Wealthy PotSGOV vs USFR: Cheaper T-Bills or Floating-Rate Treasuries?
Table of Contents
The Short Answer
- They share no bonds. SGOV holds Treasury bills that mature within three months. USFR holds Treasury floating-rate notes, which run for two years. On their 31 May 2026 holdings filings the two funds had zero securities in common.
- SGOV is cheaper. 0.09% a year against USFR's 0.15%, a gap of $6 a year per $10,000.
- USFR has paid a little more anyway. To 30 June 2026, USFR returned 4.01% over one year against SGOV's 3.90%, and it beat SGOV in each full calendar year from 2022 to 2024, by 0.12 to 0.30 points.
- Yields are close. USFR's 30-day SEC yield was 3.81% on 29 September 2026. SGOV's was 3.70% on 1 October 2026.
- Both barely move when rates change. iShares put SGOV's effective duration at 0.11 years. WisdomTree put USFR's at 0.02 years. A floating-rate note's coupon resets weekly off the 13-week bill auction, so its price has little reason to drift.
- Both are Treasury-only. Federal law exempts interest on US government obligations from state and local income tax. Whether that exemption reaches you through a fund depends on your state.
- Pick one, not both. For the lowest cost and the simplest holdings, SGOV. If you are comfortable paying 6 basis points more for a coupon tied to the 13-week bill plus a fixed spread, USFR is a reasonable alternative.
Zero Shared Bonds: What Each One Holds
Both funds hold nothing but US Treasury debt, but they hold different kinds of it. SGOV tracks the ICE 0-3 Month US Treasury Securities Index, which its prospectus says covers "public obligations of the U.S. Treasury that have a remaining maturity of less than or equal to three months." The index requires "a fixed coupon schedule," so floating-rate notes are not eligible. USFR tracks the Bloomberg U.S. Treasury Floating Rate Bond Index, which "excludes fixed-rate securities."
So the two portfolios cannot overlap by design. We checked the funds' SEC Form N-PORT filings for the period ended 31 May 2026:
- SGOV held 22 Treasury bill positions maturing between 2 June and 27 August 2026, plus a small money market fund position.
- USFR held four Treasury floating-rate notes, maturing 31 July 2027, 31 October 2027, 31 January 2028 and 30 April 2028, plus 0.008% in a Treasury money market fund.
Matched by CUSIP, the overlap is 0%. USFR is not in our Portfolio Overlap Checker dataset, so this figure is our own calculation from the two filings. Note that the checker matches bond funds by issuer, and both funds have only one issuer, the US Treasury. A checker that grouped by issuer would call these funds identical, which tells you nothing useful about how they behave.
USFR's own page, read on 5 October 2026, showed the fund rolled forward since May: four notes maturing October 2027, January 2028, April 2028 and July 2028, each about 25% of the fund. WisdomTree listed an average of 1.44 years to maturity.
SGOV vs USFR, Side by Side
| SGOV | USFR | |
|---|---|---|
| Full name | iShares 0-3 Month Treasury Bond ETF | WisdomTree Floating Rate Treasury Fund |
| Index | ICE 0-3 Month US Treasury Securities Index | Bloomberg U.S. Treasury Floating Rate Bond Index |
| What it holds | Treasury bills maturing within 3 months | 2-year Treasury floating-rate notes |
| Expense ratio | 0.09% | 0.15% |
| Prospectus cost example, $10,000 over 10 years | $115 | $192 |
| Holdings (N-PORT, 31 May 2026) | 22 T-bill positions | 4 floating-rate notes |
| 30-day SEC yield | 3.70% (1 Oct 2026) | 3.81% (29 Sep 2026) |
| Effective duration | 0.11 years (1 Oct 2026) | 0.02 years (2 Oct 2026) |
| Average maturity | 0.11 years (1 Oct 2026) | 1.44 years (2 Oct 2026) |
| Net assets | $113.1 billion (2 Oct 2026) | $20.0 billion (2 Oct 2026) |
| 30-day median bid/ask spread | 0.01% (2 Oct 2026) | 0.02% (2 Oct 2026) |
| Distributions | Monthly | Monthly in each of the last four months shown |
| Inception | 26 May 2020 | 4 February 2014 |
One line needs context. The duration figures come from two different issuers' models, so read them as "both close to zero," not as a precise ranking.
How a Floating-Rate Treasury Pays
A Treasury bill is sold at a discount and pays face value at maturity. The rate is fixed for the bill's short life, and SGOV's yield moves as old bills mature and new ones are bought. With everything maturing within three months, the fund's income catches up with new rates within weeks.
