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Started By
Message
IMO, best place to park cash...
Posted on 3/20/23 at 2:00 pm
Posted on 3/20/23 at 2:00 pm
is USFR - an ultra-short, floating rate treasury ETF.
I wasn't overly aware of the Treasury "floating rate note" (FRN) market until somewhat recently, but it solves a lot of problems.
It's liquid
Its duration is basically zero
Its yield is high and constantly re-sets
It avoids the classic "bond fund" problem of constantly rolling, and thus never expiring at maturity (like a physical bond), thus exposing investors to drawdowns.
Right now, it's about 4.75%. For you guys that are leery of bank deposits and/or simply aren't being paid enough by your banks, this is a good option.
Appendix: 100% of the assets are 2-year, FRNs. These reset weekly at the highest clearing yield of the 3-month t-bill auction, so you basically earn actual short-term, money market rates without any of the other headaches. Additionally, FRNs pay a "kicker" of several (~20) basis points to entice demand, so the ETF earns that additional yield also.
Expense ratio of the ETF is like 15bps.
I wasn't overly aware of the Treasury "floating rate note" (FRN) market until somewhat recently, but it solves a lot of problems.
It's liquid
Its duration is basically zero
Its yield is high and constantly re-sets
It avoids the classic "bond fund" problem of constantly rolling, and thus never expiring at maturity (like a physical bond), thus exposing investors to drawdowns.
Right now, it's about 4.75%. For you guys that are leery of bank deposits and/or simply aren't being paid enough by your banks, this is a good option.
Appendix: 100% of the assets are 2-year, FRNs. These reset weekly at the highest clearing yield of the 3-month t-bill auction, so you basically earn actual short-term, money market rates without any of the other headaches. Additionally, FRNs pay a "kicker" of several (~20) basis points to entice demand, so the ETF earns that additional yield also.
Expense ratio of the ETF is like 15bps.
This post was edited on 5/31/23 at 6:04 pm
14
Posted on 3/20/23 at 2:54 pm to Big Scrub TX
Why would you want a floating rate when rates are likely to start heading back down?
Posted on 3/20/23 at 3:02 pm to Big Scrub TX
There are multiple HY savings accounts available with 4% rates. No fees and can move whenever. Seems like the easiest IMO. Especially if you are under 250k.
Posted on 3/20/23 at 3:31 pm to Big Scrub TX
...or park it in a MM paying 4.3%.
Posted on 3/20/23 at 8:50 pm to Big Scrub TX
I'm about to do wife's (do i have to say "no pics" on MT?) and my max IRA and SEP IRA contributions.
I assume I can buy USFR in our TD Amtd IRAs. I tried to figure out what the mm rates were for cash positions at TD, but couldn't find it. I just want to stay in cash for new contributions right now. So this could be a good option. thx
I assume I can buy USFR in our TD Amtd IRAs. I tried to figure out what the mm rates were for cash positions at TD, but couldn't find it. I just want to stay in cash for new contributions right now. So this could be a good option. thx
Posted on 4/11/23 at 6:24 pm to Big Scrub TX
100% in agreement with your post as it’s exactly what I have done with my wealth.
I’m in the market still with disposable cash but it’s not doing well.
My metals of which I own tangible amounts are solid at this point in and out of the country but, with the new laws on the books in place now, both are not safe from seizures in catastrophic events by our government.
Just have to live with that.
I’m in the market still with disposable cash but it’s not doing well.
My metals of which I own tangible amounts are solid at this point in and out of the country but, with the new laws on the books in place now, both are not safe from seizures in catastrophic events by our government.
Just have to live with that.
Posted on 4/17/23 at 6:43 pm to Big Scrub TX
Can you help me understand this more? Are the earnings derived only from the monthly dividend? I’m not familiar with these treasury-based etfs.
Posted on 4/17/23 at 8:13 pm to Big Scrub TX
Why not just buy treasuries
3 month was 5.10 today
3 month was 5.10 today
Posted on 4/18/23 at 6:19 am to Big Scrub TX
Those are basically packaged treasuries and are better than CDs.
One word of caution—the interest paid by an ETF is not going to be exempt from Louisiana income tax like buying a treasury would be. You can buy treasuries through your broker and they are very liquid.
One word of caution—the interest paid by an ETF is not going to be exempt from Louisiana income tax like buying a treasury would be. You can buy treasuries through your broker and they are very liquid.
Posted on 5/1/23 at 12:59 pm to Big Scrub TX
Apple Card savings account 4.15%
Posted on 12/5/23 at 12:36 pm to Big Scrub TX
bump, as this is still the superior option for cash, IMO
Posted on 12/6/23 at 2:50 am to Big Scrub TX
A Robinhood Gold account will pay 5% APY on all univested cash. That's as liquid as it gets. FDIC insured up to $2.25m. Gold account costs a $5/month fee.
Posted on 4/26/24 at 6:52 am to Big Scrub TX
So, a money market account? 
Posted on 4/26/24 at 6:50 pm to Big Scrub TX
6 month CD
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