From sgov to Xhlf?

[SpanishInquisition]

I am thinking of moving about two percent of my assets from sgov to Xhlf in a taxable account, kept as a quasi-cash buffer zone in case anything untoward happens to me or the markets.

Sgov, of course, is iShares 0-3 month treasury etf, and Xhlf is bondbloxx 6 month target duration treasury etf.

The net expense ratio for iShares Sgov recently ticked up marginally to .09 percent, with a bid-ask spread of .01 percent or less, while the expense ratio for Xhlf seems steady at .03 percent, with bid-ask spread of about .02 percent, and Xhlf now has a billion dollars dollars in assets (Sgov is of course gargantuan) in the fund so it seems to me that it has grown into a stable reliable fund. I also feel that as the yield curve un-inverts, there may be a marginal advantage in the very slightly higher duration for Xhlf, though I realize there’s a bit of market timing mentality in that line of thinking.

I am thinking of selling sgov on the day before its ex-div date and buying Xhlf on its ex-div date. It seems to me that the capital gains from the sgov sale should extremely easily all be offset by some long-term capital losses I have accumulated in my taxable brokerage account.

I want to make sure I am thinking straight here. This is intended as a long-term change in position. I don’t move assets often or easily, Any thoughts? Thanks!!

[the_wiki]

Unless we are talking 7 figures, I don't think it's worth your time to be trying to optimize this hard. But either fund will be fine.

[RacquetSports]

I’ve recently added a small xhlf position to my taxable account for those reasons: smaller ER and longer duration. It may not move the needle much but it felt like a smart decision I could implement.

[Tabulator]

Is there a good reason to consider XBIL as an alternative to XHLF?

I don't have a membership at Seeking Alpha, so I can't read details. But for some reason it appears that contributors there favor XBIL, and I'm wondering if any Bogleheads have insights or opinions on this question.

I believe XBIL has a greater expense ratio.

[beyou]

I am consolidating my short term safe holdings to this fund. Excellent management team at this fund manager, rock bottom er, and longer dur than mmkt will benefit from rate reduction soon.

Consolidating from VUSXX and savings bonds to this fund.

I also dont like how SGOV pays year end dividends (2 in dec, none in jan).

[Tabulator]

I am consolidating my short term safe holdings to this fund.
Consolidating from VUSXX and savings bonds to this fund.

Which fund?

[beyou]

I am consolidating my short term safe holdings to this fund.
Consolidating from VUSXX and savings bonds to this fund.

Which fund?

The subject of this thread, XHLF, same as the OP is considering doing.

[FellsGuy]

Just to make sure I'm getting this right its 3 bps v 9 bps that's kicking this whole thing off? One if this is a small amount of money its not worth worrying about and if this is a huge sum of money why are you worrying about it? or simply buy t-bills yourself and put them on autoroll if you think ishares is zero value add do it yourself. this is a difference of $600 per annum per million in assets in SGOV, money is supposed to free us not enslave us.

[Tramper Al]

Were it me, I'd model roughly how long it will take (years?) the savings in expense ratio to pay for the realized capital gain, to a breakeven. I know there may be realized losses elsewhere, but they have value that can be applied to another (unavoidable) gain, or even ($3K annually) ordinary income (to the greatest benefit). If that breakeven time frame didn't look so good, I think I might bide my time until some or all of the SGOV could be sold for a loss. And finally, I'd have to make an immediate swap - that is not be out of the market, without my allocation exposure to short term treasuries, for any longer than was necessary to get the transactions done. I enjoy stuff like this, and I wouldn't let anyone tell me it's not worth THEIR time, as that's irrelevant.

[bh1]

You SGOV ER per million dollars is $18, assuming 2% of your portfolio.

I spent much of the last few years violently squeezing my portfolio ER. Just this week, I started converting all my stock investments to VT and Chill. Yes, it will cost me a some hundreds of dollars more every year, but the time overhead and likelihood of eventual mistakes are far more costly than that.

[FellsGuy]

Were it me, I'd model roughly how long it will take (years?) the savings in expense ratio to pay for the realized capital gain, to a breakeven. I know there may be realized losses elsewhere, but they have value that can be applied to another (unavoidable) gain, or even ($3K annually) ordinary income (to the greatest benefit). If that breakeven time frame didn't look so good, I think I might bide my time until some or all of the SGOV could be sold for a loss. And finally, I'd have to make an immediate swap - that is not be out of the market, without my allocation exposure to short term treasuries, for any longer than was necessary to get the transactions done. I enjoy stuff like this, and I wouldn't let anyone tell me it's not worth THEIR time, as that's irrelevant.

Tramper
You're right if this is someone's thing I didn't mean to diminish it I was coming from the angle of have you taken a look at what this is really saving you because I feel like sometimes on the forum we get so caught in parsing out already very low charges we miss the forest for the trees. It also seems to me if you really like paper thin slices you'd never buy SGOV or XHLF when you can buy treasuries direct or for free through Fidelity or Vanguard I mean there goes $300 per million for nothing XHLF and on 10MM in treasuries 3,000 per year that could have been plowed right back into buying more treasuries direct so I get it.

[Tramper Al]

Tramper
You're right if this is someone's thing I didn't mean to diminish it I was coming from the angle of have you taken a look at what this is really saving you because I feel like sometimes on the forum we get so caught in parsing out already very low charges we miss the forest for the trees.

Well, I can agree that getting around to that last 0.06 ER difference in short term treasuries would for me probably be one of the last projects - that I may never get to. But I totally get where the OP is coming from and how sometimes the thought process and execution can itself be satisfying, even if the savings may amount to splurging on grande lattes while reading the financial section or occasional pints down the local.

[FellsGuy]

Tramper
You're right if this is someone's thing I didn't mean to diminish it I was coming from the angle of have you taken a look at what this is really saving you because I feel like sometimes on the forum we get so caught in parsing out already very low charges we miss the forest for the trees.

Well, I can agree that getting around to that last 0.06 ER difference in short term treasuries would for me probably be one of the last projects - that I may never get to. But I totally get where the OP is coming from and how sometimes the thought process and execution can itself be satisfying, even if the savings may amount to splurging on grande lattes while reading the financial section or occasional pints down the local.

HAHA I love it Tramper FT and a pint