Post
by jhogue » Sun Apr 19, 2020 8:58 am
Libertarian666 wrote: ↑Mon Mar 16, 2020 6:46 am
Fidelity has FDLXX, which contains only T-Bills and Treasury coupons.
You can keep all your cash in it even though it isn't eligible to be a core account; you just have to buy and sell it when you need money.
I've just entered orders to do that at the open.
The money markets are going to be in turmoil.
Stay safe.
(Edited because apparently it doesn't trade intra-day. However, you can still withdraw funds and they will sell whatever is needed at the end of the day.)
Investors who bought FDLXX because it contains ONLY T-bills and coupons should be aware that the fund has now begun buying a significant chunk of TIPS for its portfolio (7.2%), according to the 3.31.2020 Monthly Holdings Report which it has to file with the SEC. I have owned FDLXX in taxable and tax deferred accounts for over 5 years and do not recall seeing any TIPS in the fund's portfolio until now.
While TIPS are Treasury-issued securities, as mandated by the fund's prospectus, they do not behave in the same manner as T-bills. Their yield can go negative in an environment of falling interest rates and they have a different tax treatment. Long time members of this forum may recall that TIPS were craig's least favorite bond, for those among other reasons.
Whether this new development in the fund's strategy poses a problem for HBPP investors remains to be seen, but we will certainly want to scrutinize the fund's holdings going forward.
Last edited by
jhogue on Sun Apr 19, 2020 9:16 am, edited 6 times in total.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"