Short-Treasury ETFs offer 3.8% yield, but tax treatment differs significantly between SGOV and BOXX funds.

Investors seeking short-term Treasury yields can choose between ETFs like SGOV, which pays monthly taxable interest at about 3.83%, and BOXX, which delivers similar returns through options price appreciation, deferring taxes until sale. SGOV's interest income is taxed federally each month, reducing after-tax yield for high earners, while BOXX's structure allows tax deferral and potential long-term capital gains treatment. BOXX carries more complexity and counterparty risk but may offer 50-100 basis points higher after-tax yield for taxable accounts in high tax brackets. For tax-advantaged accounts, SGOV's lower fees and government backing make it preferable. Investors can split holdings to balance liquidity and tax efficiency.