Treasury Money Market
Treasury money market funds could equally be called “cash”. They consist of very short term US treasury T-bills with a maturity of a few months up to one year, and because of the direct backing of the US government they are considered the single safest way to hold cash.
Although they are really a subset of bonds, I group treasury money market funds with “Other” as most investors (rightly or wrongly) tend to think of their cash separately from other investments. They also are a little different than most bonds in that they don’t have a coupon payment. They simply sell at a discount to their ultimate redemption price.
While popular historically, in today’s very low interest rate environment a common substitute with slightly higher interest rates and only a little more risk is short term treasuries.
- 1970-1992: T-Bills (simulated with FRED TB3MS interest rates), S
- 1993+: Vanguard Treasury Money Market Fund (VUSXX), P