TMM

Treasury Money Market

tmm-2017

 

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.

 

Index Funds

 


Source Data
  • 1970-1992: T-Bills (simulated with FRED TB3MS interest rates), S
  • 1993+: Vanguard Treasury Money Market Fund (VUSXX), P

 


Portfolios with Treasury Money Market assets