BIL, the SPDR exchange traded fund that duplicates the return of 1 to 3 month maturity Treasury bills, is a very good money market fund substitute if you can accept some limitations. As you can see from this Yahoo finance summary, http://finance.yahoo.com/q/pr?s=BIL , it has a current yield of 3.21 percent which is a lot better than most money market funds. One reason for this is its low expense ratio, only 0.14 percent, which is a fraction of the ER for most money market funds.
The limit of BIL, however, is that you have to pay a commission to buy or sell shares. So the larger your portfolio, the greater the odds that you can use BIL as a substitute MMF. If you've got $1 million at Schwab, for instance, your commission rate will be $8.95 which means you can do, say, a $50,000 transaction for only 2 basis points. Reduce the transaction to $5,000, however, and the one-way cost will be 18 basis points. That's still not unreasonable, but the bigger the transactions, the better it will work out for you.
Scott
