What are floating rate bonds?

Floating rate bonds have coupon rates that adjust periodically based on a reference rate. This helps mitigate interest rate risk compared to fixed-rate bonds. As rates rise, the bond’s coupon increases; as rates fall, it decreases. This mechanism offers income stability and protection against inflation, though it may not benefit investors seeking high returns from static high-yield situations.

What is an expense ratio?

An expense ratio is an annual fee charged by a fund to cover operational costs. Both TFLO and USFR have an expense ratio of 0.15%. This means for every £1,000 invested, £1.50 is deducted annually as a fee. Over time, even small differences in expense ratios can significantly impact net returns, making lower-cost funds more attractive for long-term investors.

What does 'net assets' mean for ETFs?

Net assets refer to the total value of assets owned by a fund after deducting any liabilities. For ETFs like TFLO ($6.9 billion) and USFR ($19.6 billion), higher net assets generally indicate greater liquidity and trading volume, potentially reducing bid-ask spreads. This also suggests wider institutional acceptance and stability within market conditions.

Are these ETFs good for conservative income strategies?

Yes, both TFLO and USFR can serve conservative income strategies due to their focus on ultra-short-duration bonds and stable yields. Their ability to provide regular dividends makes them appealing for investors seeking lower volatility than traditional equity markets. They offer potential benefits from rising interest rates, although they do involve credit and liquidity risks.

How does dividend yield impact investment decisions?

Dividend yield, which is 3.74% for both TFLO and USFR, reflects the annual income relative to the price of the ETF. Higher yields often attract income-focused investors looking for regular payouts. However, yield alone shouldn’t dictate decisions. Other factors like fund stability, fees, and overall economic conditions should be considered alongside yields.

Which fund has better liquidity?

USFR, with $19.6 billion in net assets, generally offers superior liquidity compared to TFLO, which has $6.9 billion. Larger funds usually have higher trading volumes, leading to tighter bid-ask spreads and easier execution of trades. Investors looking for less transaction friction might prefer USFR, assuming all other factors are equal.

What is the primary difference between TFLO and USFR?

The primary difference is that USFR includes a disclosed holding of 0.53% in NCA while TFLO does not provide specific top holdings. However, their overall financial profiles are nearly identical, sharing the same expense ratio of 0.15%, dividend yield of 3.74%, and inception in early 2014. Differences mainly emerge in portfolio composition transparency.

What role does the underlying index play?

The underlying index provides a benchmark for tracking performance. Unfortunately, neither TFLO nor USFR specifies the index they track. This lack of transparency could affect investors’ ability to assess how each fund reflects broader market conditions. Indices typically serve as guidelines for asset allocation, and their absence might require deeper research.

How do the funds compare in terms of sector exposure?

The specific sector weights for TFLO and USFR are not publicly disclosed, making it hard to understand their precise exposure to different economic sectors. Without this information, investors cannot gauge how much each fund might be exposed to certain risks or benefits associated with particular sectors. This is crucial for those managing diversified portfolios.

Are these funds suitable during rising interest rates?

Yes, floating rate funds like TFLO and USFR are generally well-suited for rising interest rate environments. Because their coupons adjust, they can increase payouts in response to rate hikes. This provides a natural hedge against fixed-rate bond losses when interest rates climb, making them more resilient than traditional fixed-income investments.

Is there a difference in minimum investment?

Typically, ETFs like TFLO and USFR allow investors to buy as little as one share, subject to the share price. There is no specific minimum investment requirement listed here. Investors should check individual brokerage fees, which might impose practical constraints on small purchases despite the absence of a formal minimum investment threshold.

What should investors know about historical data?

Both TFLO and USFR launched in early 2014, providing over a decade of performance data. This extensive history allows for robust comparisons and understanding how these funds have behaved across various market conditions. However, past performance does not guarantee future results, so historical data should inform rather than dictate investment choices.

TFLO vs USFR

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare TFLO and USFR. Both floating rate Treasury funds have a 0.15% expense ratio and 3.74% dividend yield. See how each tracks its market and review holdings and fees. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

TFLO

Metric

USFR

0.15%

Expense Ratio

0.15%

3.74%

Dividend Yield

3.74%

$6.90B

Net Assets

$19.62B

Holdings

Feb 3, 2014

Inception Date

Feb 4, 2014

–

Index Tracked

–

Ultrashort Bond

Fund Category

Ultrashort Bond

Both funds charge the same annual fee.

