SGOV vs. BIL – Which ETF for U.S. T-Bills?

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SGOV and BIL are two popular ETFs for U.S. Treasury Bills. Is there a clear choice? Let’s compare them.

// SUMMARY:

Treasury bills, or T-bills for short, are just ultra-short-term bonds from the U.S. government. These short bonds with maturities of less than a year are called bills. T-bills are referenced as the “risk-free asset” because they are backed by the full faith and credit of the United States government and thus have no liquidity risk or default risk.

T-bills are looking particularly attractive right now in early 2024 because interest rates are pretty high. As of April 1, 2024, the 3-month T-bill rate is 4.80%. This makes T-bills a safe place to park cash and still get a decent return.

ETFs provide the convenience of not having to buy or manage individual bonds yourself. I covered some T-bills ETFs in a separate post here. Two of the most popular are SGOV from iShares and BIL from SPDR.

BIL is one of the oldest ETFs for T-bills, having launched in 2007. It is the SPDR Bloomberg 1-3 Month T-Bill ETF. Its age and authority make it the most popular with over $30B in assets.

SGOV, the iShares 0-3 Month Treasury Bond ETF, is much newer and launched in 2020, but has quickly amassed about $10B in assets due to its being the most affordable ETF for T-bills with an expense ratio of 0.05%. This is roughly 1/3 the price of BIL at 0.14%. This difference in fees has allowed SGOV to outperform BIL over its short lifespan.

It’s worth noting that SGOV has a fee waiver of 0.07% in place that has been renewed every year since its inception, though it’s not necessarily guaranteed past June 30, 2024. That said, even without it, an expense ratio of 0.12% would still be cheaper than BIL.

Other than that, these funds can be considered nearly identical. Both hold T-bills with maturities of 3 months or less, albeit via different indexes. SGOV seeks to track the ICE 0-3 Month US Treasury Securities Index while BIL seeks to track the Bloomberg 1-3 Month U.S. Treasury Bill Index.

While both funds would be considered highly liquid, day traders may appreciate the relatively greater liquidity of BIL, though I’m not sure why you’d be day-trading a T-bills fund in the first place.

In conclusion, for basically the same asset, SGOV seems like the clear winner in my opinion.

Do you own SGOV or BIL? Let me know in the comments.

#tbills #treasurybills #interestrates

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Do you own SGOV or BIL or are you considering buying either?

OptimizedPortfolio
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You have a new fan in me. Thanks for making these videos

sushmithhiremath
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I'm very new to investing and your channel has been very helpful. Just from comparing these ETFs, SGOV seems to have slightly higher dividend yields and lower volatility than BIL other short-duration bond ETFS such as VGSH, SHV, VUSB. The only one that seems to beat it is CLTL with slightly higher yield, but higher volatility. It seems like SGOV is the best in this class for me.

iank
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Thanks for the video. I invested in BIL in February, and somehow my P/L is showing as -$3.04.... HOw can this be possible? Am I not accruing interest payments on this ETF?

WISSPORTS
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Nice video, short and informative. Can these 2 be interchanged for tx harvest?

dimzoll
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very good video: clear, synthetic and practical. Could you do something similar with TIPS bond ETFs?

jonathanlvp
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Hello there! Which one would you choose for an optimal HYSA substitute: USFR; SGOV; CLTL; BIL? Essentially I need something to park an emergency fund and/or a place to set aside some money for medium term purchases within 12/24/36 months. Also, it's emportant to be able to liquadate a position within a week with minimum losses. Thanks a lot!

OlexiySamokysha
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Thanks for your comparison, I owned USFR, better performance than BIL & SGOV

鱼眼儿看美股
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2:12 Maybe a short sale to borrow near the risk free rate.

ManforSomeMarkets
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I own BIL through a brokerage and the interest has been remaining the same for months now (invested in early May - till now July). So I'm wondering whether this is usual? Ain't your interest supposed to increase every month?

Surfingonearth
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I'm in a tossup between money market funds, sgov, and boxx for the upper tier of my emergency fund (anything beyond three months of living expenses). Boxx sounds ideal but it is something i am still attempting to wrap my head around. SGOV looks like a good place to park money but I still need to weigh the merits against money market funds.

richardshipe
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Two questions: 1. Is the best time to purchase these ETFs the first of each month? 2. Are these ETFs treated the same tax wise as a to bill itself (No state tax)?

bradleyfletcher
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Should I reinvest the dividend to buy back BIL?

crewever
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Why did longer term treasury ETF like TLT crash while BIL stayed more stable

erickSPY
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Stupid question, i'm very new to investing. How do I invest in Sgov? Can I use Fidelity?

nicolette
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Thorough and succinct video! I own SGOV over BIL. Btw do you have a video about t bills/money market funds vs bonds ETF like BND?

couldbe
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How is the fee charged? Every month? Quarterly?

zhiqiuli
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In case of BIL, should I buy and sell the ETF monthly? O just hold it to receive the interest payment?

pmolglw
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1) are either of these ETFs influenced by the election?

2) Will my money be safe (will I be able to get the same amount i put into it if things go wrong?)

kikimill
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Have you looked into the ETF Ticker: TBIL

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