A floating-rate note works differently. TreasuryDirect describes it as a security that matures in two years, pays interest every three months, and carries a rate that is "the sum of two components: an index rate and a spread." The index rate "is tied to the highest accepted discount rate of the most recent 13-week Treasury bill. We auction the 13-week Treasury bill every week, so the index rate of an FRN is reset every week." The spread "stays the same for the life of an FRN" and is set at the note's first auction.
USFR's prospectus says the same thing in fund terms: the index rate "is reset daily based on a weekly rate according to the result of the most recent 13-week T-bill auction," and "because FRN index rates reset daily based on a weekly rate, the value of an FRN generally fluctuates much less than that of a fixed-rate bond in response to market interest rate movements."
The practical upshot: both funds pass changes in short-term rates through to you within weeks. USFR adds the fixed spread on top of the 13-week bill rate. SGOV's yield reflects whatever bills are maturing between now and three months out.
Returns Over Identical Periods
| Calendar year, total return at NAV | SGOV | USFR | Gap (USFR minus SGOV) |
|---|---|---|---|
| 2021 | 0.02% | 0.01% | -0.01 |
| 2022 | 1.58% | 1.88% | +0.30 |
| 2023 | 5.13% | 5.26% | +0.13 |
| 2024 | 5.28% | 5.40% | +0.12 |
| Average annual total return at NAV, to 30 June 2026 | 1 year | 3 years | 5 years |
|---|---|---|---|
| SGOV | 3.90% | 4.68% | 3.59% |
| USFR | 4.01% | 4.75% | 3.72% |
USFR came out ahead on every comparable period except 2021, when both returned close to nothing because short rates were near zero. The margins are small, about a tenth of a point a year, and they came despite USFR's higher fee. We are not going to claim a single cause. What the documents do show is that USFR's coupon is the 13-week bill rate plus a spread fixed at auction, while SGOV holds bills of up to three months.
Past performance does not guarantee future results. This is educational information, not personalised investment advice.
What Happens When Rates Move
Neither fund locks in a rate. That is the point of both, and also the cost. When the Federal Reserve cuts and bill auctions clear lower, SGOV's yield falls as its bills roll over, and USFR's coupons fall as the weekly index rate resets. Within a few months, both will be paying roughly the new short-term rate.
The flip side is that neither fund loses much when rates jump. SGOV's worst calendar quarter in its prospectus chart period was 0.00%, in the fourth quarter of 2021. USFR's worst quarter in its ten-year chart was -0.08%, in the third quarter of 2015, and 2015 was the only calendar year in that chart with a loss. Compare that with a 1-3 year Treasury fund: Vanguard's VGSH lost 3.86% in 2022. We cover that trade-off in SGOV vs VGSH.
USFR's prospectus names the one way a floating-rate note can lose value: "FRN values, however, will decline if their index rates do not rise as much, or as quickly, as interest rates in general." It also notes that the fund "generally redeems shares for cash," which "may cause the Fund to recognize capital gains" and possibly distribute more of them than a fund that redeems in kind. Its four distributions from June to September 2026 were all ordinary income, with no capital gains.
If you want a rate locked for a known period, these funds are the wrong tool. A ladder of Treasury bills or a CD does that. See CDs vs Treasury bills.
State Tax on Treasury Interest
The federal rule is written into the US Code. 31 U.S.C. § 3124(a) says: "Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State." IRS Publication 550 puts it more plainly: "Interest income from Treasury bills, notes, and bonds is subject to federal income tax but is exempt from all state and local income taxes." TreasuryDirect's FRN page says the same for floating-rate notes: "No state or local taxes."
That covers Treasuries you own directly. A fund pays you dividends, and whether the exemption flows through to those dividends is a matter of state law. SGOV's prospectus is careful about this: "Certain states and localities may exempt from tax distributions attributable to interest from U.S. federal government obligations." Since both funds hold only Treasuries, the issue is the same for both. Check your state's rule and the percentage of income each fund reports as coming from US government obligations for the tax year, which the issuers publish after year-end. Both funds' dividends remain fully taxable at the federal level as ordinary income.
In a high-tax state, this is the main reason to hold either fund instead of a government money market fund that holds repurchase agreements or agency debt alongside Treasuries. We compare that directly in SGOV vs SPAXX.
Which One Fits Your Cash?
- You want the cheapest, plainest T-bill fund: SGOV. At 0.09% it costs 6 basis points less than USFR, and you can read its holdings as a list of bills maturing within weeks.
- You want a coupon that tracks the weekly bill auction: USFR. Its notes reset off the 13-week bill, and it has returned slightly more than SGOV in each full year from 2022 to 2024.
- You keep cash in a taxable account in a high-income-tax state: either, ahead of most money market funds, subject to your state's rule on fund dividends. The two are equal on this point.
