Why would anyone outside the US consider US treasury bills to be a safe place to store money? Most people on earth? I think not.1) If you view the fund page on Fidelity's website, you can click on "composition" and see what it holds, it only holds govt debt, and almost 60% of the fund holds US govt debt that matures in a week or less. If you can't trust the govt to pay their bills in the coming week, then you shouldn't trust this fund at all. I would argue most people on earth would consider US treasury bills one of the safest places to store money on the planet.
2) Yes it's generally competitive with HYSA's. In a rising rate environment, it will be quicker to adapt to the new higher rate, but in a falling rate environment, the HYSA would be slower to adapt to the new rate. It basically all evens out in the end.
Also, even with 1yr of an EF, it won't be much of your net worth for long, so the actual cash return will be so tiny that it won't move the needle even a little bit, so it's not really a big deal if you aren't at the highest possible rate. If you do the math on what .5% ER difference would be on your 12 months of EF, I think you would go, oh, is that all we are talking about here? And then promptly stop worrying about cash return rates much.
Statistics: Posted by anagram — Tue Dec 26, 2023 1:01 am — Replies 8 — Views 906