WisdomTree Floating Rate Treasury Fund

USFR

Valor de mercado US$ 20,8 bi

Rising rates are grinding through bond portfolios, but one corner of the Treasury market resets its coupon every single week. Whether that mechanism actually beats owning plain T-bills depends on a timing question most investors never think to ask.

Most bond investors know rising rates hurt their portfolios, but a corner of the Treasury market is structured to do the opposite. The question is whether this overlooked instrument actually delivers on that promise when it matters most.

Following the Federal Reserve's highly anticipated September meeting, which saw the central bank raise rates by 25 basis points, fixed-income investors are once again reassessing their portfolios. The central bank is navigating a complex macroeconomic backdrop that features persistent inflation, rising government debt and mounting geopolitical tensions, among other issues.

Markets have dealt with serious whiplash from the Federal Reserve's dramatic policy pivot this year. In just six months, the Fed funds futures market went from pricing in two rate cuts totaling 50 basis points to now pricing in two rate hikes in 2026.

FLOT looks like a cash substitute with a floating yield, but nearly half its portfolio hides a concentration risk that most investors scanning the headline number never think to check.

Most financial plans assume the person who built them will always be around to run them. Three ETFs exist specifically for the moment that assumption stops being true.

The fund marketed as your portfolio's safety net turned a bad year into a loss most retirees still haven't recovered from, and the reason it failed points directly toward three replacements built to hold up when rates move against you.

Floating rate treasuries are incredibly similar securities to treasuries, but tend to trade at a positive spread to these. Spreads declined to 0.05% last month, an almost inconsequential amount. USFR invests in these securities, and does not currently generate more in income than most t-bill ETFs.

Stocks continue racing to record highs, but the bond market faces considerable uncertainty as fixed income traders grapple with unclear policy signals from the Federal Reserve. That situation was heightened last month when new Fed Chairman Kevin Warsh participated in a press conference that didn't allay fears about a potential rate hike.

You signed the papers, handed over the keys, and watched the wire hit your account.