BIL ETF Review: Is 1-3 Month T-Bill ETF Worth Buying?

SPDR Bloomberg 1-3 Month T-Bill ETF is the lowest-risk liquid investment available, holding ultra-short U.S. Treasury bills that serve as the cash management vehicle within the Energy Macro framework — dry powder earning the risk-free rate while waiting for high-conviction deployment opportunities.

Last updated: 2026-02-02 · Data: Yahoo Finance, fund prospectuses, SEC filings

What Is BIL?

The SPDR Bloomberg 1-3 Month T-Bill ETF holds ultra-short U.S. Treasury bills with maturities between one and three months. Managed by State Street, BIL tracks the Bloomberg 1-3 Month U.S. Treasury Bill Index, providing investors with direct exposure to the shortest-duration government debt available. With an expense ratio of 0.14% and $42.7 billion in assets under management since its 2007 inception, BIL functions as an institutional-grade cash management vehicle.

Current Snapshot

Why It Matters for Real Asset Investors

BIL serves as the foundational cash position in any regime-aware portfolio because T-bills represent the risk-free rate that everything else gets measured against. When the Energy Macro thesis calls for tactical patience—waiting for grid stress events, commodity cycles, or infrastructure selloffs—T-bills earning 4%+ provide optionality without opportunity cost.

This isn't "dead money" in a world where the 10-year Treasury yields 4.5%. BIL captures nearly the full benefit of short rates while maintaining perfect liquidity for deployment into real assets when dislocations occur. During periods of financial stress, when even quality infrastructure REITs can gap down 20%, T-bills become the ultimate defensive asset that actually pays you to wait.

The key insight: BIL shines when the Federal Reserve maintains restrictive policy while markets anticipate cuts that don't materialize. As long as overnight rates stay elevated, BIL compounds at levels that compete with dividend-paying utilities but without duration risk or credit risk. When rate cuts do arrive, BIL provides the dry powder to rotate into beaten-down energy infrastructure at attractive yields.

Top Holdings

BIL holds a rotating portfolio of Treasury bills issued by the U.S. Department of Treasury, with specific securities changing as bills mature and new issues are purchased. The fund maintains exposure to:

• 1-Month Treasury Bills: Offering maximum liquidity and rate sensitivity
• 2-Month Treasury Bills: Balancing yield pickup with short duration
• 3-Month Treasury Bills: Providing the highest yields within the mandate
• Cash Equivalents: Temporary holdings for subscription/redemption management

Unlike corporate money market funds, BIL holds only direct government obligations, eliminating credit risk while maintaining the liquidity profile needed for tactical asset allocation. The portfolio turns over completely every 90 days maximum as bills mature and proceeds reinvest at current market rates.

How It Fits the Portfolio

BIL functions as the "base case" allocation—what you hold when nothing else offers compelling risk-adjusted returns. In the Energy Macro framework, this typically represents 10-30% of the portfolio depending on market conditions and opportunity set availability. During grid stability periods when utility stocks trade at premium valuations, BIL provides competitive income without equity volatility.

The tactical use case centers on regime transitions. When the Federal Reserve signals dovish pivots, BIL becomes the funding source for rotating into real assets that benefit from easier monetary policy. Conversely, when inflation resurges and rate hike cycles resume, BIL offers automatic reinvestment at higher yields without the duration risk that hammers longer-term bonds.

Position sizing should reflect the inverse of real asset opportunity: maximum BIL allocation when infrastructure trades expensive, minimum allocation when energy MLPs offer 8%+ yields with strong coverage ratios.

Regime Signals

BIL outperforms during three distinct macro environments: Federal Reserve tightening cycles, financial market stress, and transition periods between investment themes. The fund benefits from rising short rates while avoiding the capital losses that longer-duration bonds suffer during monetary policy normalization.

Peak performance occurs when short rates exceed long rates (inverted yield curves) and equity volatility spikes above 25%. During the 2022-2023 tightening cycle, BIL delivered steady 4-5% returns while growth stocks declined 30%+ and even defensive REITs struggled. The fund underperforms when rates fall rapidly or when risk assets rally on easy monetary policy, making timing the key variable.

Current conditions favor BIL as long as the Federal Reserve maintains restrictive policy to combat persistent inflation pressures. The 4.13% yield provides attractive real returns if inflation moderates while offering protection against further rate increases that would pressure longer-duration assets.

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Frequently Asked Questions

What is BIL and how does it work?

BIL holds U.S. Treasury bills maturing in 1-3 months, making it essentially a cash equivalent with near-zero interest rate risk and zero credit risk. The fund's yield tracks the Fed Funds rate closely — currently earning approximately 4-5% annualized. BIL is used by investors and institutions as a high-quality parking place for cash that earns the risk-free rate while maintaining daily liquidity.

What is the expense ratio of BIL?

BIL charges just 0.1356% annually. With a portfolio of ultra-short T-bills, the management required is minimal, reflected in the low fee. The net yield to investors is the T-bill rate minus the expense ratio. At current rate levels, BIL provides meaningful income that far exceeds its cost, making it a highly efficient cash management vehicle.

Is BIL better than a money market fund?

BIL and money market funds serve similar purposes but with different structures. BIL trades on an exchange with real-time pricing, holding only U.S. Treasuries with zero credit risk. Money market funds may hold commercial paper, repos, and other instruments with marginally higher yields but slightly more credit risk. BIL's advantage is transparency, exchange-traded convenience, and pure government credit exposure.

How does BIL fit into the Energy Macro framework?

BIL is the dry powder allocation — capital earning the risk-free rate while waiting for deployment into high-conviction positions. When commodity prices correct, miners pull back, or a crisis creates opportunity, BIL provides the liquidity to act decisively. Maintaining 10-20% in BIL during extended markets ensures the portfolio can capitalize on volatility rather than being forced to sell existing positions to fund new ones.

For our complete allocation framework across real assets, infrastructure, and income strategies, see The Blackout Fortune Playbook.

Last updated: February 1, 2026 | Data: Yahoo Finance, State Street filings