Shared Top Holdings

These funds do not share any of their top holdings.

Discover More Comparisons

SGOV vs USFR

Compare SGOV and USFR ETFs. Review the 0.09% and 0.15% expense ratios, yields, net assets, dividend data, holdings transparency, and tracking details.

Investment Analysis

TFLO

Pros

TFLO offers a low annual expense ratio of 0.15%, which helps preserve investor returns over time.
The fund maintains a consistent dividend yield of 3.74%, providing regular income to investors.
With net assets of $6.9 billion, TFLO benefits from sufficient scale and liquidity for trading purposes.

Considerations

TFLO's specific top holdings and sector weights are not available, limiting transparency into the portfolio.
The fund's inception in 2014 means a shorter track record compared to some other fixed-income products.
Investors cannot easily assess concentration risk due to the lack of publicly available holdings data.

USFR

Pros

USFR also features a low expense ratio of 0.15%, making it cost-effective for income investors.
The fund has a substantial net asset base of $19.6 billion, ensuring strong trading liquidity.
USFR maintains a 3.74% dividend yield, comparable to TFLO, offering similar income potential.

Considerations

USFR's index tracked is not available, making it difficult to understand its underlying methodology.
The fund's sector weights are undisclosed, leaving investors uninformed about the portfolio's risk profile.
USFR lacks a full breakdown of top holdings beyond NCA, hindering comprehensive concentration analysis.

About TFLO and USFR

TFLO (TFLO)

The iShares Treasury Floating Rate Bond ETF (TFLO) is an exchange-traded fund designed to provide exposure to U.S. Treasury floating rate notes. As an ultrashort bond category fund, it seeks to track the performance of an index composed of Treasury securities with interest rates that reset periodically, typically every three months. With a modest expense ratio of 0.15%, the fund holds a concentrated portfolio of approximately 10 holdings, reflecting the specific nature of its underlying securities. It reported net assets of USD 6.90 billion and a dividend yield of 3.74% as of recent data. Investors might consider this fund for its potential to offer income that adjusts with prevailing short-term interest rates, potentially providing some protection against rate volatility compared to fixed-rate bonds. However, remember that capital values and income distributions can fluctuate, and returns are not guaranteed. It is generally suited for those seeking short-term liquidity and income exposure within the government bond market, subject to appropriate risk tolerance and suitability assessment.

USFR (USFR)

The WisdomTree Floating Rate Treasury Fund (USFR) is an exchange-traded fund designed to offer exposure to a basket of U.S. Treasury securities with floating rates. This structure aims to provide income that adjusts with prevailing short-term interest rates, making it potentially attractive when rates are rising or volatile. With a low expense ratio of 0.15% and net assets exceeding USD 19 billion, it is a significant player in the ultrashort bond category. The fund holds just six types of securities, focusing on high-quality, government-backed instruments. While the dividend yield stands at 3.74%, investors should remember that capital values can fluctuate, and returns are not guaranteed. It serves as a defensive tool in a portfolio, balancing yield against the risk of interest rate changes. However, it does not protect against inflation beyond current rates.

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TFLO vs USFR

Fund Snapshot

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SGOV vs USFR

Investment Analysis

TFLO

Pros

Considerations

USFR

Pros

Considerations

About TFLO and USFR

Buy TFLO or USFR in Nemo

Zero Commission

Trusted & Regulated

6% Interest on Cash

Frequently asked questions

What are floating rate bonds?

What is an expense ratio?

What does 'net assets' mean for ETFs?

Are these ETFs good for conservative income strategies?

How does dividend yield impact investment decisions?

Which fund has better liquidity?

What is the primary difference between TFLO and USFR?

What role does the underlying index play?

How do the funds compare in terms of sector exposure?

Are these funds suitable during rising interest rates?

Is there a difference in minimum investment?

What should investors know about historical data?

Fund Snapshot

About TFLO and USFR

Discover More Comparisons

SGOV vs USFR