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Post by yogibearbull on Aug 15, 2023 20:00:33 GMT
I have used ICSH for a while & its ER is low. I watch JPST with higher ER. Same for MINT with even higher ER. Just be careful with newer VUSB - it has longer duration among the ultra-ST ETFs. I don't want that even with very low VG ER. ETFdb shows many ultra-ST ETFs.
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Post by racqueteer on Aug 15, 2023 20:06:03 GMT
Thoughts about USFR?
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Post by uncleharley on Aug 15, 2023 20:29:06 GMT
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Post by yogibearbull on Aug 15, 2023 21:36:58 GMT
USFR looks interesting. Invests only in 2-yr Treasury FRNs. Their yield is 3m T-Bill yield (reset weekly) + spread (set at Auction). ER 15 bps for this simple stuff. Was dead money 2020-22. Will watch.
Beware of non-Treasury floating rate funds as most are low-rated/HY.
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Post by anitya on Aug 19, 2023 22:15:56 GMT
I think USFR is better than buying FR 2 yr Treasuries, even at auction. I noticed MM funds' ER, especially for Treasury only MM funds. Vanguard (VUSXX) 0.09%, Fidelity (FDLXX) 0.42%, and Schwab (SNSXX) 0.35%. Both Schwab and Fidelity 7 yield is below 5% and Vanguard is at 5.18%. Seems like one can stay ahead by buying 3 or even 6 month Treasury Bills over these MM funds, even if the Fed raises 2-3 more times in the next 3-6 months. (I generally do not pay attention to ER.) (As an aside, with such high ER on MM funds and the large swell of AUM in these funds, Schwab and Fidelity are making easy money.) yogibearbull , Are you buying USFR? I am debating between USFR, 26 wk auction on Monday or 1 yr Treasuries in two weeks. If liquidity is not essential, why not consider 5-10 year agencies which are generally continuously callable but pay close to 6% coupon vs 2 yr Treasury FR. Fidelity fixed income Rep mentioned there is a 0.1% commission (mark-up) when buying all agency bonds but that turned out not to be true for new issue I bought. I was surprised but their websites confirms (0% commission / mark-up) - see below. Fidelity seems to not charge any fees (mark-up) when buying new issue bonds of any kind, not just new issue Treasuries, but better check with Fidelity for non-Treasuries and non-agency new issue. www.fidelity.com/fixed-income-bonds/FI-common-risk "Investors pay no mark-up when participating in new issue offerings but brokers do levy a mark-up (for buys) or mark-down (for sells) in the secondary market." [Fifth full paragraph.] www.fidelity.com/trading/commissions-margin-rates
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Post by yogibearbull on Aug 19, 2023 23:57:27 GMT
anitya , I got into USFR. It will be my ultra-ST bond for now instead of ICSH. This may change when the fed fund rate outlook changes sometimes in late-2024.
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Post by anitya on Aug 20, 2023 2:42:08 GMT
anitya , I got into USFR. It will be my ultra-ST bond for now instead of ICSH. This may change when the fed fund rate outlook changes sometimes in late-2024. I tried to locate by search of their website the tax supplement document for 2022 to make sure most of its distribution qualifies for state tax exemption. They have a list of documents that go only up to 2019. www.wisdomtree.com/search?target=documents&key=tax%20supplementI am sure they have the later year documents somewhere on their website and as with other large fund companies, they may have become too smart for retail, non-advisor customers and hidden such documents in obscure locations. (If they want to be user friendly, they would provide a link in each fund page.) Please share with us if you are able to unearth the 2022 tax supplement document. Thanks.
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Post by yogibearbull on Aug 20, 2023 11:51:28 GMT
anitya, I couldn't either beyond 2019. I sent them an email via site Contact: "I cannot find report for % from government obligations beyond 2019 Tax Supplement. Were they renamed or consolidated with something else? I am particularly interested in USFR and related state tax exemptions."
