What do Microsoft Corp. (ticker: MSFT) and Johnson & Johnson (JNJ) have in common? Beyond both being major constituents in the S&P 500 index, both blue-chip stocks are also among the very few publicly traded U.S. companies that still possess a coveted AAA credit rating.
An AAA rating represents the highest level of institutional creditworthiness. It implies an extremely low probability of default and signals that investors view the borrower as exceptionally capable of meeting its debt obligations, even during economic stress.
What some investors may not realize is that both companies technically hold higher credit ratings than the U.S. government itself. That distinction emerged after a series of sovereign downgrades across all three major credit rating agencies over the past decade.
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The first came in August 2011, when S&P Global downgraded U.S. sovereign debt from AAA to AA+. At the time, S&P cited concerns over the country’s fiscal consolidation plan, growing political polarization and doubts that Washington would adequately address the long-term debt trajectory.
More than a decade later, many of those concerns remained unresolved. In August 2023, Fitch Ratings also downgraded U.S. sovereign debt, again citing deteriorating governance standards and repeated debt ceiling standoffs. Then, in May 2025, Moody’s followed suit, pointing toward forecasts for persistently larger deficits and ongoing political deadlock surrounding government spending.
Despite these downgrades, investors still broadly view Treasurys as among the safest assets available globally. That perception is especially strong for Treasury bills, which carry minimal interest-rate risk and are frequently used as liquid alternatives to certificate of deposit ladders or cash savings vehicles.
“Equities are more sensitive to rising growth trends, while nominal Treasurys have a more positive response to falling growth,” says Matthew Bartolini, managing director and global head of research strategists at State Street Investment Management. “Based on their biases toward growth and inflation dynamics, Treasurys can offer long-term diversification benefits for equity allocations.”
The durability of this reputation has helped fuel enormous demand for Treasury exchange-traded funds, or ETFs. Treasury ETFs allow investors to access U.S. government bonds through a brokerage-traded vehicle that functions much like a stock with a bid and ask.
“Treasury ETFs allow investors to gain exposure through a stock-like instrument that trades on market exchanges,” says Tiana Patillo, financial advisor manager at Vanguard. “A Treasury ETF can provide greater liquidity, diversification and lower transaction costs.”
Treasury ETFs can also be attractive for investors living in high-tax states such as California or New York because interest is exempt from state and local income taxes, though still subject to federal taxation.
Here are seven of the best Treasury ETFs to buy now:
| ETF | Expense Ratio | 30-day SEC Yield |
| Vanguard Total Treasury ETF (VTG) | 0.03% | 4.3% |
| iShares U.S. Treasury Bond ETF (GOVT) | 0.05% | 4.3% |
| State Street SPDR Portfolio Treasury ETF (SPTB) | 0.03% | 4.3% |
| State Street SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) | 0.14% | 3.5% |
| Roundhill Weekly T-Bill ETF (WEEK) | 0.19% | 3.4% |
| BondBloxx Bloomberg One Year Target Duration US Treasury ETF (XONE) | 0.03% | 3.8% |
| BondBloxx Bloomberg Ten Year Target Duration US Treasury ETF (XTEN) | 0.08% | 4.5% |
Vanguard Total Treasury ETF (VTG)
Keeping expense ratios low is especially important for bond ETFs because fees come directly out of the quoted 30-day SEC yield. Investors allocating to Treasurys are already accepting lower yields relative to corporate bonds of similar maturities, so minimizing costs can improve long-term results. For low-cost Treasury exposure, few funds are cheaper than VTG, which charges just a 0.03% expense ratio.
VTG tracks the Bloomberg U.S. Treasury Total Return Unhedged USD Index, a benchmark spanning roughly 280 Treasury securities. The portfolio maintains an average duration of 5.7 years, implying moderate sensitivity to interest-rate changes. Rising rates can result in headwinds for VTG, while falling rates can be a tailwind. Currently, VTG pays a 4.3% 30-day SEC yield with monthly distributions.
iShares U.S. Treasury Bond ETF (GOVT)
VTG is a relatively new entrant to the Treasury ETF space. Vanguard launched the fund in July 2025 and assets under management, or AUM, currently sit at roughly $96 million. Investors preferring a more established option may instead consider GOVT, which launched much earlier in 2012 and has grown to over $41 billion in AUM, while trading an average of 7.7 million shares over a 30-day period.
