ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. A Floating Rate Treasury ETF for Safer Rate Capture
News
Share

A Floating Rate Treasury ETF for Safer Rate Capture

Max ChenMar 13, 2019
2019-03-13

While the Federal Reserve has eased off the pedal on interest rate hikes, investors are still looking into alternative bond ETF strategies, like those that track floating rate notes, ahead any further tightening.

For example, the WisdomTree Bloomberg Floating Rate Treasury Fund (USFR B-), which follows the Bloomberg U.S. Treasury Floating Rate Bond Index, focuses on floating rate notes. Instead of paying a fixed rate of interest like other Treasuries, floating rate note coupon payments are based on a reference rate (90-day t-bills) plus a spread. Since 90-day bills are auctioned every week, the effective duration of floating rate notes is one week, which allows investors to capture higher rates of income as short-term rates rise. This also provides an opportunity for investors to boost income as the Federal Reserve hikes interest rates.

Even without a rate hike, the flat or inverted yield curve in today’s market may allow investors to generate attractive yields with something like a floating rate bond ETF without being exposed to duration risk. USFR shows a 2.33% 30-day SEC yield and a 0.02 year effective duration.

USFR “is the fastest rate-capturing instrument out there. And actually, it became so popular last year that at the beginning of the year, we were at a million dollars. By the end of the year, we were at a billion. And into the new year as the Fed taken its foot off the gas a little bit, people are, investors are still looking for a more safer rate capture instrument and we are already at 2 billion,” Anita Rausch, Head of Capital Markets for WisdomTree, said at Inside ETFs.

USFR has accumulated $2.3 billion in assets under management. The ETF attracted $1.2 billion over 2018 and brought in another $1.1 billion so far this year.

Watch the full interview between Tom Lydon and Anita Rausch here:


Content continues below advertisement

For more ETF-related commentary from Tom Lydon and other industry experts, visit our video category on ETF Trends.

» Popular Pages

  • Tickers
  • Articles

Feb 03

Impressive First ETF Year From Capital Group

Feb 03

3 Long-Term Trends Boost Outlook for These ETFs

Feb 03

Famous Investor Says Bitcoin Has $1 Million Potential

Feb 03

3D Printing ETF PRNT Accesses $500 Billion Opportunity

Feb 03

Parent S&P 500 Beaten by Equal Weight in January

Feb 03

This ETF May Be Propelled by Sustainable Bond Issuance

Feb 02

A Value Manager’s Perspective on an Early Pivot

Feb 02

The Metaverse

Feb 02

ETF of the Week: Invesco S&P 500® Equal Weight ETF

Feb 02

Stepping Into the ETF Business? Think Twice

QQQ

Invesco QQQ Trust

SPY

SPDR S&P 500 ETF Trust

VOO

Vanguard S&P 500 ETF

VGT

Vanguard Information...

SMH

VanEck Semiconductor ETF

XLK

Technology Select Sector SPDR...

VTI

Vanguard Total Stock Market...

SOXX

iShares Semiconductor ETF

BLOK

Amplify Transformational Data...

META

Roundhill Ball Metaverse ETF


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X