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sgra
Lieutenant
Posts: 57
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Post by sgra on Aug 20, 2023 21:33:30 GMT
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Post by anitya on Aug 21, 2023 2:55:34 GMT
yogibearbull , Because USFR is based on an index, it seems the fund could be required to sell some of its constituents at a future date and buy future issues that may have negative spreads. No? Based on the current Fed Fund futures, we can expect 1 more hike, taking the effective Fed Fund rate potentially to 5.33+0.25% (or 5.58%) and let us assume the Fed pauses there for a year. In that scenario, (1) the current 6 mo T bill is better than 1 yr T bill (making a case for buying 26 wk over 52 wk). (2) there is enough cushion in the current USFR yield over Treasury MM fund yields such that a potential negative spread for future 2 Yr FRN issues could still make USFR total return more compelling than MM returns over the next one year (making a case for buying USFR over MM funds). Am I thinking the above correctly?
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Post by yogibearbull on Aug 21, 2023 13:35:21 GMT
anitya , I am still using m-mkt funds and 6-mo T-Bill rolls. My excursion into Treasury FRNs (Auction & USFR) just supplements those. So, I am not doing as deep dive into them. I found enough that attracted me to FRNs, and from now on, I will have my firsthand experiences with those. My thinking is that these will turn out to be better than m-mkt funds, constantly rolling 3-mo T-Bills, or 2-yr T-Note (regular; not that I want those now).
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Post by anitya on Aug 21, 2023 20:17:45 GMT
Today's 26 wk auction results are out. Price was 97.323083 and Investment rate was 5.531%. I was late to my computer this morning (wanted to check rates before I put in the order) and missed the auction deadline and so I ended up buying in the secondary market the 26 wk issued last week. I paid 97.415 for a 5.48% yield. Probably cost $60 for $100,000 face amount for not participating in the auction. I think I will put in the order on Sunday night for next week's auction.
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Post by yogibearbull on Aug 24, 2023 19:28:22 GMT
anitya , I couldn't either beyond 2019. I sent them an email via site Contact: "I cannot find report for % from government obligations beyond 2019 Tax Supplement. Were they renamed or consolidated with something else? I am particularly interested in USFR and related state tax exemptions." Weird. I got an email response today from WisdomTree with attachments (.pdf, .xls) for 2019 Tax Supplements. What is it that those folks didn't understand? I told them that I was looking for the stuff beyond 2019.
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Post by anitya on Aug 25, 2023 14:03:25 GMT
anitya , I couldn't either beyond 2019. I sent them an email via site Contact: "I cannot find report for % from government obligations beyond 2019 Tax Supplement. Were they renamed or consolidated with something else? I am particularly interested in USFR and related state tax exemptions." Weird. I got an email response today from WisdomTree with attachments (.pdf, .xls) for 2019 Tax Supplements. What is it that those folks didn't understand? I told them that I was looking for the stuff beyond 2019. Sorry about that but that is customer service these days. Hopefully, the second try will make the person pay attention.
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Post by anitya on Aug 25, 2023 23:23:51 GMT
yogibearbull, I bought USFR in my IRA (as a substitute for my MM fund). Today was ex-div date. I am holding out from buying in taxable account until we hear back from Wisdomtree about the 2022 tax supplement, though I will be surprised if it did not have more than 90% of its dist exempt from state tax.
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Post by anitya on Aug 26, 2023 18:54:33 GMT
I found the following interesting -
CUSIP 912810SN9 (UNITED STATES TREAS SER BONDS 1.25000% 05/15/2050 BDS) issued on 5/15/2020 is now trading at 51.43%, for a loss of 48.57%. Current YTM is 4.36% for an increase of 3.11% in yield. Granted it was a 30 yr bond when issued but its Duration must have been so lower than 30 yrs (even at 1.25% yield at issue) that it lost only 48% in value for an increase of 3+% in yield.
