Elevated equity market volatility in October had investors seeking refuge in short-term Treasuries and the related exchange traded funds, including the SPDR Barclays 1-3 Month T-Bill (NYSEArca: BIL).
BIL tracks the Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index and “seeks to provide exposure to zero coupon U.S. Treasury securities that have a remaining maturity of 1-3 months,” according to State Street Global Advisors (SSgA).
The ability to generate returns in short-dated fixed income ETFs has increased. As a result, money has been flowing into short term treasuries and cash type products to gain interest from investors who are hedging against market risk.
“The SPDR Bloomberg Barclays 1-3 Month T-Bill ETF, ticker BIL, had the largest inflow since 2011 on Monday, with $581 million coming in. The fund has attracted more than $1.7 billion this month, putting it on track for the largest monthly inflow since August 2011,” reports Bloomberg.
Another Treasury Investing Idea
In addition to BIL, the Goldman Sachs Treasury Access 0-1 Year ETF (NYSEArca: GBIL) has also been attracting new money.
GBIL, which is two years old, looks to reflect the performance of the Citi US Treasury 0-1 Year Composite Select Index, which is comprised of U.S. Treasury Obligations with a maximum remaining maturity of 12 months. U.S. Treasury obligations refer to securities issued by the U.S. Treasury where payment of principal and interest is backed by the U.S. government.