Best cash and T-bill ETFs: Vanguard's bill fund is the cheap one
The large T-bill funds returned 3.69% to 3.80% over the year through Oct. 30, while funds quoting more than that hold other debt, not just bills.
Key takeaways
Vanguard charges the least of the large funds that hold Treasury bills maturing within three months. The Vanguard 0-3 Month Treasury Bill ETF VBIL charges 0.06% and returned 3.76% over the year through Friday, Oct. 30. The other large bill funds finished between 3.69% and 3.80%.
On Oct. 28 the U.S. Federal Reserve held its target range for the federal funds rate at 3.75% to 4%. These funds pay the income on the bills they hold, after the fee, and the payout changes as those bills mature.
Treasury bill funds
The four below hold Treasury bills maturing within three months, and each has billions in assets. A fund that holds Treasuries out to a year is a different choice, however large it is.
The one-year figures are total returns through Oct. 30, including payouts.
Vanguard's $12.8 billion is as of Sept. 30, the latest figure it reports. The other three are as of Oct. 30.
We grade VBIL an A, and the same letter goes to CLIP, SGOV and BIL.
A 30-day SEC yield is the Securities and Exchange Commission's measure of recent fund income, annualized. It is not the next payment. In late October, Vanguard, iShares, Global X and State Street reported yields of 3.79% to 3.83%.
On $10,000, the gap between 0.06% and 0.09% is $3 a year. That is the fee difference between VBIL and SGOV.
CLIP is the close call. It charges 0.07%, holds bills with one to three months left rather than anything shorter, and returned 3.80%.
BIL charges 0.1352% and returned 3.69%, the least of the four. The extra fee did not buy a better year.
Vanguard launched VBIL on Feb. 7, 2025, so it has no three-year record yet. iShares has run SGOV since May 26, 2020.
Ultra-short bond funds
A higher posted yield is not a better T-bill fund. It is payment for owning other debt. Over the year through Oct. 30, that was a mixed bet.
JPMorgan Ultra-Short Income ETF JPST charges 0.18%, and J.P. Morgan reported $42.5 billion in the fund as of Oct. 29.
As of Sept. 30, investment-grade corporates were 58.2% of the fund, average duration was 0.64 years, and the 30-day SEC yield was 4.49%, J.P. Morgan reported. JPST returned 3.57% over the year through Oct. 30, behind every bill fund in the table.
PGIM Ultra Short Bond ETF PULS returned 4.19%, ahead of every bill fund in the table, and charges 0.15%. PGIM reported $19.6 billion in the fund as of Oct. 30, and a 30-day SEC yield of 4.48% as of Sept. 30.
PIMCO Enhanced Short Maturity Active Exchange-Traded Fund MINT also beat the bill funds, returning 4.27%, though it charges 0.36% and we grade it a B.
MINT and PULS beat the T-bill funds; JPST trailed them
If the money is meant to sit in Treasury bills, VBIL is the cheap fund. A higher quote means other debt, and this year that extra yield sometimes showed up in the return and sometimes did not.
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