# SHY alternatives: 8 similar ETFs compared

> ETFs similar to SHY, closest first, with each fund's fee, what it tracks, and returns and worst drops on the same dates as SHY. Updated daily.

The ETFs most like SHY are VGSH, VGIT and IEF. VGSH holds US government bonds that pay back in 1 to 3 years, like SHY. VGSH costs less: 0.03% a year against 0.15%.

Written by [the Tactfolio research team](https://tactfolio.com/about/editorial-policy). Fund facts checked October 17, 2026. Prices through October 16, 2026.

## Key points

- 8 funds can stand in for SHY: 1 of the same kind and 7 related funds.
- SHY charges 0.15% a year (about $15 on $10,000). The cheapest alternative here, VGSH, charges 0.03%.
- VGSH moved most like SHY: a daily correlation of 0.98 over about the last five years.
- Returns and drops for each pair use the same dates for both funds.

## SHY alternatives at a glance

Each fund below can stand in for SHY, closest first. "Same kind" funds hold the same kind of bonds through a different index. "Related" funds make a different bet that often moves the same way.

| ETF | How close | Yearly fee | Fee on $10,000 | Tracks |
| --- | --- | --- | --- | --- |
| **SHY** | This fund | 0.15% | $15 | ICE U.S. Treasury 1-3 Year Bond Index |
| [VGSH](https://tactfolio.com/etf/vgsh.md) | Same kind of fund | 0.03% | $3 | Bloomberg US Treasury 1-3 Year Bond Index |
| [VGIT](https://tactfolio.com/etf/vgit.md) | Related fund | 0.03% | $3 | Bloomberg US Treasury 3-10 Year Bond Index |
| [IEF](https://tactfolio.com/etf/ief.md) | Related fund | 0.15% | $15 | ICE US Treasury 7-10 Year Bond Index |
| [SHV](https://tactfolio.com/etf/shv.md) | Related fund | 0.15% | $15 | ICE Short US Treasury Securities Index |
| [BIL](https://tactfolio.com/etf/bil.md) | Related fund | 0.1353% | $13.53 | Bloomberg 1-3 Month U.S. Treasury Bill Index |
| [SGOV](https://tactfolio.com/etf/sgov.md) | Related fund | 0.09% | $9 | ICE 0-3 Month US Treasury Securities Index |
| [TFLO](https://tactfolio.com/etf/tflo.md) | Related fund | 0.15% | $15 | Bloomberg U.S. Treasury Floating Rate Index |
| [USFR](https://tactfolio.com/etf/usfr.md) | Related fund | 0.15% | $15 | Bloomberg U.S. Treasury Floating Rate Bond Index |

Fees come from each fund company, checked on the dates shown on each fund's page.

## How SHY and its alternatives did over the same dates

Each row measures the alternative and SHY on the days both traded, so neither gets a head start. Correlation shows how closely their daily moves matched over about the last five years. A value of 1 means they always moved together.

| ETF | Moves with SHY | Per year | SHY per year | Worst drop | SHY worst drop | Since |
| --- | --- | --- | --- | --- | --- | --- |
| [VGSH](https://tactfolio.com/etf/vgsh.md) | 0.98 | 1.4% | 1.3% | −5.7% | −5.7% | November 2009 |
| [VGIT](https://tactfolio.com/etf/vgit.md) | 0.91 | 2.0% | 1.3% | −16.1% | −5.7% | November 2009 |
| [IEF](https://tactfolio.com/etf/ief.md) | 0.85 | 3.4% | 2.0% | −23.9% | −5.7% | July 2002 |
| [SHV](https://tactfolio.com/etf/shv.md) | 0.53 | 1.6% | 1.9% | −0.4% | −5.7% | January 2007 |
| [BIL](https://tactfolio.com/etf/bil.md) | 0.14 | 1.4% | 1.8% | −0.8% | −5.7% | May 2007 |
| [SGOV](https://tactfolio.com/etf/sgov.md) | 0.12 | 3.0% | 1.4% | 0.0% | −5.7% | June 2020 |
| [TFLO](https://tactfolio.com/etf/tflo.md) | 0.05 | 2.0% | 1.5% | −5.0% | −5.7% | February 2014 |
| [USFR](https://tactfolio.com/etf/usfr.md) | 0.03 | 2.0% | 1.5% | −2.2% | −5.7% | February 2014 |

Prices through October 16, 2026. Figures use daily closing prices adjusted for splits, with dividends reinvested. They do not include taxes or the cost of buying and selling. Past results do not tell you what will happen next.

