Schwab offers several Treasury money market mutual funds including the Schwab US Treasury Money Fund Ultra Shares (SUTXX) and the Schwab US Treasury Money Fund Investor Shares (SNSXX). Many investors ask about the differences between these two funds since they are two of the largest Treasury money market mutual funds in the market today. When comparing SUTXX vs SNSXX, it is clear which fund is best for most investors.
The Short Answer
SUTXX and SNSXX are two share classes of the exact same fund! There is no need to compare SUTXX vs SNSXX because the only difference is the minimum initial investment amount and the expense ratio. Investors who can make an initial purchase of $1M or more will get a higher yield with SUTXX.
SUTXX vs SNSXX Historical Performance
Since its inception, SUTXX has outperformed SNSXX by .07% on an annualized basis. This has compounded to a .22% cumulative difference over the past 3 years, which is relatively small. Currently the yield difference is about .15% however, so future performance may deviate further.
Current Yields for SNSXX & SUTXX
The current 7 day yield is a standardized yield metric for money market mutual funds and the 7 day yields for both SUTXX and SNSXX can be found on the fund’s webpages. See here for SNSXX and here for SUTXX.
What rate is SUTXX & SNSXX paying?
The current interest rate for SUTXX, SNSXX, and other Schwab money markets can be found on Schwab’s money market page.
SNSXX & SUTXX Details
The expense ratio is .34% for the SNSXX investor shares and .19% for the SUTXX ultra shares. Since the funds are just different share classes of the same portfolio, this difference in expenses is what accounts for the differences in yield and performance. Neither fund charges a load or 12b-1 fees.
SNSXX has no minimum investment and investors can invest as little as one cent, while SUTXX has a minimum investment of $1 million. My observation is that investors can keep SUTXX even if they sell and their balance falls below $1 million. The $1 million minimum seems to only apply to the initial purchase.
I have not checked every brokerage, but SUTXX and SNSXX is generally only available to clients of Charles Schwab.
Like most money market mutual funds, investors can sell SUTXX or SNSXX at any time.
SNSXX & SUTXX Risks
Hypothetically, an investor could lose money with SUTXX or SNSXX, but I personally do not think that is a realistic risk as I believe the fund sponsor or the federal government would intervene if that were about to happen. Technically, it is possible to lose money in SNSXX or SUTXX though.
As of June 30, 2023, the fund was composed of approximately $15 billion in the investor shares and $17 billion in ultra shares.
Is SNSXX or SUTXX FDIC Insured?
No, neither SNSXX nor SUTXX are FDIC insured.
Holdings
The two funds are share classes of the same portfolio, so the holdings are identical. The funds own 100% Treasury debt. Since Treasuries are so liquid, the funds holdings have a longer average maturity than many money markets. Only 16.7% of the fund has a maturity of less than a week and only ~37% of the holdings mature in less than one month.
High Balances
Investors allocating more than $1 million may want to consider the “ultra” share class of the fund, whose symbol is SUTXX.
Tax Considerations
SNSXX and SUTXX are Treasury funds which means that they only invest in Treasuries. However, taxable investors may find better after-tax yields in municipal (muni) money market funds, which offer tax benefits that may improve investors’ after-tax yield.
Muni Money Market Funds
Investors subject to higher tax rates may consider municipal (muni) money market funds due to the fact the interest is typically exempt from federal income tax (and often from state tax too!).
The caveat with muni money market funds though is that the yields can move up and down A LOT. Therefore, the stated yield that an investor looks up on any given day is not necessarily indicative of the future return. To understand why, read my post on muni money market yields.
Rather than expecting a muni money market fund’s stated yield, I encourage investors to expect the trailing average yield (over the past few weeks). Generally speaking, the after tax returns of munis will only be higher than non-muni money markets for those in the highest tax brackets.
Which is Best? SUTXX or SNSXX?
Overall, SNSXX is a good investment for many situations. Those investing more than $1 million should generally go with SUTXX for the higher yield. Investors who are subject to high tax rates may want to consider other funds though.