CUSIP 912828ZQ6 (UNITED STATES TREAS SER C-2030 0.62500% 05/15/2030 NTS NOTE) issued on 5/15/2020 is now trading at 78.48% for a loss of 21.52%. Current YTM is 4.36% for an increase of 3.11% in yield. Draw your own conclusions and use the info as you like. Not a recommendation for increasing or not increasing Duration but it is good to keep in perspective potential gains and losses from investing in Treasury Notes and Bonds.
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sgra
Lieutenant
Posts: 57
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Post by sgra on Aug 28, 2023 19:46:53 GMT
I heard back from Wisdomtree. They attached a 2022 tax supplement report and also sent a link to their Fund Reports and Schedules tab: www.wisdomtree.com/investments/resource-library/fact-sheets-reports#tab-EFFF2124-78F5-46F4-B816-6D4252E4BC97. From there, select Tax Supplement Reports from the lefthand column. Then select WisdomTree Fund Distribution 2022 - Tax Supplement from the list on the right. It's an Excel spreadsheet. On the spreadsheet, select the Secondary Layout tab (at the bottom) to find Column K: % of Income from Exempt Federal Securities. (You can make it easier to find USFR by unchecking Select All and check USFR in column C Ticker Symbols to filter the dropdown list.) The magic number is 99.666489%. Now, isn't that easy!?
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Post by yogibearbull on Aug 28, 2023 19:52:27 GMT
sgra , thanks. I did check that tab before writing to WisdomTree and there was nothing beyond 2019 - I thing the same for anitya. But I see post-2019 stuff NOW. May be somebody woke up there.
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Post by anitya on Aug 28, 2023 20:45:12 GMT
sgra & yogibearbull , I am sure clients that have an RIA or go through an RIA are not going to tolerate the lack of info or fund companies that make it difficult to find their info. As yogibearbull and I discussed in Feb-March, a lot of large fund companies are making it difficult to find the supplemental tax information for non-advised retail customers like us. So, I wonder if the website content for institutional clients and RIAs is different from what we see, just as we are finding out about Vanguard customer service. May be there is an industry push to create more fees based service consumers. I can see incentives for Vanguard, Fidelity, and the like to try to push us to move to a higher fees paying tier. What is in it for WisdomTree, other than sucking up to the institutional customers and RIAs by disadvantaging retail customers. WisdomTree management has to be really stupid or outright colluding with the RIA / Institutional clients to disadvantage retail customers. I do not know what is going on but something does not add up. I do not like big governments but starting to appreciate why Consumer Financial Protection Bureau (CFPB) exists. I think we should start sending complaints to CFPB & SEC and not wait for this phenomenon to get out of control. I am fine to move today's post to a new thread if you guys like. May be title it "Report to SEC & CFPB disadvantaged customer service."
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Post by yogibearbull on Aug 28, 2023 21:11:50 GMT
anitya, sgra, I could access that page from WisdonTree website (so, it's the regular site, not institutional): Resources/Fact Sheet & Reports/Fund Reports & Schedule/Tax Supplement Reports. www.wisdomtree.com/investmentsIt WAS the link that I had checked before and it then had only the Tax Supplements to 2019. But NOW, it is updated. BTW, in its email response to me, WisdomTree didn't even mention the link but sent me 2019 ATTACHMENT in .xls and .pdf formats.
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sgra
Lieutenant
Posts: 57
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Post by sgra on Aug 28, 2023 21:34:11 GMT
When this issue was raised I think I looked for 2022 tax report too and 2019 was the latest I could find. In any event, I bought USFR in one of my brokerage accounts to replace the T-bills as they come due. Easy liquidity and close enough (if not better) returns. If WisdomTree is laggard going forward, I may simply declare 100% U.S. government obligations for state tax reporting.
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Post by yogibearbull on Aug 29, 2023 12:55:13 GMT
Unless I am misreading, WisdomTree Tax Supplements for Treasury FRN USFR show the following % exempt from state/local taxes:
2019 100% (old format) 2020 96.023151% 2021 18.181963% (what happened?) 2022 99.666489%
I can understand something a bit less than 100% due to cash drag.
