Treasury Bills, Notes, and Bonds Discussion 2024+

Now you can cancel auto-roll on the website, so it does not hurt to set it on when buying.
 
I am a new Fidelity account holder and fixed income investor. I purchased my first large 8 week Treasury bill today. I had the option to select Auto Roll but held off for now as it is a new option for me.
Are most fixed income investors selecting Fidelity's Auto Roll option for now?
Does Auto Roll only work for the Treasury bill purchase or also the CD's that I hold in the account?
How large of purchase would you make in these Treasuries at one time?
It’s easy to turn off autoroll online for a specific treasury anytime now. And you usually also have an opportunity to cancel the autoroll buy order once it’s placed. It’s usually placed late afternoon of the auction announcement or the next day. I once had it place late early morning of the auction. You can also call in for help if needed.

I’ve been letting most of my T-bills roll over via autoroll.
 
Auto roll on short term treasuries,about six months or less, might make sense for some people. I would not use auto roll at a year or more. Too long to wait to correct a mistake.
 
One reason I use auto roll is that when you regularly reinvest the maturing T-Bill manually, you lose out on a week's worth of interest. Auto roll reinvests the money immediately or even shortly before. I have 3 month T-bills maturing on a monthly basis so that this is convenient and over the long term earn more interest.
 
I have 3 month T-bills maturing on a monthly basis so that this is convenient and over the long term earn more interest.
I am not sure about that. Right now we have an inverted yield curve where short term rates are higher than long term rates. That’s not the historical norm. I still like a Ladder from about one to 5 years. But, to each his own. Good luck.
 
This is not necessarily part of a ladder. I like having a T-bill mature monthly if I should need the money. For that purpose I have purchased 3 separate 3 month T-bills; one in each consecutive month, and I have a T-bill maturing every month. On the other hand, I do have bills and notes laddered further out. My point is if I renew that bill, I receive the money on the day it matures, go to the next auction, and the bill is repurchased a week after the previous one has matured. That time represents lost interest earned. This problem is alleviated by auto roll, which renews the matured bill on the same day or slightly earlier.

For example: If I have a $10,000 - 13 week T-bill that matures earning me $132.50 in interest, and it takes me a week to renew the bill, I have lost roughly $10.19 in interest.

Either that or my logic is wrong. (which wouldn't be the first time :confused:)
 
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One reason I use auto roll is that when you regularly reinvest the maturing T-Bill manually, you lose out on a week's worth of interest.
This is not true. At least at Schwab. I can put in an order for the auction to replace the maturing T-bill and while my account shows a negative balance for a few days, the money is there on the settlement date due to the maturing bill. I do this all the time.
 
You may be correct. I just came over to Schwab from TD Ameritrade in the last group to transfer over in May. I just started to utilized Schwab's auto roll and have not had any of these mature at this time. I also have accounts at Fidelity that have been using auto roll for some time. I did neglect to mention that Fidelity's sweep account is a money market account that mitigates the problem somewhat. But Schwab's sweep account only pays 0.0045% (I believe) and the week's layover to renew the bill is too short to temporarily put the funds into SWVXX. Fidelity does the roll over the day the old bill matures or shortly before. I have yet to experience a completed auto roll on Schwab.
 
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You may be correct. I just came over to Schwab from TD Ameritrade in the last group to transfer over in May. I just started to utilized Schwab's auto roll and have not had any of these mature at this time. I also have accounts at Fidelity that have been using auto roll for some time. I did neglect to mention that Fidelity's sweep account is a money market account that mitigates the problem somewhat. But Schwab's sweep account only pays 0.0045% (I believe) and the week's layover to renew the bill is too short to temporarily put the funds into SWVXX.
In my last discussion with my Schwab advisor, he told me he changed my sweep account to a higher interest rate. The symbol that shows up with interest payments is SWGXX at 4.92%. The rate is slightly below SWVXX.
I had been discussing previously over the past few months some issues I’ve had with Schwab and compared some to Fidelity. I think they were concerned about losing me.
 
This is not true. At least at Schwab. I can put in an order for the auction to replace the maturing T-bill and while my account shows a negative balance for a few days, the money is there on the settlement date due to the maturing bill. I do this all the time.
I do the same but it is manual process, I do not think auto-roll works that way at Schwab.
 
