BIL is beating 87% of bond ETFs, and $8 trillion in cash isn't moving
As seen on the 24/7 Wall St. homepage on September 30, 2026.
Bloomberg's ETF analyst says the $8 trillion parked in money market funds stays put until rates break below 3%, so duration bets keep losing to T-bills.
Cash is the new Bond Allocation.. who needs duration when $BIL is outperforming 87% of bond ETFs this year and 83% over five years. This is why money market funds are inflow machines and have $8t in aum and don't look for any of it to leave until rates get below 3%. via https://t.co/7twya54Xj4
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Bloomberg ETF analyst Eric Balchunas notes that the SPDR Bloomberg 1-3 Month T-Bill ETF is outperforming 87% of bond ETFs so far this year, a sustained indictment of duration risk in a high-rate environment.
The numbers behind money market funds tell the same story at a far larger scale. Those funds now hold $8 trillion in assets under management, and Balchunas is explicit that none of it is leaving until short-term rates fall below 3%. For fixed income managers pitching longer-dated paper, that is a hard ceiling on the demand they can realistically expect.
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As long as sitting in near-cash instruments reliably outperforms the majority of actively managed and passive bond alternatives, the case for accepting duration risk remains weak. Rate levels are what will eventually unlock that $8 trillion.
The threshold Balchunas named, 3% on short-term rates, gives investors a concrete line to watch. Until that level is broken, money market inflows continue and the relative underperformance of most bond ETFs has little structural reason to reverse.
Mentioned: BIL