2024-02-07 17:02:37 ET
Summary
- Investors hold more than $6 trillion in money market mutual funds, but declining interest rates may force them to seek higher-yield options.
- The Alpha Architect 1-3 Month Box ETF offers a unique tax-favored structure and has already garnered nearly $1 billion in assets.
- BOXX uses a box spread options trading strategy to mirror the payout of ultra short-term Treasury funds, providing tax deferral and potentially lower capital gains tax rates.
- For the right type of investors, BOXX can make a lot of sense compared to owning a money market mutual fund or a short-term Treasury ETF.
Investors continue to stash cash in money market mutual funds. Inflows persist, and the latest ICI report revealed more than $6 trillion of US cash in money market assets. There's an emerging problem, though. Interest rates may soon be on the decline, and investors' hands will be forced to either hide out in lower-yield cash products or take on more risk in the stock or bond market....
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For further details see:
BOXX: A Capital Gains Tax Win