Fidelity - SHV BIL or TBILL ladder (auto roll)
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Fidelity - SHV BIL or TBILL ladder (auto roll)
Any opinions on what to choose at Fidelity for a 401k
SHV, BIL, or TBILL ladder (or auto roll as I see people calling on it on the forum) or maybe Fidelity short term treasury fund, or vanguard short term treasury fund (I think Fidelity will let me do this). I have the option to choose any of these.
Also any opinions on cash fund advantages / disadvantages in the form of etf, or direct ownership (via fidelity), or mutual fund.
Thanks!
SHV, BIL, or TBILL ladder (or auto roll as I see people calling on it on the forum) or maybe Fidelity short term treasury fund, or vanguard short term treasury fund (I think Fidelity will let me do this). I have the option to choose any of these.
Also any opinions on cash fund advantages / disadvantages in the form of etf, or direct ownership (via fidelity), or mutual fund.
Thanks!
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
Personally if you're at Fidelity I see no reason not to auto-roll T-Bills direct. Buying and holding auto-roll T-Bills is no more difficult than buying and holding an ETF. Why pay an ER and accept less yield when it doesn't save you any real effort and adds in an extra layer of counter party risk to boot?
That being said, if you want to do an ETF instead SHV or SHY are perfectly fine for anything that is not considered "deep cash". Most of us get a bit more creative with "deep cash" and assume a little extra risk and/or reduced liquidity for a little extra return.
That being said, if you want to do an ETF instead SHV or SHY are perfectly fine for anything that is not considered "deep cash". Most of us get a bit more creative with "deep cash" and assume a little extra risk and/or reduced liquidity for a little extra return.
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
IMO, all of these options are perfectly fine. I'd pick whichever has the lowest expenses, which is probably the auto-roll ladder.
+1pmward wrote: ↑Mon May 20, 2019 4:06 pm Personally if you're at Fidelity I see no reason not to auto-roll T-Bills direct.
...
That being said, if you want to do an ETF instead SHV or SHY are perfectly fine for anything that is not considered "deep cash". Most of us get a bit more creative with "deep cash" and assume a little extra risk and/or reduced liquidity for a little extra return.
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
Here's an alternative to BIL... Invesco Treasury Collateral ETF, symbol CLTL
Distribution Yield (trailing 12 month figure)
BIL 2.14%
CLTL 2.34%
It's 5.6 basis points cheaper than BIL. The performance is better, it's 100% T-Bills and T-Notes, no repo. I'm putting my Schwab Cash into it, instead of the Schwab Money Market choices, which are full of things I don't want to own.
Distribution Yield (trailing 12 month figure)
BIL 2.14%
CLTL 2.34%
It's 5.6 basis points cheaper than BIL. The performance is better, it's 100% T-Bills and T-Notes, no repo. I'm putting my Schwab Cash into it, instead of the Schwab Money Market choices, which are full of things I don't want to own.
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
Sure that's why I have adopted "market on close" orders. No spread. But I'll look at the spread during the day next week.
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
Personally I'm a fan of SCHO. It's the Schwab equivalent of SHY but with less than half the ER. And it now trades free at Fidelity.
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Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
i use bil .....
but remember , when comparing an etf yield with a money market yield they re calculated differently .
money markets are the 7 day average . etf's are the average of the last 30 days ending at the end of the last month
but remember , when comparing an etf yield with a money market yield they re calculated differently .
money markets are the 7 day average . etf's are the average of the last 30 days ending at the end of the last month
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
Everything is now commission-free at Fidelity. But why not use FUMBX which at 0.03% is cheaper than any ETF and you don't have to worry about spreads?
"Let every man divide his money into three parts, and invest a third in land, a third in business, and a third let him keep in reserve."
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Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
fumbx is more like shy ...it has durations over 2 years .. bil is 3 months ... i want short term to be short term in case rate go up so i like bil for the pp at this stage where rates can teeter totter either way ...
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
Cash sweep question... what is the difference between
FDRXX Fidelity® Government Cash Reserves
and
SPAXX Fidelity ® Government Money Market Fund
They seem very similar to me. FDRXX has a tiny bit higher 7-day yield at this time, and a tiny bit less "repo". I just changed my cash sweep option to FDRXX.
FDRXX Fidelity® Government Cash Reserves
and
SPAXX Fidelity ® Government Money Market Fund
They seem very similar to me. FDRXX has a tiny bit higher 7-day yield at this time, and a tiny bit less "repo". I just changed my cash sweep option to FDRXX.
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Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
i use fdzxx . that is the premium money market at fidelity . at this stage i don't really care about it being treasuries or not . the new rules on money markets make them mostly gov't paper anyway
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
I am concerned that Fidelity managers of FDRXX and SPAXX have been loading up with repos (now 46.60% and 48.98%, respectively) in their never-ending hunt for a minuscule improvement of yield in a super-low yield environment . US government repos are exposed to systemic risk that Treasury-issued securities lack. According to Investopedia:
“Nonetheless, in spite of regulatory changes over the last decade, there remain systemic risks to the repo space. The Fed continues to worry about a default by a major repo dealer that might inspire a fire sale among money funds which could then negatively impact the broader market. The future of the repo space may involve continued regulations to limit the actions of these transactors, or it may even eventually involve a shift toward a central clearinghouse system. For the time being, though, repurchase agreements remain an important means of facilitating short-term borrowing “
This is not how I want to be holding my cash in the next financial crisis.
