Don't foot the BIL: VBIL costs less
Consider Vanguard 0–3 Month Treasury Bill ETF for your clients’ ultra-short needs.
What are you using for ultrashort bond ETF exposure?
The ultrashort bond ETF category has rapidly grown due to the rise in interest rates, the growth of the ETF structure, and the lack of compelling yields in many traditional savings vehicles. In fact, the 3-month T-Bill has a yield that’s ten times greater than the average savings account yield.1
The Vanguard 0–3 Month Treasury Bill ETF is a low-cost, ultra-short product designed for high liquidity and low volatility. Here, we compare the largest ETF in the ultrashort Treasuries category: SPDR Bloomberg 1–3 Month TBill ETF (BIL) with Vanguard 0–3 Month Treasury Bill ETF (VBIL).
Three reasons to consider VBIL
Significant savings
After only 11 trading days, the total cost of owning VBIL becomes lower than BIL thanks to its lower expense ratio (7.0 bps versus 13.5 bps), overcoming BIL’s marginally tighter bid/ask spread (1.4 bps versus 1.1 bps).
Designed to lower turnover
VBIL's larger universe of 0–3 months reduces monthly turnover by 17% (50% to 33%). Holding bonds to maturity helps reduce friction and costs incurred from having to sell.
Low switching costs
The ultrashort bond ETF category has a low likelihood of embedded capital gains. The high liquidity of both ETFs (secondary market) and T-bills (primary market) means trade execution costs may be kept low, even with large trades.2
Lower total cost of ownership after 11 days
Sources: Bid/ask spreads, Vanguard calculations using Bloomberg, as of March 31, 2025; expense ratios, Vanguard, as of March 31, 2025.
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VBIL is designed to have a larger maturity range
Notes: Growth represented by the S&P 500 Total Return Index.
Sources: Vanguard calculations based on data provided by Morningstar Direct and Standard & Poor’s®,️ as of March 31, 2025.
Trading efficiency
The ultrashort bond ETF category has a low likelihood of embedded capital gains. The high liquidity of both ETFs (secondary market) and T-bills (primary market) means trade execution costs may be kept low, even with large trades.2
Strong primary and secondary market liquidity
Source: Vanguard, as of March 31, 2025.
Standardized performance of VBIL and BIL
| Return % (NAV) | |||||||||
| ETF | Expense ratio | Year-to-date | 1-year | 3-year | 5-year | 10-year | Since inception | Inception date | |
| Vanguard 0–3 Month Treasury Bill ETF (VBIL) | 0.07% | — | — | — | — | — | — | 2/7/25 | |
| SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) | SPDR Bloomberg 1–3 Month T-Bill ETF (BIL) | 0.14% | 1.01 | 4.91 | 4.18 | 2.46 | 1.72 | 1/1/00 |
| Return % (Price) | ||||||||
| ETF | Expense ratio | Year-to-date | 1-year | 3-year | 5-year | 10-year | Since inception | Inception date |
| Vanguard 0–3 Month Treasury Bill ETF (VBIL) | 0.07% | — | — | — | — | — | — | 2/7/25 |
| SPDR Bloomberg 1–3 Month T-Bill ETF (BIL) | 0.135% | 1.00 | 4.90 | 4.17 | 2.46 | 1.71 | 1.19 | 5/25/07 |
The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will
fluctuate, so investors’ shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at vanguard.com/performance.
Effective July 15, 2024, market price returns are calculated using the official closing price as reported by the ETF’s primary exchange. Prior to July 15, 2024, market price returns were calculated using the midpoint between the bid and ask prices as of the closing time of the New York Stock Exchange (typically 4 p.m., Eastern time). The returns shown do not represent the returns you would receive if you traded shares at other times.
Note: Since historical performance is limited, total returns are currently unavailable.
Sources: Vanguard calculations using Morningtar, Inc.; Vanguard expense ratios, Vanguard, as of March 31, 2025.
ETFs, their benchmarks, and investment strategies
| ETF | Benchmark | Investment objective |
| VBIL | Bloomberg 0–3 Month Treasury Bill ETF | Vanguard 0–3 Month Treasury Bill ETF seeks to track the performance of a market-weighted Treasury index with an ultra-short-term dollar-weighted average maturity. |
| BIL | Bloomberg 1–3 Month U.S. Treasury Bill Index | The SPDR 1–3 Month T-Bill ETF is designed to measure the performance of public obligations of the U.S. Treasury that have a remaining maturity of greater than or equal to 1 month and less than 3 months. |
Source: Morningstar, Inc., as of February 28, 2025.
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Legal notices
1 Morningstar, Inc., as of February 28, 2025. Savings accounts may have characteristics that differentiate them from other products. For example, they may offer overdraft protection, ATM access (immediate access to your money), and other convenience features.
2 For larger trades, call Vanguard’s Capital Markets desk to ensure high-quality execution.
For more information about Vanguard funds, visit advisors.vanguard.com or call 800-997-2798 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.
All investing is subject to risk, including possible loss of principal. Diversification does not ensure a profit or protect against a loss.
Bond funds are subject to interest rate risk, which is the chance bond prices overall will decline because of rising interest rates, and credit risk, which is the chance a bond issuer will fail to pay interest and principal in a timely manner or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline.
U.S. government backing of Treasury or agency securities applies only to the underlying securities and does not prevent shareprice fluctuations. Unlike stocks and bonds, U.S. Treasury bills are guaranteed as to the timely payment of principal and interest.