In the year-to-date period, SPAXX achieves a 0.86% return, which is significantly lower than SGOV's 3.77% return. The chart below displays the growth of a $10,000 investment in both assets, with all prices adjusted for splits and dividends.
SPAXX
SGOV
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SPAXX vs. SGOV - Risk-Adjusted Performance Comparison
This table presents a comparison of risk-adjusted performance metrics for Fidelity Government Money Market Fund (SPAXX) and iShares 0-3 Month Treasury Bond ETF (SGOV). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
The current SPAXX Sharpe Ratio is 2.71, which is lower than the SGOV Sharpe Ratio of 22.65. The chart below compares the 12-month rolling Sharpe Ratio of SPAXX and SGOV.
SPAXX
SGOV
Dividends
SPAXX vs. SGOV - Dividend Comparison
SPAXX's dividend yield for the trailing twelve months is around 4.99%, less than SGOV's 5.23% yield.
The maximum SPAXX drawdown since its inception was 0.00%, smaller than the maximum SGOV drawdown of -0.03%. Use the drawdown chart below to compare losses from any high point for SPAXX and SGOV. For additional features, visit the drawdowns tool.
SPAXX
SGOV
Volatility
SPAXX vs. SGOV - Volatility Comparison
The current volatility for Fidelity Government Money Market Fund (SPAXX) is 0.00%, while iShares 0-3 Month Treasury Bond ETF (SGOV) has a volatility of 0.07%. This indicates that SPAXX experiences smaller price fluctuations and is considered to be less risky than SGOV based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
Both ETFs have the same top 3 sector exposures: and Cash and/or Derivatives. SGOV is less expensive with a Total Expense Ratio (TER) of 0.09%, versus 0.1356% for BIL. SGOV is up 2.9% year-to-date (YTD) with +$6.30B in YTD flows. BIL performs worse with 2.85% YTD performance, and -$255M in YTD flows.
A decline in the credit quality of an issuer or a provider of credit support or a maturity-shortening structure for a security can cause the price of a money market security to decrease. Fidelity's government and U.S. Treasury money market funds will not impose a fee upon the sale of your shares.
The fund is composed of both fixed- and floating-rate securities. Because SPAXX invests in low-risk government debt, it's a highly liquid and relatively safe investment, although money market funds lack Federal Deposit Insurance Corp. (FDIC) guarantees.
So is SGOV a good investment? Sure, if you want T-bills and don't want to bother with buying and rolling a ladder of individual bonds yourself. SGOV is clearly a great low-cost index fund for T-bills, evidenced by its huge AUM and massive inflows in 2023, and it's one of the cheapest in its space.
iShares 0-3 Month Treasury Bond ETF (SGOV) and US Treasury 3 Month Bill ETF (TBIL) belong to the same industry segment: Money Market Bonds. Both ETFs have the same top 3 sector exposures: and Cash and/or Derivatives.
A benefit of the core position is that it allows you to earn interest on uninvested cash balances. Interest is calculated on a daily basis and is credited on the last business day of the month.
Money market funds are mutual funds that hold highly liquid investment products from cash and cash equivalent securities to short-term U.S. government securities. SPAXX specifically holds U.S. government securities and repurchase agreements. They are seen as very low risk but are not guaranteed by the US Treasury.
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