Portfolio Manager Scales Back Treasury Bills But Maintains Short-Term Cash Buffer

In late January, Colorado-based Jim Saulnier & Associates made a strategic adjustment to its cash positioning by reducing its allocation to the Vanguard 0-3 Month Treasury Bill ETF—a move that signals a refined approach to short-term liquidity management rather than a wholesale retreat from cash alternatives.

The Transaction: $5.8 Million Reduction in Short-Term Instruments

On January 29, the firm disclosed that it had offloaded 77,109 shares of VBIL during the fourth quarter. The estimated value of this transaction reached $5.82 million, calculated using the average quarterly closing price. When accounting for both the share reduction and price fluctuations, the overall position decline totaled $5.86 million.

Despite this trimming, Jim Saulnier & Associates maintained a meaningful treasury bills holding. As of December 31, the fund continued to hold 141,880 shares valued at approximately $10.70 million. This remaining stake represents 5.55% of the fund’s total reportable assets under management (AUM) of $192.93 million.

How Treasury Bills Factor Into the Fund’s Structure

The portfolio’s positioning reveals a clear investment philosophy. The fund’s top holdings include three core positions:

• AOR (iShares Growth Allocation ETF): $25.49 million (13.2% of AUM)
• AOA (iShares Aggressive Allocation ETF): $17.19 million (8.9% of AUM)
• VBIL (Vanguard 0-3 Month Treasury Bill ETF): $10.70 million (5.6% of AUM)

The allocation to treasury bills sits comfortably below the top holdings but represents a substantial buffer. This positioning underscores the fund’s strategy of anchoring the portfolio with growth and balanced exposure while maintaining a defensive cash layer.

Why Treasury Bills Remain Essential for Capital Preservation

At the time of the filing, VBIL shares traded at $75.62, with a 30-day SEC yield of 3.56%. The ETF tracks ultra-short-duration U.S. government securities with maturities of three months or less, offering several key benefits:

Low Risk Profile: Treasury bills carry virtually no credit risk, backed by the full faith and credit of the U.S. government.

Expense Efficiency: With a 0.06% expense ratio, the fund charges minimal fees, allowing investors to capture yields without meaningful drag.

Capital Preservation: The focus on 0-3 month maturities ensures minimal price volatility, making it an ideal vehicle for investors prioritizing stability over growth.

Liquidity Advantage: The fund provides easy entry and exit, essential for portfolio managers who may need to deploy or park capital quickly.

Over the past year, VBIL demonstrated the hallmark of a stable cash vehicle, with price movements barely registering on investor radar screens. The 3.56% SEC yield offered at the time of the filing reflected prevailing short-term interest rates while maintaining the safety of government-backed securities.

What This Rebalancing Means for Diversified Portfolios

The reduction by Jim Saulnier & Associates illustrates a nuanced perspective on cash management. Rather than chasing yields or abandoning short-term instruments entirely, the firm acknowledged a simple reality: uninvested capital and excess cash positions carry an opportunity cost.

The adjustment represents portfolio optimization—acknowledging that while cash alternatives like treasury bills serve a critical defensive role, excessive allocations can drag on returns in a diversified strategy. By trimming the position while maintaining a 5% cushion in liquid, low-duration securities, the fund preserved flexibility without sacrificing growth potential.

The broader portfolio structure—anchored by balanced and growth-oriented allocation funds with meaningful global equity exposure—ensures that the reduction in treasury bills does not compromise the overall risk management framework. In fact, it reflects confidence in the diversified equity positioning while maintaining strategic dry powder.

Key Takeaways for Investors Seeking Stable Cash Positions

For retail and institutional investors evaluating their own cash allocations, Jim Saulnier & Associates’ decision offers several lessons:

Treasury Bills as Anchors, Not Alternatives: Short-term government securities like those held in VBIL serve as portfolio anchors during volatility, not as permanent cash parking solutions.

Right-Sizing Cash Allocations: Even modest reductions—from higher percentages to mid-single-digit allocations—can meaningfully improve risk-adjusted returns without sacrificing financial flexibility.

Quality Over Convenience: A 3.56% yield on government-backed treasury bills, even after fees, compares favorably to money market accounts or savings vehicles, rewarding disciplined investors who prioritize safety alongside returns.

Balancing Act: Treasury bills thrive when integrated into a broader, diversified strategy rather than treated as standalone investments. They excel at what they do—preserving capital and providing liquidity—but shouldn’t dominate portfolios.

The move by Jim Saulnier & Associates ultimately reflects a philosophy that cash is not abandoned or hoarded, but rather sized to the portfolio’s specific needs. Treasury bills remain a reliable vehicle for that purpose, especially in uncertain interest rate environments where capital preservation matters as much as yield capture.