WisdomTree Floating Rate Treasury Fund (USFR)

What the fund owns and how it works

USFR seeks to track the Bloomberg U.S. Treasury Floating Rate Bond Index. Its portfolio centers on U.S. Treasury floating-rate notes, securities initially issued with two-year maturities. The Treasury resets each note's interest rate weekly using the most recent 13-week Treasury bill auction rate plus a fixed spread established when that note was issued. The spread does not reset, while the reference component does.

This design lets coupon income adjust relatively quickly when short-term auction rates change. The notes themselves have longer final maturities than the bills used as their reference. USFR therefore owns floating-rate notes rather than a ladder of 13-week bills. The fund distributes income under its policies and deducts its operating expenses.

Why readers compare or use it

Readers compare USFR with SGOV because both are Treasury-backed, cash-adjacent exchange-traded products whose income responds to short-term rates. The mechanism is the useful dividing line. SGOV earns returns from very short fixed-rate bills that mature and are replaced. USFR receives resetting coupons on outstanding floating-rate notes and turns over securities under its benchmark rules.

The reset process tends to limit duration compared with fixed-rate notes of similar final maturity. It does not lock in a particular future income rate. If the reference auction rate declines, subsequent coupons generally adjust downward after the applicable reset.

Trade-offs to understand

USFR is an ETF, not an insured deposit. Its shares trade in the secondary market, can differ from net asset value, and have no fixed shareholder redemption date. A spread, premium or discount, expenses, and brokerage terms can affect realized results. Treasury credit support applies to the notes, not to a guarantee of the ETF share price.

Floating-rate notes can still move in price because of changing rate expectations, the fixed spread assigned at auction, accrued income, supply, liquidity, and market conditions. Low reported duration is a dated portfolio measure rather than a promise of stable value. Yield labels also require care: SEC yield, distribution yield, and a note's current coupon answer different questions.

Closest alternatives

SGOV holds fixed-rate Treasury bills with no more than three months remaining under its index rules. Direct Treasury floating-rate notes give an owner a defined maturity but require auction or secondary-market access and reinvestment choices. Government money market funds use another regulatory structure. Longer fixed-rate Treasury funds accept substantially more sensitivity to changes in yields.

What can change

Treasury auction results alter the reference rate used for future weekly resets. Bloomberg can revise index eligibility, weighting, and rebalancing rules. WisdomTree can update the fee and operating terms through current disclosures. Holding count, yield, duration, distribution, assets, and trading spread are dynamic. Each current value appears in the issuer's materials with its own label and date, and figures repeated elsewhere can be stale.

Evidence and links

Primary evidence: the official WisdomTree USFR page and current prospectus, Bloomberg U.S. Treasury Floating Rate Bond Index materials, and U.S. Treasury floating-rate note guidance.

Editorial sources

• Benchmark source
• Supporting source
• Supporting source
• Supporting source
• SEC ETF glossary
• Issuer page
• Fund documents

Related reading

• AGG
• BND
• HYG
• LQD
• SCHD
• SGOV
• TIP
• TLT
• VIG
• VTV
• Expense ratio
• Inflation
• Liquidity
• Net asset value NAV
• Dividend
• How treasury bills work
• Market index
• What is a bond
• What is an ETF
• What is an index fund
• Yield