It looks like VSBSX has an expense ratio of .07%. I THINK that more or less offsets any hit you take by buying smaller lots of T-Bills. For example, when I bought some bills at Fidelity recently, the "list price" in their one-year bill area was 2.13%, but when I hit "depth of book" I ended up getting about 2.06% for my smaller lot (didn't have the $50,000 or $100,000 I needed to avoid that). One can see that actual yield right before hitting the execute trade button.
Yea, that's what I looked at previously (I think it was Xan on the other side of the discussion). I'm fine with paying Vanguard the ER, they can take care of all the details. If the yield on individual bills ever looks attractive vs the yield - ER of VGSH I would just switch back.
To answer Sophie's question, yes, I have started buying one-year bills but won't see what the tax treatment is on them until early 2020 as the first one will mature in early 2019. And by 2020 I will have forgotten to pay attention!
Mr Vacuum wrote:
The irony of a clear answer about precise tax treatment of 1 year tbills not yet appearing in this thread amongst analyzers and tweakers is a bit much considering they were Harry Browne’s clear and simple recommendation for one fourth or the portfolio
Indeed, I previously switched from funds to bills in taxable thinking it would mean less capital gains to think about and report since i was not selling but holding to maturity (but apparently didn’t check for sure??). I’ve got some maturing in July, so I’ll see how Fidelity classifies the gains then.
Like I said, at Vanguard when the bill mature, $1,000 is deposited in your settlement fund. Then you buy another bill for $997 or whatever. When it matures, $1,000 in the settlement fund again. When Vanguard spits out your 1099 it will have added up all the interest for you. If you sell them Vanguard calculates your capital gains/loss. Are you guys saying something I'm not getting?
I do like the idea of having just one cash position in any account, as it's much easier to keep track of than a T-Bill ladder.
How exactly does one track the price of individual treasuries on google sheets? Will google finance pull the value from cuspis?
I am thinking about switching, as IL does not allow for the US Treasury state income tax exemption if they are held thru mutual funds or ETFs.
I was just manually updating the price of the bill in my spreadsheet whenever I calculated my NW. I do that for my individual long bonds too.
sophie wrote:Interesting, I wasn't aware of the reduced yield for small lots of T bills bought at auction.
If you're referring to my comment, that was for bonds bought on the secondary
market through Vanguard, not at auction through Treasury Direct.