“Nonetheless, in spite of regulatory changes over the last decade, there remain systemic risks to the repo space. The Fed continues to worry about a default by a major repo dealer that might inspire a fire sale among money funds which could then negatively impact the broader market. The future of the repo space may involve continued regulations to limit the actions of these transactors, or it may even eventually involve a shift toward a central clearinghouse system. For the time being, though, repurchase agreements remain an important means of facilitating short-term borrowing “
This is not how I want to be holding my cash in the next financial crisis.
“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!"
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!"
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
Isn't it interesting that Fidelity has kept a relatively high ER for its money market funds at the same time its massive advertising campaign highlights its "low fees"?
Lower fees, however, will not fix the problem of systemic risk in the repo market. The FOMC's repeated injections of liquidity in the last six months do not give me a warm fuzzy about the future stability of money market funds.
My Cash quadrant is currently composed of FDLXX / T-bills under 1 year maturities/ and US Savings Bonds. This mix is 100% Treasury issues and 0% repos.
Lower fees, however, will not fix the problem of systemic risk in the repo market. The FOMC's repeated injections of liquidity in the last six months do not give me a warm fuzzy about the future stability of money market funds.
My Cash quadrant is currently composed of FDLXX / T-bills under 1 year maturities/ and US Savings Bonds. This mix is 100% Treasury issues and 0% repos.
“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!"
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!"
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
dualstow,
You are probably correct that few people know what the ER is in their money market mutual fund.
However, the big money certainly knows: SPAXX, one of the cash sweep funds, has $152 billion in net assets. FDLXX, the Treasury only money market fund, has only $2.9 billion in net assets. Clearly, there is a marked preference for yield over safety.
You are probably correct that few people know what the ER is in their money market mutual fund.
However, the big money certainly knows: SPAXX, one of the cash sweep funds, has $152 billion in net assets. FDLXX, the Treasury only money market fund, has only $2.9 billion in net assets. Clearly, there is a marked preference for yield over safety.
“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!"
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!"
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Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
I don't believe FDLXX is offered as a sweep (aka core account as fidelity calls it) for any account types, while SPAXX is the default choice for many. My guess is SPAXX has more assets because people don't bother changing from the default sweep.
I keep my PP cash in this format:
50% FDLXX
50% auto roll t-bills
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
You are right that FDLXX cannot be used as a sweep account and SPAXX can. That explains part of the disparity in the size of the funds, but not all of it--in my view.
“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!"
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!"
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
This thread is very helpful. I had a minor freak out today when I looked at my Fidelity FDRXX cash portion of my golden butterfly portfolio and realized there is over forty percent “repurchase obligations”!
I’m going to research a bit but will likely move it all to FDLXX and then start doing auto roll t-bills.
I’m going to research a bit but will likely move it all to FDLXX and then start doing auto roll t-bills.
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
I also went to totaled all my fidelity expense ratio's and realized they are siphoning off a significant chunk of money. Least of which they are charging me a large amount of money to hold cash and make it somehow risky using FDRXX (repo's). I'm going to buy t-bill at auction.
Does anyone have a thought about just buying all 3 month bills or is it better to do a 1,2,3,6 distributed evenly? It seems that the difference in yield may not really be worth effort. I am also going to put them on autoroll.
Does anyone have a thought about just buying all 3 month bills or is it better to do a 1,2,3,6 distributed evenly? It seems that the difference in yield may not really be worth effort. I am also going to put them on autoroll.
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
Just put in 75% of my cash into 1 and 2 month t-bills auction for the tenth. I am going to put in an order for the rest at the next 3 month t-bill auction. (Auto-roll)
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Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
Curious to see if you have checked to see if they have had any issues during this current "financial crisis"? Or, have we not yet reached the state of being in a "financial crisis"?jhogue wrote: ↑Tue Jan 28, 2020 9:20 am I am concerned that Fidelity managers of FDRXX and SPAXX have been loading up with repos (now 46.60% and 48.98%, respectively) in their never-ending hunt for a minuscule improvement of yield in a super-low yield environment . US government repos are exposed to systemic risk that Treasury-issued securities lack. According to Investopedia:
“Nonetheless, in spite of regulatory changes over the last decade, there remain systemic risks to the repo space. The Fed continues to worry about a default by a major repo dealer that might inspire a fire sale among money funds which could then negatively impact the broader market. The future of the repo space may involve continued regulations to limit the actions of these transactors, or it may even eventually involve a shift toward a central clearinghouse system. For the time being, though, repurchase agreements remain an important means of facilitating short-term borrowing “
This is not how I want to be holding my cash in the next financial crisis.
Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
Re: Fidelity - SHV BIL or TBILL ladder (auto roll)
There are unresolved issues with the liquidity of the bond market, the extent of which are not entirely clear.
See:
Neil Irwin's article in the New York Times, "Something Weird Is Happening on Wall Street, and Not Just the Stock Sell-Off," March 12,2020.
and
Sonny Oh, "These are the 'highly unusual disruptions in the U.S. bond market that force the Fed to ramp up support to Wall Street," market watch.com, March 12, 2020.
See:
Neil Irwin's article in the New York Times, "Something Weird Is Happening on Wall Street, and Not Just the Stock Sell-Off," March 12,2020.
and
Sonny Oh, "These are the 'highly unusual disruptions in the U.S. bond market that force the Fed to ramp up support to Wall Street," market watch.com, March 12, 2020.
“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!"
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!"