What is SGOV and how does it work?

SGOV key facts

How SGOV works, step by step

1. You buy shares on the stock exchange through any brokerage account, at a price near $100.
2. The fund buys Treasury bills. These are short-term loans to the US government sold at a discount; for example, paying about $99 for a bill that repays $100 in three months.
3. Interest accrues daily as each bill moves toward its $100 maturity value. You see this as SGOV’s price creeping up during the month.
4. Bills mature and are replaced. Because everything matures within about three months, the fund is constantly buying new bills at whatever rates the Treasury is paying, so its yield follows the market quickly.
5. Income is paid monthly. At the start of each month SGOV distributes the interest earned, minus its 0.09% fee, and its price drops by about the amount paid. The latest distribution was $0.3005 per share.

What SGOV earns

SGOV’s income is whatever three-month-and-shorter Treasury bills yield, less expenses. Its current 30-day SEC yield is 3.76% (as of Oct 22, 2026). That changes as the Federal Reserve changes interest rates: SGOV paid only a few cents per share for all of 2021, when rates were near zero, and more than $5 per share in 2024. See the dividend history.

Why investors use SGOV

• Cash in a brokerage account that earns a Treasury rate rather than a low sweep rate.
• State tax efficiency: most of the income comes from Treasury bills, which are generally exempt from state income tax. See Is SGOV tax exempt?
• Low volatility: the price has historically moved within a band of well under 1% over a year.
• Monthly income without having to buy and roll individual Treasury bills.

Limitations

• Not FDIC insured, and not guaranteed to hold its value.
• Income falls when short-term rates fall, with very little lag.
• No meaningful long-term growth: after inflation, returns on T-bills have historically been modest.
• Distributions are taxed as ordinary income at the federal level.