SGOV - TBIL: Short Term Fund Outperforming Peers

2024-06-17 16:25:57 ET

Summary

• The US Treasury 3 Month Bill ETF is a fixed income exchange-traded fund.
• TBIL fund composition includes only AAA rated T-Bills with 30-day SEC yield of 5.11%.
• TBIL has slightly edged out similar funds (SGOV, BIL) since the Federal Reserve raised interest rates.
• Strong returns are expected as long as Fed rates stay high, with most investment banks predicting only one cut for 2024.

Thesis

The US Treasury 3 Month Bill ETF ( TBIL ) is a short term treasury fund. A lot of ink has been spilled around investors needing to allocate more risk in their portfolios, but yet we are seeing record low credit spreads and overstretched equity markets. A retail investor needs to keep in mind that the name of the game is to make money, not buy overvalued assets. When both equities and credit look overbought, staying in cash is not only smart, but also in agreement with what many other market participants are doing:

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