BIL vs SHV

BIL holds Treasury bills maturing in 1 to 3 months. SHV holds short Treasuries generally maturing within about a year. Both are backed by the US government and function as parking spots for cash, offering yield with negligible credit risk.

The difference is a small step out on the maturity curve, which slightly changes yield and price stability.

SHV's marginally longer maturity usually means a touch more yield than BIL, but also a bit more price sensitivity if rates move. BIL is about as stable as an ETF gets — its price barely fluctuates — making it a near-perfect cash equivalent.

When the yield curve is inverted, as it has been recently, the very shortest bills in BIL can actually yield as much as or more than slightly longer ones in SHV, narrowing any advantage.

For an emergency fund or dry powder you might deploy at any moment, BIL's rock-steady price is ideal. For cash you can leave alone a little longer and want to squeeze marginally more yield from, SHV is reasonable.

Both serve the 'cash' sleeve in strategies like the Permanent Portfolio. The choice between them is minor compared to simply holding a T-bill fund rather than idle cash.