Barron's on Treasury Bill ETFs
Barron's writes "These Are the Hottest Bond ETFs This Year—and for Good Reason." The article tells us, "Treasury bills have rarely been more attractive, and exchange-traded funds make owning them easier than ever.... Berkshire Hathaway CEO Warren Buffett has long stashed the bulk of the company's ample cash reserves in Treasury bills because they're the safest short-term bond investments. Berkshire now holds over $300 billion of Treasury bills, or about 5% of the entire $6 trillion market. Retail investors are also getting in on the act: Noncompetitive bids at Treasury auctions, a reflection of retail demand, are running at about $15 billion a month." The piece says, "Reflecting the boom in fixed-income exchange-traded funds, Treasury-bill ETFs are rapidly gaining in popularity and challenging money-market funds and bank deposits as a place for retail investors to park cash. T-bill ETFs now hold over $100 billion in assets, but are dwarfed by money-market funds, which have $7 trillion in assets. The two largest are the $48 billion iShares 0-3 Month Treasury Bond ETF, which launched in 2020, and the $44 billion SPDR Bloomberg 1-3 Month T-Bill ETF, which has been around since 2007. Vanguard entered the market in early 2025 with the Vanguard Ultra-Short Treasury ETF, which has an annual fee of just 0.07%, against 0.09% for the iShares ETF and 0.14% for the SPDR ETF. They yield in the 4.2% to 4.3% range. The iShares ETF has attracted $18 billion of inflows so far this year, the most of any bond ETF." Barron's adds, "The T-bill ETFs, however, offer advantages over buying direct, including simplicity, a diversified pool of securities, monthly income, and ready liquidity on the NYSE or Nasdaq. One benefit over money-market funds is taxes. Interest on T-bills is exempt from state and local taxes, a nice plus for investors in states like New York and California where income-tax rates can top 10%. CD interest is subject to state and local taxes, as is much or all income from money funds, including many popular 'government' funds."
