Generated June 2026 from current fund data.
Overview
SGOV and USFR are both Treasury-focused ETFs offering monthly income, but they hold very different maturity profiles. SGOV owns ultra-short bills maturing in zero to three months and sits at the very edge of the yield curve. USFR holds floating-rate Treasury notes, which reset their coupon based on prevailing rates and typically extend further out the curve. The practical difference: SGOV behaves almost like a money-market fund with razor-thin duration risk, while USFR carries modest interest-rate sensitivity and benefits when rates stay flat or rise.
How they differ
The biggest distinction is maturity and structure. SGOV holds only T-bills in the 0–3 month bucket—essentially government IOUs coming due in weeks—while USFR holds floating-rate notes that reprice at intervals tied to current Treasury rates. That means SGOV has nearly zero duration (beta of -0.0029 vs. USFR's -0.02), so its price barely budges when the yield curve shifts. USFR's floating coupons reset regularly, which insulates it from the capital losses a traditional bond fund would suffer if rates spike, but it also means USFR's yield moves directly with market rates.
On yield, they're nearly identical at 3.57% and 3.61%, but they get there differently. SGOV's yield comes from steeply discounted T-bill prices rolling off quickly; USFR's yield comes from coupon resets. The cost to own them also differs: SGOV charges 0.07% annually while USFR is 0.15%, a gap that widens on the much smaller $17.3B asset base. SGOV has been around since 2020, while USFR has a decade-long track record dating to early 2014.
Who each is best for
SGOV: Fits investors who want to park short-term reserves or emergency cash in a government fund while capturing minimal yield, with no meaningful price swings and extreme simplicity. Also matches portfolios that need duration-neutral, very-low-risk bond exposure.
USFR: Designed for investors who expect rates to hold steady or drift higher and want some yield cushion from repricing mechanics, yet still maintain meaningful Treasury credit quality and low volatility. Works for those comfortable with small price moves in exchange for a modestly higher coupon.
Key risks to know
- Rate-rise insulation is asymmetrical in USFR. Floating-rate notes protect against losses when rates climb, but they also mean USFR's yield ceiling is set by the Fed's policy rate. If rates fall sharply, USFR's coupon drops in lockstep—the opposite of SGOV, which is unaffected by curve moves.
- SGOV faces reinvestment drag in a declining-rate environment. As bills roll off every few weeks, maturing principal gets reinvested at prevailing rates. In a falling-rate regime, that roll-down can pressure yield noticeably—a structural headwind USFR avoids through its repricing mechanism.
- USFR carries modest basis-risk exposure. The fund tracks the Bloomberg index of floating-rate Treasuries, not the Fed's administered rate directly. Deviations between that index and actual rates can occur, especially during market stress or wide bid-ask spreads.
- SGOV's size and popularity can create small tax friction. At $95.2B in assets, trading costs and tax efficiency are minimal, but in periods of heavy flows, creations and redemptions can lag behind actual bill prices.
Bottom line
If you want maximal stability and near-zero duration risk with the lowest possible cost, SGOV stands out—it's a money-market replacement with Treasury backing. If you're betting rates stay elevated or stable and willing to accept modest price moves in exchange for slightly higher yield, USFR's floating-rate structure and repricing protection offer a different profile. Past performance does not predict future returns; both are sensitive to Federal Reserve policy shifts.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