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Post by anitya on Aug 29, 2023 19:06:59 GMT
Unless I am misreading, WisdomTree Tax Supplements for Treasury FRN USFR show the following % exempt from state/local taxes: 2019 100% (old format) 2020 96.023151% 2021 18.181963% (what happened?) 2022 99.666489% I can understand something a bit less than 100% due to cash drag. After Covid interest rates dropped to the floor. So, USFR earnings were not large enough to exceed its ER in many months in 2021 and it distributed dividends only in Jan & February and capital gains in December. The capital gains were more than 80% of total distribution. There is potential for cap gains hopefully they are small. Jan - 0.000500000 Feb - 0.000300000 Dec - 0.002100000 (ST. Cap gain) Total - 0.002900000 (so negligible that M* performance tab does not show the actual #)
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Post by anitya on Aug 29, 2023 19:55:33 GMT
Yesterday's auction result for 26 wk is 5.59%.
Next auction for 13 wk, 26 wk, and 52 wk is Tuesday, Sept 05. The cut off times are different for each issue.
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Post by yogibearbull on Aug 29, 2023 20:30:42 GMT
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Post by django on Aug 29, 2023 21:59:12 GMT
I guess when you have over $32 trillion in debt obligations, you have to recycle CUSIP#s or would end up with CUSIP#s so long they would take up multiple pages.
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Post by FD1000 on Sept 11, 2023 3:41:02 GMT
Treasuries have the highest correlation to rates, which means you got to predict rates well, and we know that predicting rates is difficult. If I had to own something for months up to now, Bank Loans had a great risk/reward. In that category FAFRX excels. Another choice in another category is RSIIX. The chart below of FAFRX,RSIIX,TLT,BND(US tot bonds) show why FAFRX,RSIIX are so much better, they come with much lower volatility, much better performance, and higher yield. I don't need to wait for these funds to do well, they are doing it for months. Attachments:
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Post by yogibearbull on Sept 11, 2023 12:37:08 GMT
It is noted in the social-media that with 2023 YTD data, it is the 3rd negative year for Treasuries (IEF, TLT), something that have never happened before. So, the speculation is that 2023 will be a turnaround year for Treasuries. This is supported by the fact that corporates (VCIT), total bond (AGG), muni (MUB) have already turned around (positive YTD and 1-yr/except AGG, Edit), and FR/BL are doing well (BKLN; recession seems off the table now). All bonds (being spread products) will benefit more when the Treasuries also turnaround.
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Post by anovice on Sept 11, 2023 13:26:42 GMT
Treasuries have the highest correlation to rates, which means you got to predict rates well, and we know that predicting rates is difficult. If I had to own something for months up to now, Bank Loans had a great risk/reward. In that category FAFRX excels. Another choice in another category is RSIIX. The chart below of FAFRX,RSIIX,TLT,BND(US tot bonds) show why FAFRX,RSIIX are so much better, they come with much lower volatility, much better performance, and higher yield. I don't need to wait for these funds to do well, they are doing it for months. FD1000, what do you mean by "I don't need to wait for these funds to do well, they are doing it for months"? Thank you.
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Post by fishingrod on Sept 11, 2023 13:45:46 GMT
It is noted in the social-media that with 2023 YTD data, it is the 3rd negative year for Treasuries (IEF, TLT), something that have never happened before. So, the speculation is that 2023 will be a turnaround year for Treasuries. This is supported by the fact that corporates (VCIT), total bond (AGG), muni (MUB) have already turned around (positive YTD and 1-yr), and FR/BL are doing well (BKLN; recession seems off the table now). All bonds (being spread products) will benefit more when the Treasuries also turnaround. AGG Total bond is still negative for 1 Yr.
It is down roughly 1%.
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