To The Moon

🌟🌟🌟Vanguard has just launched $VANGUARD 0-3 MONTH TREASURY BILL ETF(VBIL)$ in February with the lowest expense ratio compared to BIL $SPDR Bloomberg Barclays 1-3 Month T-Bill ETF(BIL)$ and $iShares 0-3 Month Treasury Bond ETF(SGOV)$  

VBIL's expense ratio is 0.07% which is lower than BIL's expense ratio at 0.14% and SGOV at 0.09%.

VBIL seeks to track an index of investment grade US Treasury Bills that have maturities of 3 months or less.  VBIL tracks the Bloomberg US Treasury Bills 0 - 3 Months Index.

I am looking at VBIL because Warren Buffett's Berkshire Hathaway is sitting on a record breaking USD 334 billion in cash, the largest stockpile in its history.   Is this a signal that Warren Buffett is bracing for a market downturn , or is there a strategy in play?

Some people assume that Warren Buffett is trying to  predict the next market crash.  In reality his strategy is not about timing the market's ups and downs but about assessing long term value of stocks.  Instead he is focusing on whether current stock prices offer good long term returns.

For small investors like me , the lessons to be learnt is to be patient as the best opportunities come when markets panic , not when they are euphoric.

A cash management strategy heavy on TBills prioritises safety and liquidity while reaping the returns associated with the safest short term instrument - US Treasury Short Term Treasury Bills.

Why is that so?

T Bills are backed by the full faith and credit of the US Government.  Compared to other bonds issued by the US Treasury, TBills have short maturities , in this case 0 to 3 months .  This means that they have the least exposure to interest rate risk and are therefore subject to minimal price variation .

Even within the TBill category , Warren Buffett has been vocal about focusing on shorter term options like the 6 month and below , to further mitigate this risk.

This combination of low default and interest rate risks makes TBills a trusted option for preserving capital.

VBIL is a good way to park my cash while waiting to invest in stocks .  The current dividend yield is 4.3%. VBIL has just gone ex dividend on April 1 with a payable date of April 3.  VBIL pays dividends monthly.   The next one is due early May .

Performance wise VBIL is relatively steady with a small dip of 0.25% in the past 5 days.

Warren Buffett must be doing something right as $Berkshire Hathaway(BRK.B)$  is up 18% year to-date and in 2024, Berkshire Hathaway has risen 27%.  In contrast $SPDR S&P 500 ETF Trust(SPY)$  is down 4% and in 2024 it is only up 8%.

Even though VBIL has just started in February this year, it has an Asset Under Management of USD 550.57 million.  The Fund Manager Vanguard is among the world's largest equity and fixed income managers.

I believe that VBIL is a good short term way to park my spare cash while waiting for the markets to stabilise.  Donald Trump's Trade Tariffs are causing lots of uncertainties in the markets and the possibility of trade wars too.  

$VANGUARD 0-3 MONTH TREASURY BILL ETF(VBIL)$ is also my tactical play to balance my portfolio against market volatility.

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