⚖️ VGSH vs SGOV Comparison · Free & No Signup

VGSH vs SGOV: 1-3 Year Treasuries vs T-Bills — Not the Same Fund

Both hold U.S. Treasuries. Both are safe. But VGSH has roughly 2 years of interest rate duration — if rates rise 1%, it loses about 2% in price. SGOV's duration is about 0.1 years. For cash parking, the difference is not subtle.

💰 VGSH is cheaper 🔬 Compare top 10 holdings → 💡 Plain-English verdict

🤝 BFF Take

SGOV for Cash Parking. VGSH for Short-Duration Bond Exposure.

VGSH (Vanguard Short-Term Treasury ETF) and SGOV (iShares 0-3 Month Treasury Bond ETF) both hold U.S. Treasury securities, but they serve meaningfully different purposes. VGSH holds Treasuries with 1-3 year maturities, giving it roughly 2 years of duration — enough interest rate sensitivity to lose 2% in price if rates rise 1 percentage point. It charges 0.04% and yields approximately 4.0-4.5% depending on the rate environment. SGOV holds only 0-3 month Treasury bills — the shortest possible Treasury maturities. Its duration is about 0.1 years, meaning rate changes have almost no effect on principal. It charges 0.09% and yields slightly more than VGSH in inverted yield curve environments (like 2022-2024), or slightly less in normal environments. For investors who want somewhere to park cash with zero duration risk and T-bill yields, SGOV is the right tool. For investors who want genuine short-term Treasury bond exposure and are comfortable with modest duration risk, VGSH is appropriate. They are not interchangeable.

📋 Quick Takeaways

⏱️VGSH has ~2 years of duration. SGOV has ~0.1 years. A 1% rate rise would cost VGSH about 2% in price; it would barely affect SGOV.

💰VGSH charges 0.04%, SGOV charges 0.09%. VGSH is cheaper, but for cash equivalents, SGOV's near-zero duration is more important than 5 basis points.

🏦SGOV interest is exempt from state and local income tax. VGSH interest also qualifies for state tax exemption — both beat money market funds on this dimension.

📊 Data-Based Take: SGOV has the lower fee

Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.

✓ Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice

VGSH

Vanguard Short-Term Treasury ETF

Expense Ratio

0.04% ✓

1-Year Return

+5.2%

AUM

$12B

Holdings

100

SGOV

iShares 0-3 Month Treasury Bond ETF

Expense Ratio

0.09%

1-Year Return

+5.3%

AUM

$32B

Holdings

📋 VGSH vs SGOV — Key Facts Side by Side

Metric	VGSH	SGOV
Fund Name	Vanguard Short-Term Treasury ETF	iShares 0-3 Month Treasury Bond ETF
Issuer	Vanguard	iShares
Tracks Index	Bloomberg U.S. 1-3 Year Treasury Index	ICE 0-3 Month US Treasury Securities Index
Expense Ratio	0.04% ✓	0.09%
Cost per $10K/yr	$4.00	$9.00
AUM	$12B	$32B
Holdings	100	20
Inception	2009	2020
1-Year Return	+5.20%	+5.30%
3-Year Return	+2.80%	+3.60%
5-Year Return	+1.90%	—
Avg Bid-Ask Spread	0.01%	0.01%

Data from ETF BFF database. Returns are annualised. Not investment advice.

📊 VGSH vs SGOV — Annualised Returns

Annualised returns (trailing, price-based). Past performance does not guarantee future results.

🎯 Should You Buy VGSH or SGOV?

Choose if...

VGSH

You want the lowest fees — saves ~$5/yr per $10K vs SGOV
You want broader diversification (100 holdings vs 20)

Choose if...

SGOV

You already use iShares and prefer staying within their fund family

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❓ VGSH vs SGOV — Frequently Asked Questions

Is VGSH or SGOV better for parking cash?

SGOV. For cash that you may need in the near future and do not want to expose to interest rate risk, SGOV's ~0.1-year duration means it behaves like cash — the value stays flat regardless of what rates do. VGSH's 2-year duration means it can lose 2% in price if rates rise 1%, which is not acceptable behavior for a cash parking vehicle. SGOV is a T-bill fund and is designed for cash equivalents. VGSH is a short-term bond fund designed for bond exposure with modest duration risk.

Are VGSH and SGOV state tax exempt?

Both funds pay interest from U.S. Treasury securities, which is exempt from state and local income tax in all 50 states. This makes both VGSH and SGOV more tax-efficient than money market funds (which often hold some state-taxable securities) or high-yield savings accounts in high-income-tax states. For investors in states like California, New York, or New Jersey with top marginal rates above 10%, the state tax exemption meaningfully increases the after-tax yield.

What is duration and why does it matter?

Duration measures how sensitive a bond fund is to interest rate changes. A fund with 2-year duration (like VGSH) loses approximately 2% in price for every 1% rise in interest rates — and gains about 2% for every 1% fall. A fund with 0.1-year duration (like SGOV) barely moves when rates change. In 2022, when the Fed raised rates by 4.25%, VGSH lost about 5-8% in total return including coupon payments. SGOV, launched in 2020, was largely unaffected by the same rate moves. Duration is the primary difference between these two funds.

When would I choose VGSH over SGOV?

VGSH makes sense when you want to hold short-term Treasury bonds as part of a bond allocation — not as a cash substitute. It is appropriate in a normal or steepening yield curve where 1-3 year Treasuries yield meaningfully more than T-bills. It is also appropriate for investors who are deliberately extending duration to lock in yields for 1-2 years, anticipating that rates will fall. SGOV is the right choice when you want a cash equivalent with T-bill yields and no duration risk.

How does VGSH compare to BND or AGG?

VGSH (2-year duration, Treasuries only) is far more conservative than BND or AGG, which hold bonds across the full maturity spectrum (1-30 years) with durations around 6 years. BND and AGG include corporate bonds and mortgage-backed securities; VGSH holds only U.S. Treasuries. In 2022, BND fell roughly 13%; VGSH fell about 4-5%. VGSH sits between SGOV (near-zero duration, cash equivalent) and BND/AGG (intermediate-term bond fund) on the risk spectrum.

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📄 VGSH & SGOV Fact Sheets

VGSH Fact Sheet→ SGOV Fact Sheet→

ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.