BIL vs VUSB

BILAState Street SPDR Bloomberg 1-3 Month T-Bill ETF

VUSBAVanguard Ultra-Short Bond ETF

In short

BIL The original T-bill ETF, running since 2007: a giant, heavily traded stack of one-to-three-month Treasury bills that pays out monthly. Newer copycats undercut it on fee, but few match its trading footprint.

VUSB Vanguard's first actively managed bond ETF, run by its in-house fixed income team and priced at 0.10%. It holds investment-grade paper maturing inside two years: a step past a money fund, well short of a real bond fund.

Stated mandate

BIL The fund seeks to track the price and yield performance of the Bloomberg 1-3 Month U.S. Treasury Bill Index before fees and expenses. It provides exposure to publicly issued U.S. Treasury bills with maturities of one to three months.

VUSB The fund seeks current income with limited price volatility while investing in diversified high- and medium-quality fixed-income securities. It expects to maintain a dollar-weighted average maturity of 0–2 years.

Why people hold it

• BIL Holds publicly issued US Treasury bills maturing in one to three months, so the credit is the US government and rate sensitivity is measured in weeks, not years.ssga.com
• A straight index job against the Bloomberg 1-3 Month U.S. Treasury Bill Index, tracked closely: no credit tiers, no duration calls, no moving parts to second-guess.
• One of the most actively traded funds in its category, with a multi-billion-dollar asset base behind it, so getting in and out is rarely the hard part.
• Pays monthly and has run this same narrow mandate since 2007, across zero-rate years and high-rate years alike.

• VUSB At 0.10%, it costs half the typical ultra-short bond ETF and undercuts the other leaders in the group: SHV, PULS, FLDR and DUSB all charge 0.15%.
• Active, not adventurous. The managers buy investment-grade bonds (A3-or-better high quality plus BBB-tier medium quality) and hold average maturity to zero-to-two years.vanguard.com
• Income lands monthly, sourced from roughly 170 bonds, so no single issuer drives the outcome.
• A multi-billion-dollar fund that trades actively, and the same portfolio team also runs a similar Vanguard ultra-short fund.vanguard.com

Worth knowing

• BIL The 0.14% fee is the trade-off. Rivals run near-identical bill exposure for less (VBIL at 0.06%, CLIP at 0.07%), and on T-bills the fee is most of the gap.
• Income moves with short-term Treasury rates. The monthly payout is whatever bills are yielding, so it rises and falls with them rather than sitting fixed.
• A few dozen bills, all maturing inside three months. That is a cash parking spot by design, with no mechanism for capital growth.

• VUSB This is not a money market fund. No fixed $1 share price, and the market price can trade above or below the value of the holdings.vanguard.com
• The mandate allows BBB-tier credit, a notch of risk a Treasury-only neighbor like SHV doesn't take.vanguard.com
• Bonds this short reprice with short-term rates, so the monthly payout drifts up and down instead of holding a set level.vanguard.com

Full BIL profile⁠

Full VUSB profile⁠