## Each SHY alternative, compared

### VGSH: Vanguard Short-Term Treasury ETF

VGSH also holds US government bonds that pay back in 1 to 3 years. It tracks the Bloomberg US Treasury 1-3 Year Bond Index, while SHY tracks the ICE U.S. Treasury 1-3 Year Bond Index.

It charges 0.03% a year, about $3 on $10,000, against $15 for SHY. It held 92 holdings, against 90 for SHY.

From November 2009 to October 2026, VGSH returned about 1.4% a year and SHY returned about 1.3% a year. Over about the last five years they moved almost exactly together (correlation 0.98).

Read the [VGSH fund page](https://tactfolio.com/etf/vgsh.md) for its returns by year and worst drop.

### VGIT: Vanguard Intermediate-Term Treasury ETF

VGIT is a looser match. It holds US government bonds that pay back in about 3 to 10 years, while SHY holds US government bonds that pay back in 1 to 3 years.

It charges 0.03% a year, about $3 on $10,000, against $15 for SHY. It held 102 holdings, against 90 for SHY.

From November 2009 to October 2026, VGIT returned about 2.0% a year and SHY returned about 1.3% a year. Over about the last five years they moved together on most days (correlation 0.91).

Read the [VGIT fund page](https://tactfolio.com/etf/vgit.md) for its returns by year and worst drop.

### IEF: iShares 7-10 Year Treasury Bond ETF

IEF is a looser match. It holds US government bonds that pay back in about 3 to 10 years, while SHY holds US government bonds that pay back in 1 to 3 years.

It charges 0.15% a year, about $15 on $10,000, against $15 for SHY. It held 17 holdings, against 90 for SHY.

From July 2002 to October 2026, IEF returned about 3.4% a year and SHY returned about 2.0% a year. Over about the last five years they moved together on most days (correlation 0.85).

Read the [IEF fund page](https://tactfolio.com/etf/ief.md) for its returns by year and worst drop.

### SHV: iShares 0-1 Year Treasury Bond ETF

SHV is a looser match. It holds US government bills and notes that pay back within months, so the price barely moves, while SHY holds US government bonds that pay back in 1 to 3 years.

It charges 0.15% a year, about $15 on $10,000, against $15 for SHY. It held 19 holdings, against 90 for SHY.

From January 2007 to October 2026, SHV returned about 1.6% a year and SHY returned about 1.9% a year. Over about the last five years they often moved in different ways (correlation 0.53).

Read the [SHV fund page](https://tactfolio.com/etf/shv.md) for its returns by year and worst drop.

### BIL: State Street SPDR Bloomberg 1-3 Month T-Bill ETF

BIL is a looser match. It holds US government bills and notes that pay back within months, so the price barely moves, while SHY holds US government bonds that pay back in 1 to 3 years.

It charges 0.1353% a year, about $13.53 on $10,000, against $15 for SHY. It held 34 holdings, against 90 for SHY.

From May 2007 to October 2026, BIL returned about 1.4% a year and SHY returned about 1.8% a year. Over about the last five years they often moved in different ways (correlation 0.14).

Read the [BIL fund page](https://tactfolio.com/etf/bil.md) for its returns by year and worst drop.

### SGOV: iShares 0-3 Month Treasury Bond ETF

SGOV is a looser match. It holds US government bills and notes that pay back within months, so the price barely moves, while SHY holds US government bonds that pay back in 1 to 3 years.

It charges 0.09% a year, about $9 on $10,000, against $15 for SHY.

From June 2020 to October 2026, SGOV returned about 3.0% a year and SHY returned about 1.4% a year. Over about the last five years they often moved in different ways (correlation 0.12).

