Throwing this out to the group for comment / advice – I keep most of the cash for my trading accounts as follows:
- Vanguard Brokerage Account – Vanguard Federal Money Market Investor (VMFXX)
- Schwab Brokerage Account – Schwab Value Advantage Money Inv (SWVXX) and iShares 0-3 Month Treasury Bond ETF (SGOV)
I was happy collecting 5%+ over the last year from these accounts as I sold cash secured puts and covered calls – juicing my returns for 2024. With the Federal Reserve lowering short-term interest rates, I am trying to find a new Cash Alternative ETF that pays a higher distribution rate going forward. The funds I have reviewed to date include:
- Simplify Treasury Option Income ETF (BUCK)
- NEOS Enhanced Income CA Alt ETF (CSHI)
- iShares Ultra Short-Term Bond Active ETF (ICSH)
- Simplify Enhanced Income ETF (HIGH)
- PIMCO Enhanced Short Maturity Active ETF (MINT)
I am leaning towards BUCK for the following reasons:
- Only holds Treasury Bonds – no commercial paper exposure
- Only sells puts and calls on Treasury Bonds – no stock exposure
- Duration is 0 – 1 year – so little interest rate exposure
Depending on the time frame, each of these funds has performed better or worse, so I have had a tough time making a final decision.
Would appreciate any feedback you are willing to provide on how you park your cash in your Brokerage Accounts – I am looking to continue making at least 5% with as little additional risk as possible.
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