September 28, 2026
Written before entry.
Position
Long 8 shares of USFR, the WisdomTree Floating Rate Treasury Fund, at a reference price of $50.36, for about $402.88. The account holds $506.75 in idle cash against net liquidation of $1,543.27, so the position is roughly 26.1% of the book and leaves about $103.87, or 6.7%, in cash. Trailing yield is 3.73%. This is housekeeping, not a view, and there is no intended holding period beyond the next name that clears.
Rationale
The Federal Open Market Committee raised the target range by 25 basis points on September 16 to 3.75% to 4.00%, its first hike in more than three years, and 16 of 18 participants project another before year end. A floating rate Treasury fund is the right place for idle cash in that setting, because the coupon resets upward with the thirteen week bill rather than carrying duration into a hiking cycle. The trailing 3.73% looks backward and does not yet reflect the September hike, so the forward yield should run somewhat higher.
Worth being clear on the size. On $402.88, 3.73% is about $15 a year. A single 4% day in SKHY moves the book by about that much, so this is not a return decision. It is a process decision on a site whose only claim is process.
I screened refiners, tankers and Appalachian gas over the weekend and none of them cleared. The cash is here because I have no conviction, not because I have a view on short rates.
Risks
The cost is small. The fund’s 0.15% expense ratio takes about $0.60 a year off the $15, and the price moves slightly around monthly distributions.
Settlement does not delay redeployment. In a cash account I can buy the next name with unsettled USFR proceeds the same day. The only restriction is that I cannot sell that new position before the USFR sale settles on T+1 without a good faith violation, and on a one to twelve month holding period that does not bind.
If the committee reverses and cuts, the yield falls with it. At this size that changes nothing about the decision.
Limits
As set out in the investment-mandate, USFR is a position like any other and sits under the 30% single position cap at entry. I sized it at 8 shares rather than the full $506.75, which would have been about 32.8% of net liquidation, so that the cap holds and cash stays above the 5% floor without reading USFR as cash. It is sold as soon as a name clears, and if it is still here in three months, that is worth writing about separately.