GOVT tracks the ICE U.S. Treasury Core Bond Index and holds just over 210 Treasury securities with an effective duration of 5.6 years, giving it moderate interest rate sensitivity similar to VTG. While slightly more expensive than VTG at a 0.05% expense ratio, it still remains highly affordable relative to most fixed-income ETFs. GOVT also currently pays a 4.3% 30-day SEC yield with monthly distributions.
State Street SPDR Portfolio Treasury ETF (SPTB)
“At just three basis points, or 0.03% in fees, SPTB allows investors to access the Treasury market in a diversified and cost-efficient manner,” Bartolini says. SPTB’s portfolio offers Treasury exposure broadly similar to VTG and GOVT. The ETF passively tracks the Bloomberg U.S. Treasury Index and maintains an average duration of roughly 5.7 years while currently paying a 4.3% 30-day SEC yield.
There can be value in keeping multiple Treasury ETFs on a watch list, particularly during bond bear markets like 2022. If an investor is sitting on unrealized losses in one Treasury ETF, they may be able to sell it and immediately reinvest into another with comparable characteristics while avoiding a wash sale. That is because the ETF tracks different underlying indexes despite having similar portfolio exposures.
State Street SPDR Bloomberg 1-3 Month T-Bill ETF (BIL)
“The current change in the macro backdrop, where inflation is likely to be more stubborn than previously expected, has led the market to reprice forward-looking interest rate policy expectations,” Bartolini says. “At the start of the year, the markets were discounting at least two rate cuts, but now the market expects no rate cuts at all.” This dynamic has helped keep yields higher for ultra-short Treasury ETFs like BIL.
BIL tracks the Bloomberg 1-3 Month U.S. Treasury Bill Index. The ETF carries minimal interest rate sensitivity with an average duration of 0.1 year, and currently pays a 3.5% 30-day SEC yield in line with the prevailing federal funds rate. “BIL has witnessed $3.1 billion of inflows over the last three months as these macro dynamics have played out, pushing AUM to over $46 billion,” Bartolini says.
Roundhill Weekly T-Bill ETF (WEEK)
Treasury ETFs typically pay distributions on a monthly basis. By comparison, individual Treasury bonds generally pay interest semiannually, while Treasury bills do not make coupon payments at all. Instead, Treasury bills are purchased at a discount to face value and redeemed at par at maturity, with the difference representing the investor’s interest earned. This is why income investors often opt for ETFs.
One ETF that breaks from the usual monthly payout structure is WEEK, which, as its ticker suggests, distributes income on a weekly basis. WEEK uses an actively managed strategy where Roundhill assembles a Treasury ladder inside the ETF, targeting a relatively stable net asset value week-over-week. After deducting its 0.19% expense ratio, WEEK currently pays a 3.4% 30-day SEC yield.
BondBloxx Bloomberg One Year Target Duration US Treasury ETF (XONE)
“Considering ongoing U.S. economic growth, sticky inflation and the Trump administration’s policies, our view is that investors should stay short in duration in their Treasury exposure, as we expect continued heightened volatility at the long end of the Treasury curve,” says JoAnne Bianco, partner and senior investment strategist at BondBloxx. Treasurys with maturities of one to three years are considered short.
XONE is one option for investors seeking short-term Treasury exposure. The ETF tracks the Bloomberg U.S. Treasury One Year Duration Index, with half the portfolio allocated to Treasurys maturing in less than one year and the other half maturing between one and two years. That results in an average duration of about 0.9 year, helping insulate the fund from interest-rate volatility.
BondBloxx Bloomberg Ten Year Target Duration US Treasury ETF (XTEN)
The 10-year Treasury yield is one of the most closely watched financial benchmarks. It influences everything from mortgage rates and corporate borrowing costs to equity valuations and consumer lending. Rising yields can signal expectations for stronger growth, higher inflation or tighter monetary policy, while falling yields are often associated with slowing economic conditions or recession fears.
Investors looking to express a view on the 10-year Treasury yield may find XTEN appealing. XTEN tracks the Bloomberg U.S. Treasury 10 Year Duration Index and maintains an average duration of 9.8 years. That makes the ETF substantially more sensitive to interest rate movements than VTG or GOVT. After accounting for a 0.08% expense ratio, XTEN currently pays a 4.5% 30-day SEC yield.
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7 Best Treasury ETFs to Buy Now originally appeared on usnews.com
Update 05/28/26: This story was published at an earlier date and has been updated with new information.