- You need the money on a fixed date: neither is ideal. Both trade at a market price and settle like a stock. A bill bought to mature on that date, or a CD, fits better.
- You want the cash to sweep automatically at your broker: neither can do that. A money market fund sweep is the tool. See the money market funds hub.
- You are thinking of holding both: there is little point. They do the same job, and owning both only averages their fees.
You can also buy bills and FRNs directly from the Treasury instead of through a fund. Our guide to Treasury bills, notes and bonds covers that route. For inflation protection on money you can lock away for a year or more, see I bonds.
Sources & Methodology
Every figure on this page was read from the primary source named below. Fees come from each fund's own summary prospectus, which covers only that fund. Yields, durations and asset totals come from the issuers' own product pages, and each carries the issuer's as-of date. No figure came from a data aggregator or another comparison site.
- iShares 0-3 Month Treasury Bond ETF (SGOV), Summary Prospectus dated 29 June 2026 (Form 497K, iShares Trust, SEC EDGAR): the 0.09% fee, cost example, index rules, 39 index issues as of 28 February 2026, calendar-year returns, best and worst quarter, and the state-tax sentence.
- WisdomTree Floating Rate Treasury Fund (USFR), Summary Prospectus dated 1 January 2026, as supplemented 30 September 2026 (Form 497K, WisdomTree Trust, SEC EDGAR): the 0.15% fee, cost example, index description, FRN reset language, cash redemption risk, calendar-year returns, and best and worst quarter.
- iShares SGOV product page and SGOV fact sheet as of 30 June 2026: SEC yield, duration, maturity, net assets, bid/ask spread, distribution frequency, and returns to 30 June 2026.
- WisdomTree USFR product page: SEC yield, duration, average maturity, total assets, current holdings, recent distributions, and returns to 30 June 2026.
- SEC Form N-PORT for both funds, period ended 31 May 2026: holdings and maturities used for the overlap calculation.
- TreasuryDirect, Floating Rate Notes: two-year term, quarterly interest, index rate and spread, state tax line.
- 31 U.S.C. § 3124 and IRS Publication 550 (for 2025 returns): the state and local tax exemption for Treasury interest.
What we could not verify: we give no percentage of either fund's 2025 income that came from US government obligations, because we did not pull the issuers' tax-year documents, and we do not describe any state's pass-through rule. USFR's prospectus does not yet show a 2025 calendar return, so the calendar table stops at 2024.
This article is for general education only and is not investment, tax or legal advice. Both funds can lose money, trade at prices that differ from their net asset value, and pay less when short-term rates fall. Yields and portfolio statistics on this page change daily. All figures were checked on 5 October 2026. Confirm current figures with iShares and WisdomTree before acting, and consider a licensed professional for advice on your situation.
FAQ: SGOV vs USFR
Is SGOV or USFR better?
SGOV is cheaper at 0.09% against 0.15%. USFR has returned slightly more, 4.01% against 3.90% over the year to 30 June 2026, and more in each full year from 2022 to 2024. Both are Treasury-only cash substitutes with durations near zero. Pick SGOV for cost and simplicity, USFR if you prefer a coupon tied to the weekly 13-week bill auction plus a fixed spread.
Do SGOV and USFR overlap?
No. On their 31 May 2026 N-PORT filings they shared zero securities. SGOV holds bills maturing within three months; USFR holds two-year floating-rate notes. Both have the same issuer, the US Treasury.
Can USFR lose money?
Yes, but it rarely has. Its worst calendar quarter in the prospectus chart was -0.08%, in the third quarter of 2015. The prospectus warns that FRN values "will decline if their index rates do not rise as much, or as quickly, as interest rates in general."
How often does USFR's rate reset?
Every week. TreasuryDirect says the index rate "is tied to the highest accepted discount rate of the most recent 13-week Treasury bill" and "is reset every week." The spread over that rate is fixed for the note's life.
Are SGOV and USFR exempt from state tax?
Interest on Treasuries is exempt from state and local income tax under 31 U.S.C. § 3124. Whether a fund's dividends keep that exemption depends on your state. SGOV's prospectus says "certain states and localities may exempt" such distributions. Federal tax applies in full.
What yield do SGOV and USFR pay?
SGOV's 30-day SEC yield was 3.70% on 1 October 2026. USFR's was 3.81% on 29 September 2026. Both move with short-term rates and will change.
Is SGOV or USFR better than a money market fund?
They can be cheaper and more state-tax-efficient, but they are ETFs: you place trades, the price floats, and neither can be an automatic sweep. A money market fund is easier for cash you move often.
Cite This Page
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"SGOV vs USFR: Cheaper T-Bills or Floating-Rate Treasuries?" Wealthy Pot, 2026. https://wealthypot.com/sgov-vs-usfr/
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