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If US Treasuries at yielding 4-5% right now, why can't I find a 1 month US Bond ETF or 6 month US Bond ETF that yields 4-5%? The best I can find is SGOV but it only yields 2%.

Picture of US yields on 3/8/2023 for reference: enter image description here

Chris W. Rea
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Katsu
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    Hello and welcome to the site. Please consider not using code formatting for non-code highlights. There are plenty of other options to give a term emphasis here https://stackoverflow.com/editing-help – Mindwin Remember Monica Mar 09 '23 at 16:50
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    @MindwinRememberMonica - your feedback seems counter-intuitive on formatting rules. Why limit formating to code only? – Haroon Mar 09 '23 at 17:55
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    @Haroon The code formatting in Stack Exchange uses <code> HTML tags, meaning that if you're using a screen reader or other accessibility software, it's going to treat things formatted in that way as code, not formatted text. It's an accessibility issue to use them as generic formatting. – Chris Hayes Mar 10 '23 at 00:07
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    @MindwinRememberMonica, ChrisHayes: A ticker symbol is "code". It is machine-readable and the exact spelling matters. You'd actually want a screen reader to treat it in the same way as identifiers (variable names, function names) in computer code. – Ben Voigt Mar 10 '23 at 15:26

3 Answers3

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Over the last 12 months, SGOV yielded 1.84%, but the current SEC yield (30 days ending on the last day of last month) is 4.41%. If you want to know what a fund or ETF yielded most recently, look at the SEC yield.

SGOV Morningstar Quote 3/8/2023

Stan H
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The average yield to maturity of SGOV is 4.41%. The 2% is the 12-month trailing yield. From https://www.ishares.com/us/products/314116/ishares-0-3-month-treasury-bond-etf:

enter image description here

Note that the average yield to maturity of SGOV is a bit lower than newly issued Treasury bills, as the yield to maturity has been increasing steadily over the past 1 year. From https://ycharts.com/indicators/3_month_t_bill:

enter image description here

Franck Dernoncourt
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  • Do you have a recommendation for an ETF that is more closely tied to the actual 3 month yield than SGOV? – Katsu Mar 09 '23 at 18:43
  • This might be its own question, but the way these ETFs work, would you expect the minimal return to be at least the the minimum yield of 0-3 month treasuries during the previous 12 week period? Since theoretically every treasury has rolled over at that point? – Chuu Mar 10 '23 at 16:00
  • I think you'd just look at the ETF's avg effective duration and look at the yield based on that. Open to being corrected on that. – Katsu Mar 10 '23 at 18:08
  • @Katsu blend SGOV and SHV – xiaomy Mar 10 '23 at 19:32
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If you're trying to immediately capitalize on higher rates, your best bet might actually be a money-market mutual fund in the current environment. These funds have access to the Fed's Overnight Reverse Repo ("ONRRP") facility for parking their excess cash, and as of the most recent rate hike, the ONRRP facility is paying 5.30%.

user68318
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