-equivalent or ultra-safe reserve sleeve, SGOV's combination of lower fees (9 bps) and marginally higher yield (3.59%) makes it the more efficient choice. BIL remains a solid alternative with deeper assets and a longer operational history. Neither is appropriate as a total-return engine—both are designed to preserve capital and generate steady short-term income. Past distributions reflect current Treasury rates and will fluctuate with Fed policy.