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

Overview

BIL and SGOV are both money-market Treasury ETFs tracking ultra-short-term U.S. government debt—BIL focuses on 1-3 month T-bills via the Bloomberg index, while SGOV holds 0-3 month Treasury securities using the ICE index. Both deliver monthly distributions with yields near 3.5%, minimal credit risk, and expense ratios under 0.15%. The key distinction is fund size, cost, and index methodology: SGOV is nearly twice as large ($95.2B vs. $47.8B), costs half as much to own (0.07% vs. 0.14%), and tracks a slightly broader Treasury window.

How they differ

SGOV's expense ratio of 0.07% is half BIL's 0.14%, a meaningful gap for an investor holding either fund long-term—over a decade, that 70 basis-point difference compounds. SGOV also commands $95.2B in assets against BIL's $47.8B, suggesting deeper liquidity and lower bid-ask spreads, though both funds are large enough for retail investors to trade without friction. The index difference is subtle: BIL tracks 1-3 month bills specifically, while SGOV's 0-3 month window includes very short-term Treasury securities that may settle faster or carry marginally different roll characteristics. Both deliver similar current yields (3.51% for BIL, 3.54% for SGOV) and pay monthly, so income timing is identical.

Who each is best for

BIL: Fits investors seeking a straightforward, long-established Treasury bill ETF with minimal price volatility and a simple benchmark that owns only pure T-bills maturing within three months.

SGOV: Designed for cost-conscious investors prioritizing the lowest possible fee drag on a short-term Treasury allocation and valuing the liquidity edge that comes with a larger asset base.

Key risks to know

• NAV stability at near-zero yields. Both funds' NAV is tightly anchored to the yield environment; a sharp drop in short-term rates would compress both current yield and price appreciation potential, leaving holders with minimal total return in a risk-off scenario.

• Duration and reinvestment risk. With average maturities in the 1-3 month range, both funds roll positions frequently; if rates decline significantly between rollover windows, reinvestment of maturing securities occurs at lower yields, reducing income over time.

• Index tracking and roll costs. BIL and SGOV depend on their respective index providers' inclusion and weighting rules; shifts in Treasury auction calendars or index methodology changes could create temporary tracking error or cost unexpected rebalancing activity.

• Opportunity cost in rising-rate environments. If longer-term rates rise faster than short rates, neither fund captures the yield-curve steepening that longer-duration Treasury investors would benefit from, locking the holder into the shortest maturity segment.

Bottom line

SGOV's lower fee (0.07% vs. 0.14%) and larger scale make it the more efficient option for most investors holding T-bill exposure as a cash substitute or short-term allocation. BIL offers a more familiar index structure and longer track record, which may appeal to investors seeking simplicity over cost optimization. Both carry minimal credit and duration risk; the choice hinges on whether the fee savings and liquidity depth of SGOV matter more than the index clarity of BIL. Past performance in either fund does not predict future results in changing rate environments.