Read the [SGOV fund page](https://tactfolio.com/etf/sgov.md) for its returns by year and worst drop.

### TFLO: iShares Treasury Floating Rate Bond ETF

TFLO is a looser match. It holds US government bills and notes that pay back within months, so the price barely moves, while SHY holds US government bonds that pay back in 1 to 3 years.

It charges 0.15% a year, about $15 on $10,000, against $15 for SHY. It held 8 holdings, against 90 for SHY.

From February 2014 to October 2026, TFLO returned about 2.0% a year and SHY returned about 1.5% a year. Over about the last five years they often moved in different ways (correlation 0.05).

Read the [TFLO fund page](https://tactfolio.com/etf/tflo.md) for its returns by year and worst drop.

### USFR: WisdomTree Floating Rate Treasury Fund

USFR is a looser match. It holds US government bills and notes that pay back within months, so the price barely moves, while SHY holds US government bonds that pay back in 1 to 3 years.

It charges 0.15% a year, about $15 on $10,000, against $15 for SHY. It held 5 holdings, against 90 for SHY.

From February 2014 to October 2026, USFR returned about 2.0% a year and SHY returned about 1.5% a year. Over about the last five years they often moved in different ways (correlation 0.03).

Read the [USFR fund page](https://tactfolio.com/etf/usfr.md) for its returns by year and worst drop.

## SHY versions from other fund companies

Some people keep all their funds with one company. Here is the closest fund to SHY from each other company on this page:

- **Vanguard:** [VGSH](https://tactfolio.com/etf/vgsh.md), Vanguard Short-Term Treasury ETF (same kind of fund, 0.03% a year)
- **SPDR (State Street):** [BIL](https://tactfolio.com/etf/bil.md), State Street SPDR Bloomberg 1-3 Month T-Bill ETF (related fund, 0.1353% a year)
- **WisdomTree:** [USFR](https://tactfolio.com/etf/usfr.md), WisdomTree Floating Rate Treasury Fund (related fund, 0.15% a year)

Most brokers let you buy any ETF, whoever runs it. Mutual fund versions, such as a fund company's index mutual fund, are not listed here.

## How to choose between SHY and its alternatives

- **What it tracks.** A fund on the same index holds the same bonds. A different index can mean different weights, more or fewer holdings, or a different mix.
- **The fee.** The difference is often small. On $10,000, SHY costs about $15 a year. VGSH costs about $3.
- **History.** An older fund has been through more bad markets, so you can see how far it fell.
- **What you already own.** Two funds that move together add little variety. A fund with a low correlation behaves more on its own.

## Swapping SHY to harvest a tax loss

Some investors sell a fund at a loss to lower their taxes, then buy a similar fund so they stay invested. This is called tax-loss harvesting.

The IRS wash sale rule blocks the loss if you buy a "substantially identical" security within 30 days before or after the sale. The IRS has not said exactly when two funds count. Funds on the same index are more likely to. Funds on a different index, such as VGSH, VGIT or IEF, are less likely to.

Ask a tax professional before you rely on this. Read the IRS rules in [Publication 550](https://www.irs.gov/publications/p550).

## Test SHY and its alternatives in a backtest

Tactfolio is a platform where you build rules-based investing strategies, backtest them on decades of real prices, share them, and run them automatically in your own Alpaca account. Open the [builder](https://tactfolio.com/builder), add SHY and VGSH, and see how each would have done on the same dates, or how a mix of both would have done.

## The details

Alternatives are picked from facts, not from returns. First come funds that track the same index as SHY. Then come funds that hold the same kind of bonds through another index. Last come funds from a close category that make a different bet. Leveraged funds are only listed as alternatives to other leveraged funds.

Within each group, the funds whose daily returns moved most like SHY over about the last five years come first. Returns and worst drops use Tactfolio's stored daily prices, adjusted for splits, with dividends reinvested. Each alternative is measured with SHY only on days both traded. Read [what a backtest simulates](https://tactfolio.com/docs/backtests.md) for more on these measures.

