CDs & ETFs: A Modest Proposal

People put money in Certificates of Deposit, you know. For safety. As if a piece of paper can truly shield you from the inevitable entropy of things. They lock it up, hoping for a little growth, a little predictability. It’s… touching, really. So it goes.

The banks offer about 1.5%, maybe 1.6%, these days. A pittance. Enough to maybe offset the rising cost of regret. They’ll tell you it’s safe. And technically, it is. Safe from a lot of things. Not safe from time, or inflation, or the general absurdity of existence. But insured. That’s something.

Now, these Exchange Traded Funds – ETFs – they offer a different kind of promise. A little more juice, up to 4% or so. No FDIC insurance, of course. But honestly, what is insured these days? The illusion of control, maybe. You get access to your money when you need it, which is a small victory in a world determined to take things away from you.

These ETFs aren’t without their quirks. The price can wiggle around a bit. A little dance of numbers. But usually, the income offsets any temporary dips. It’s not a guarantee, mind you. Nothing is. But it’s a better bet than leaving your money to gather dust, slowly being eaten by the moths of inflation.

1. iShares 0-1 Year Treasury Bond ETF

The iShares 0-1 Year Treasury Bond ETF (SHV +0.01%) is about as close to a sure thing as you’re going to get. Backed by the U.S. government, which, let’s be honest, is a bit like being backed by a very large, slightly unstable friend. It’s yielded around 3.5% lately. Not a fortune, but enough to buy a decent cup of coffee. Or a small measure of peace of mind.

It barely wobbles. During the madness of 2021-2022, when the Fed was playing with interest rates like a distracted child, it only lost 0.4%. A tiny scratch on the face of eternity. It’s the kind of stability that makes you wonder what terrible thing is just around the corner. So it goes.

2. WisdomTree Floating Rate Treasury ETF

The WisdomTree Floating Rate Treasury ETF (USFR 0.01%) is similar. It invests in short-term Treasury notes where the rate adjusts. A bit like trying to steer a boat in a constantly shifting current. It yields around 3.6%. Again, not enough to retire on, but enough to avoid complete despair.

The rates reset regularly, so it’s less sensitive to interest rate changes. Which is good, because interest rates are notoriously fickle. Like a lover who’s always threatening to leave. The U.S. Treasury backing it means the credit risk is virtually zero. Which is a comforting thought, even if it’s ultimately meaningless in the grand scheme of things.

3. Janus Henderson AAA CLO ETF

The Janus Henderson AAA CLO ETF (JAAA +0.02%) is a bit of an outlier. It yields around 4.8%. A tempting number. But it invests in Collateralized Loan Obligations – CLOs – which are essentially baskets of loans. Loans made to people who are already a little bit behind. But these are the highest-rated loans, so the risk is supposedly minimal. So it goes.

CLOs are a little less liquid than traditional bonds. Which means they can be harder to sell when things go south. Investors demand a higher yield to compensate for that risk. It’s a simple equation, really. Fear plus greed equals profit. Or, more often, loss. But that’s life, isn’t it? A constant gamble.

These ETFs aren’t a magic bullet. They won’t solve all your problems. But they offer a slightly better return than a CD, with a little more flexibility. And in a world that’s increasingly unpredictable, a little bit of flexibility can be a very valuable thing. Or, at least, a marginally less terrible thing. So it goes.

2026-02-25 15:22

1. iShares 0-1 Year Treasury Bond ETF

2. WisdomTree Floating Rate Treasury ETF

3. Janus Henderson AAA CLO ETF

Read More