Income from iShares 0-3 Month Treasury Bond ETF drops 1/3 as rates fall, fees eat larger share of returns.

Investors in the iShares 0-3 Month Treasury Bond ETF (SGOV) saw their monthly income fall by about one-third from $1,127 in August 2024 to $763 in August 2026 due to declining short-term interest rates. While the share price remained stable, the fixed 0.09% expense ratio now consumes a larger portion of the reduced income, increasing the effective cost of holding the fund. Additionally, the ETF's distributions are taxable at the federal level, and state tax exemptions may be diluted compared to holding Treasury bills directly. Investors can avoid these fees by buying Treasury bills themselves, though this requires managing rollovers and lacks intraday liquidity. The key question is whether the convenience fee still justifies the cost at lower yields.