TFLO - BIL: T-Bills Are Good But These Funds And Asset Classes Are Better
2024-04-04 08:24:05 ET
Summary
- T-bills have become popular investments as yields have risen to 5.3%, and higher.
- Although t-bills are good investments, I think there are better ones.
- These include option strategies mimicking t-bill returns, floating rate treasuries, and AAA-rated CLO tranches.
The humble t-bill has become one of the most popular investments in recent years, as Federal Reserve hikes have caused yields to spike to 5.3%, highest in decades. Few asset classes yield as much as t-bills, fewer have comparable risk and volatility. Although t-bills are fantastic investments for short-term investors looking for a place to park their cash, I think there are several similar, but stronger, alternatives to t-bills. Three stand out.
The Alpha Architect 1-3 Month Box ETF (BOXX), which achieves marginally higher returns than t-bills, at effectively identical risk and volatility, with some potential tax benefits....
BIL: T-Bills Are Good, But These Funds And Asset Classes Are Better