In my last discussion with my Schwab advisor, he told me he changed my sweep account to a higher interest rate. The symbol that shows up with interest payments is SWGXX at 4.92%. The rate is slightly below SWVXX.
I had been discussing previously over the past few months some issues I’ve had with Schwab and compared some to Fidelity. I think they were concerned about losing me.
In my experience Schwab doesn't offer any money market fund sweep options like Fidelity and Vanguard do, just a 0.45% on the sweep account. To get higher yields on your dry powder you have to manually sweep back and forth. It's frustrating enough that I'm considering moving everything to Fidelity. I wouldn't even mind paying a fee for a good sweep option, but none is offered.
 
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In my experience Schwab doesn't offer any money market fund options like Fidelity and Vanguard do, just a 0.45% on the sweep account. To get higher yields on your dry powder you have to manually sweep back and forth. It's frustrating enough that I'm considering moving everything to Fidelity. I wouldn't even mind paying a fee for a good sweep option, but none is offered.
Yep, this is why I mostly moved out of Schwab. Scraping days of interest is a deal breaker.
 
When buying secondary Treasuries I think I've noticed something interesting about the way they get paid for. On the day of the purchase, that night, any funds available in SPAXX, i.e. "cash", on the positions page are used to pay for the purchase. Fidelity automatically pulls from cash first and then from a non-core fund if the cash position wasn't enough to cover the purchase. What's interesting is that Fidelity doesn't pull from the non-core fund until the next night.

Example: Someone buys $100k of Treasuries but has $25k in SPAXX and the rest in a non-core fund. The next morning the positions page will show that SPAXX was emptied overnight, but $75k is still pending to be settled that night.

Does this mean that I'm receiving an extra day's interest on non-core funds vs SPAXX for Treasury purchases or is my thinking in error somehow?
 
I put an order in for today's 42-day T-bill and just noticed that it is a "cash management bill".

Is there anything special about this that I should know or that would make me want to wait for the next 4-week T-bill instead?
 
I put an order in for today's 42-day T-bill and just noticed that it is a "cash management bill".

Is there anything special about this that I should know or that would make me want to wait for the next 4-week T-bill instead?
CMBs for all purposes are exactly like T-Bills to the buyer. If you like bills and you are happy with the maturity of the CMB you bought, then you are fine.

CMBs just have a different term, sometimes somewhat random. The government uses these to fill holes in funding needs. They are not always regularly issued.

Sometimes, the gvmt finds that they are using the CMBs frequently, for a specific term, and then eventually make them T-Bills. An example of this is the 17-week bill. For a year or two, that was a CMB until the gvmt figured they'd just formalize it into a regular occurring bill.
 
With regular treasuries having moved so much, TIPS are looking more interesting, at least to me. Anyone fishing for them currently?
 
With regular treasuries having moved so much, TIPS are looking more interesting, at least to me. Anyone fishing for them currently?
Most of my longer term bonds (greater than about 4 years in my thinking) are TIPS bought when the real rate was near or above 2%. I’ve stopped buying as I have no funds to do so. If the real rate stays near or above 2% and money showers down on me, I might buy more. Both seem unlikely at the moment.
 
I bought a bunch of 10 year TIPS with real rates around 2%. I’m using them as a hedge against SORR and they’ll provide guaranteed income for 6 years.

With markets up, I’m tempted to buy more, maybe add another 1-2 years to the ladder. Hard part for me is I need TIPS that mature around 2037-8 and there’s no good solution for that problem.
 
I bought a bunch of 10 year TIPS with real rates around 2%. I’m using them as a hedge against SORR and they’ll provide guaranteed income for 6 years.

With markets up, I’m tempted to buy more, maybe add another 1-2 years to the ladder. Hard part for me is I need TIPS that mature around 2037-8 and there’s no good solution for that problem.
Same here.
Between rates finally normalizing, stocks on a run, and a change in my bond philosophy I’ve also been loading up on TIPS and treasuries at auctions.
Quite comforting having most of my FI backed by the US government and most of that inflation protected.
 
Same here.
Between rates finally normalizing, stocks on a run, and a change in my bond philosophy I’ve also been loading up on TIPS and treasuries at auctions.
Quite comforting having most of my FI backed by the US government and most of that inflation protected.

I’m an equity investor and never cared much for bonds. For fixed income, my requirement is no loss of principal. In the past, I invested in a stable value fund, but ditched that for treasuries, TIPS, and MM funds when rates increased. And with TIPS, I get insurance against inflation.

This lets me invest more in equities, since I know if SHTF, I have enough in FI to last 6+ years. That should be enough to get through most bear markets. And if it doesn’t, I can get creative, by cutting spending, taking SS, etc.
 
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