## Research and test it

- [Portfolio rebalancing](https://tactfolio.com/learn/portfolio-rebalancing): What portfolio rebalancing is, why a 60/40 mix drifts, calendar vs threshold methods, and how taxes and costs fit in.
- [Risk parity](https://tactfolio.com/learn/risk-parity): Risk parity balances risk instead of dollars. See a simple stock and bond example, why funds use leverage, and what went wrong in 2022.
- [ETF screener](https://tactfolio.com/screener.md): A free ETF screener for 162 US-listed funds. Filter by type, issuer and fee, sort by returns or worst drop, and compare funds side by side.
- [ETF expense ratio](https://tactfolio.com/learn/etf-expense-ratio): What an ETF expense ratio is, how the fund charges it, and how 0.03% vs 1% adds up over 10 and 30 years, with real fund examples.
- [Backtest a portfolio](https://tactfolio.com/trading-tools/backtest-portfolio): Backtest a portfolio of US stocks and ETFs. Enter tickers and shares, pick when to rebalance, and get the results with a link to share.
- [Backtesting](https://tactfolio.com/backtesting): Free backtesting software for stocks, ETFs, and crypto perps.

## Common questions

### What ETF is most similar to SHY?

VGSH is the closest. VGSH also holds US government bonds that pay back in 1 to 3 years. It tracks the Bloomberg US Treasury 1-3 Year Bond Index, while SHY tracks the ICE U.S. Treasury 1-3 Year Bond Index. Over about the last five years they moved almost exactly together.

### Is there a cheaper alternative to SHY?

Yes. VGSH charges 0.03% a year, VGIT charges 0.03% a year and SGOV charges 0.09% a year, against 0.15% for SHY. On $10,000 that is about $3 a year instead of $15.

### Is SHY or VGSH better?

Neither is better for everyone. From November 2009 to October 2026, SHY returned about 1.3% a year and VGSH returned about 1.4% a year. SHY charges 0.15% a year and VGSH charges 0.03%. Past returns do not tell you what comes next.

### What if I had put $10,000 in SHY 10 years ago?

It would have grown to about $11,813 by October 16, 2026, with dividends reinvested. That is about 1.7% a year. Past returns do not tell you what comes next.

## Sources

- [iShares (BlackRock): iShares 1-3 Year Treasury Bond ETF fund page](https://www.ishares.com/us/products/239452/ishares-1-3-year-treasury-bond-etf)
- [Vanguard: Vanguard Short-Term Treasury ETF fund page](https://investor.vanguard.com/investment-products/etfs/profile/vgsh)
- [Vanguard: Vanguard Intermediate-Term Treasury ETF fund page](https://investor.vanguard.com/investment-products/etfs/profile/vgit)
- [iShares (BlackRock): iShares 7-10 Year Treasury Bond ETF fund page](https://www.ishares.com/us/products/239456/ishares-7-10-year-treasury-bond-etf)
- [iShares (BlackRock): iShares 0-1 Year Treasury Bond ETF fund page](https://www.ishares.com/us/products/239466/ishares-01-year-treasury-bond-etf)
- [SPDR (State Street): State Street SPDR Bloomberg 1-3 Month T-Bill ETF fund page](https://www.ssga.com/us/en/intermediary/etfs/state-street-spdr-bloomberg-1-3-month-t-bill-etf-bil)
- [iShares (BlackRock): iShares 0-3 Month Treasury Bond ETF fund page](https://www.ishares.com/us/products/314116/ishares-0-3-month-treasury-bond-etf)
- [iShares (BlackRock): iShares Treasury Floating Rate Bond ETF fund page](https://www.ishares.com/us/products/260652/ishares-treasury-floating-rate-bond-etf)
- [WisdomTree: WisdomTree Floating Rate Treasury Fund fund page](https://www.sec.gov/Archives/edgar/data/1350487/000121465926012371/usfr926497k.htm)
- [IRS Publication 550: wash sales](https://www.irs.gov/publications/p550)

> Not financial advice. Tactfolio is a research and automation tool. It is not a broker or a financial adviser. This page is for education only. Backtests are hypothetical. They show how rules would have done on past prices, not how they will do. All investing involves risk, including losing the money you put in.