Gyroscopic Investing

Swedish Treasury Bills are in practice unobtainable by the common man on the street as the minimum order is a 1 million SEK. So I am a little bit lost regarding how to save my cash.

I got a few options which I have found available to me, what would you recommend?

• Savings account with  bank-failure insurance from the government
• Mutual fund of Commercial bonds with a duration shorter than 1 year
• Mutual fund of State Treasury bonds, Municipal bonds, Mortgages and bonds from very credit worthy companies with a duration between 5 to 15 years
• Mutual fund of Inflation compensated bonds with a duration between 5 to 15 years

Is there a mutual fund of Swedish T-bills?

KevinW wrote: Is there a mutual fund of Swedish T-bills?

I do not believe so, I have not found anyone yet.

OK, well I don't have any Sweden-specific advice to offer and AFAIK this is the first time a Swedish PP has come up. My first advice is to look thoroughly for a mutual fund or ETF-like vehicle that holds ultra short term (<1 year) Swedish treasury bills. Or, look for a consumer-oriented government savings program like the US Savings Bond program.

If those fail, then you have to accept taking on more interest rate risk and/or credit risk than T-bills. Personally I am more comfortable with rate risk, so I think the second-best option is a short term (1-5 years) Swedish treasury fund. The third-best is an ultra short term (<1 year) fund that includes a mix of corporate and government paper, and it sounds like you have that ("Mutual fund of Commercial bonds with a duration shorter than 1 year"). I don't know about Sweden, but in the US these kinds of funds are usually about 50% Treasuries, so this could be worse.

Another idea that's been discussed is to merge the 25% cash (T-bills) and 25% bonds (long term T-bonds) into a big 50% intermediate-term T-bond allocation. You could try searching for the terms "bullet" and "barbell." This might work well if you have access to an intermediate Treasury fund but no acceptable cash fund.

Finally, I would be interested to know what funds or vehicles you've chosen for the other three assets. It would be nice to document a way of implementing a Swedish PP, in case someone else has the same question.

I finally found 2 mutual funds that is purchases mostly Swedish Treasury Bills:

https://www.avanza.se/fonder/om-fonden. ... ond-sek-fi
https://www.avanza.se/fonder/om-fonden. ... rknadsfond

Hopefully these would be very stable kind of funds. However, the interest may be negative at this time due to the extremely low interest rates of 0% that riksbanken set a month ago.

The fund that deals in commercial bonds, mortgages, etc. seems to be doing a lot better:
https://www.avanza.se/fonder/om-fonden. ... nd-sverige

lordmetroid wrote: I finally found 2 mutual funds that is purchases mostly Swedish Treasury Bills:

https://www.avanza.se/fonder/om-fonden. ... ond-sek-fi
https://www.avanza.se/fonder/om-fonden. ... rknadsfond

Hopefully these would be very stable kind of funds. However, the interest may be negative at this time due to the extremely low interest rates of 0% that riksbanken set a month ago.

The fund that deals in commercial bonds, mortgages, etc. seems to be doing a lot better:
https://www.avanza.se/fonder/om-fonden. ... nd-sverige

Well that makes sense, but remember that mortgages and commercial bonds are what will be blowing up in a crisis. More risk for more reward, which is not what you really want to be doing with your cash.

lordmetroid wrote:

• Savings account with  bank-failure insurance from the government

My vote.  I'm sure such banks offer CD's too.

Funds are a bad idea due to management fees; leverage and lack of holding to maturity.  Capital losses are not guaranteed to make it back when you need it or ever.

You can buy US treasury bills.  Or, you can buy an ETF which invests in US treasury bills, such as BIL, SHV, FDLXX, or GABXX.