Repos and "Treasury" MM funds - the saga continues

Discussion of the Cash portion of the Permanent Portfolio

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Kevin K.
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Repos and "Treasury" MM funds - the saga continues

Post by Kevin K. » Wed Apr 19, 2023 8:59 am

Following up on some earlier discussion here with this post from Bogleheads:

https://www.bogleheads.org/forum/viewto ... f92128cbd8

Vanguard is also mentioned in the thread, with forty-some percent of VUSXX in repos vs. over 90% for FIDO.

Clearly worth the small amount of extra work to just "roll your own" Treasury MM fund by buying 13 and 26 week bills at auction and putting them on auto-rollover. Easy to do at Schwab - would think at FIDO too? - but unfortunately not possible at Vanguard.
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sophie
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Re: Repos and "Treasury" MM funds - the saga continues

Post by sophie » Wed Apr 19, 2023 10:59 am

Fidelity has two treasury money market funds. One is the "Treasury Only" (FDLXX) which invests only in T bills, and does not do repurchase agreements or other tomfoolery. The other is the Treasury money market that is eligible to be used as a brokerage core position (FZFXX). It's as you describe, not much in the way of Treasuries. But, as long as you understand the difference between these funds and opt for FDLXX, you're fine.

Autorolled T bills at Fidelity are easy to do. The reason to do this in addition to FDLXX is to improve yield. I hold my basic emergency fund in FDLXX (year's worth of expenses) and anything above that goes to T bills. It is slightly fiddly to buy more, plus last month's autoroll partially failed and only half the funds were rolled into new T bills, kind of annoying. So you do have to keep an eye on it.
Kevin K.
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Re: Repos and "Treasury" MM funds - the saga continues

Post by Kevin K. » Wed Apr 19, 2023 1:49 pm

Very smart way to do it Sophie! Thanks for the info and it’s always a treat to see your posts.
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mathjak107
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Re: Repos and "Treasury" MM funds - the saga continues

Post by mathjak107 » Mon Apr 24, 2023 7:44 am

fdlxx uses no repos .

the regular fidelity treasury money market does .

the 7 day yield is 4.15 on fdlxx vs 4.47 .

i prefer no repos and use fdlxx
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