Wealthy PotSGOV vs VMFXX (2026)
The Vanguard version of the sweep-versus-ETF question. VMFXX is the settlement fund your cash falls into automatically at Vanguard, at 0.11%. SGOV is an ETF you must buy, at 0.09%, holding only T-bills. The fee difference is trivial; the tax difference is not. SGOV’s income is almost entirely Treasury interest and generally escapes state and local tax, while VMFXX holds agency paper and repos alongside Treasuries. In a taxable account in a high-tax state, that favours SGOV. For cash you actually transact with, VMFXX’s automatic sweep is hard to give up.
By Wealthy Pot · Last updated September 2026
| Feature | SGOV | VMFXX |
|---|---|---|
| Provider | iShares (BlackRock) | Vanguard |
| Wrapper | Exchange-traded fund | Money-market fund |
| Holdings type | Treasury | Government |
| Yield (SEC) | 3.65% (30-day SEC yield, 2026-09-17) | 3.63% (7-day SEC yield) |
| Share price | Floating share price (~$100), not a stable $1.00 NAV | Stable $1.00 NAV (targeted, not guaranteed) |
| Expense ratio | 0.09% | 0.11% |
| Minimum | One share (about $100) | $0 (as the settlement fund; $3,000 standalone) |
| State tax | Holds only short-dated U.S. Treasury bills, so nearly all income is typically exempt from state and local tax | Partly state-tax-exempt (66.6% U.S. government obligations, 2025 — met the CA/CT/NY threshold) |
| Auto-sweep? | No — an exchange-traded fund you buy and sell yourself; it can never be an automatic core position | Yes — the Vanguard brokerage settlement fund |
| Best for | Taxable investors in high-tax states who will park cash for a while and do not need instant sweep access | Vanguard investors — it is the default settlement fund and very cheap |
Where SGOV wins
- A 0.09% expense ratio and almost pure T-bill income, which is the most state-tax-efficient way to hold cash
Where VMFXX wins
- The Vanguard brokerage settlement fund — cash lands here automatically
- A very low 0.11% expense ratio, so a high net yield
- Government fund with lower credit risk
- Portion of income is state-tax-exempt
Which should you choose?
The Vanguard version of the sweep-versus-ETF question. VMFXX is the settlement fund your cash falls into automatically at Vanguard, at 0.11%. SGOV is an ETF you must buy, at 0.09%, holding only T-bills. The fee difference is trivial; the tax difference is not. SGOV’s income is almost entirely Treasury interest and generally escapes state and local tax, while VMFXX holds agency paper and repos alongside Treasuries. In a taxable account in a high-tax state, that favours SGOV. For cash you actually transact with, VMFXX’s automatic sweep is hard to give up.
Compare these against every fund in our money-market fund comparison.
We summarize the funds' published facts, not user reviews. Yields are variable, change daily, and are re-checked against each fund's official page. Neither money-market funds nor ETFs are FDIC-insured, and an ETF's share price can fall as well as rise. Some outbound links may be affiliate links — that never affects our comparisons. Nothing here is financial advice.