I think that this is a wise to look at it. Repos have definitely been a tool that's been used liberally in the past. Surprisingly, in a pleasant way, the tax-exempt portion of VUSXX in 2025 was actually 100%! But you could not have known that exact number during the year. Fidelity hasn't published the proportion of USGOs in FDLXX yet.Basically anything other than Treasuries (e.g., government repo, which is a big component of FDRXX) is taxable at the state level.
It's not practical for a retail-oriented MMF to hold only Treasuries. There are some that usually keep the proportion over 90% (FDLXX, e.g.), but the demand for short T-Bills exceeds supply and you end up needing some repo or short-term paper to keep up with retail deposits/redemptions.
Statistics: Posted by Artsdoctor — Wed Jan 28, 2026 12:29 pm — Replies 5 — Views 111