How SGOV Works

How SGOV Works

This is a low-risk exchange-traded fund that invests in U.S. Treasury securities with maturities of three months or less. It is designed for cash management and portfolio stability, acting as a high-quality, liquid alternative to bank deposits, offering greater liquidity and potential yields than traditional checking accounts but with minimal risk of principal loss. SGOV aims to provide exposure to short-term government debt and delivers monthly distributions while being exempt from state and local taxes. 

Key Characteristics:

Investment Objective:  To track an index of U.S. Treasury bonds with remaining maturities of three months or less.
Low Risk:  Due to its focus on short-term government bonds, it has virtually no credit risk and very low volatility, making it a stable holding.
High Liquidity:  As an ETF, it can be traded on the stock market daily, providing easy access to funds, similar to cash.
Cash Alternative: It serves as an effective cash management tool for parking funds, offering potentially higher yields than bank accounts without the typical volatility of other investments.
Distributions: SGOV pays monthly distributions to its investors.