WisdomTree Floating Rate Treasury Fund
USFRUSFR is an exchange-traded fund that invests in ultra-short-term US Treasury securities, operating within the fixed income market.
It is designed to provide investors with high liquidity and current income while seeking to minimize interest rate risk.
Updated: February 19, 2026, 16:00 EST
Investment Opinion: Should I buy USFR Today?
Based on the provided analysis, here is a comprehensive assessment of USFR.
Analysis Summary
USFR functions as a highly stable, cash-equivalent instrument designed for capital preservation rather than market-beating growth. Its technical profile reflects this, showing minimal price volatility and trading in an exceptionally tight range. As a fund holding short-term US Treasury floating rate notes, traditional corporate fundamental and equity valuation metrics do not apply; its attractiveness is instead determined by its yield relative to other low-risk, short-duration alternatives. The primary risks are minimal, centered on the underlying US government credit risk, which is considered the lowest available, and interest rate changes, which are partially mitigated by the floating rate structure.
Recommendation
USFR is a strong BUY for investors seeking a low-risk parking vehicle for cash or a defensive anchor in a portfolio. It offers superior liquidity and a competitive yield compared to traditional money market funds, with negligible volatility and high credit quality. The fund is particularly attractive in a rising or uncertain interest rate environment due to its floating rate feature, providing a safe way to earn income while waiting for other investment opportunities. This recommendation is suitable for capital preservation objectives, not for investors seeking capital appreciation.
USFR 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Based on a comprehensive analysis, here is a 12-month outlook for USFR.
12-Month Outlook for USFR
The 12-month outlook for USFR is highly stable and bullish for its specific objective of capital preservation and income. The key catalyst is the expectation that the Federal Reserve will maintain a higher-for-longer interest rate policy, allowing the fund's floating rate notes to continue generating a competitive, risk-free yield. The primary risk remains minimal, confined to an unforeseen, rapid easing cycle by the Fed that would cause the fund's yield to decline, though the capital preservation aspect would remain intact. Given its structure, analyst target prices are not applicable; the fund's price is expected to remain tightly range-bound around its $50 net asset value, with total return driven almost entirely by the accumulated dividend yield over the period.
Wall Street Consensus
Most Wall Street analysts are optimistic about WisdomTree Floating Rate Treasury Fund's 12-month outlook, with consensus target around $50.43, indicating expected upside potential.
Bulls vs Bears: USFR Investment Factors
Overall, USFR has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Competitive Yield Advantage: USFR offers a ~3.7% forward yield, higher than traditional T-bill funds.
- Low-Risk Treasury Exposure: Invests in floating-rate Treasury notes, providing T-bill-like risk and volatility.
- Hedge Against Rate Volatility: Floating-rate structure protects investors during interest rate uncertainty.
- Strong Track Record: ETF maintains a buy rating for its consistent performance and low volatility.
Bearish
- Significant Fund Outflow: Recent week-over-week data shows a big outflow from the ETF.
- Interest Rate Sensitivity: Yield advantage may diminish if short-term rates fall or stabilize.
- Investor Sentiment Shift: Other treasury ETFs like VGIT saw large liquidations, indicating sector caution.
USFR Technical Analysis
USFR has demonstrated exceptional stability with negligible price movements over the observed periods, functioning more as a cash-equivalent instrument than a volatile security.
The ETF's short-term performance is remarkably flat, with virtually no change over one month and a minimal 0.2% gain over three months, slightly underperforming the broader market by 1.65% during this period despite its non-correlated nature as indicated by the negative beta. This performance aligns with its design as a low-volatility, short-term Treasury fund prioritizing capital preservation over market outperformance.
Currently trading near the midpoint of its exceptionally tight 52-week range between $50.23 and $50.50, USFR appears fairly valued rather than overbought or oversold, reflecting the stable nature of floating rate Treasury securities where price movements are constrained by interest rate reset mechanisms.
| Period | USFR Return | S&P 500 |
|---|---|---|
| 1m | +0.0% | +1.0% |
| 3m | +0.2% | +1.9% |
| 6m | +0.1% | +6.5% |
| 1y | -0.1% | +12.1% |
| ytd | +0.2% | +0.2% |
USFR Fundamental Analysis
Based on the information provided, no fundamental analysis can be conducted for USFR.
USFR is an ETF that tracks short-term Treasury floating rate notes, not a traditional operating company with revenue, profitability, or debt. It does not have standard corporate financial statements or ratios like profit margins or ROE.
The appropriate analysis would focus on the fund's yield, expense ratio, duration, and the credit quality of its underlying holdings, which falls outside the scope of a standard corporate fundamental review.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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As a Treasury Floating Rate Bond ETF, USFR does not have traditional valuation ratios since it invests in government securities rather than equities. The absence of PE ratios, PB ratio, and other common metrics reflects its nature as a fixed income instrument focused on capital preservation rather than equity-like valuation metrics. USFR's valuation should instead be assessed through yield comparisons, duration risk, and relative value to other short-term fixed income alternatives.
Given USFR's structure as a floating rate Treasury ETF, meaningful peer comparison requires contrasting it with other short-duration fixed income products rather than equity-based industry averages. The fund's performance and attractiveness should be evaluated against money market funds, short-term bond ETFs, and competing floating rate instruments based on current yields, expense ratios, and interest rate sensitivity rather than traditional equity valuation metrics.
Investment Risk Disclosure
Volatility Risk: USFR exhibits minimal volatility risk, with a near-zero Beta of -0.02 indicating almost no correlation to broader market movements. This is further supported by an exceptionally low one-year maximum drawdown of -0.53%, reflecting extremely stable performance even in adverse conditions.
Other Risks: The fund appears insulated from concerns over short interest, which is reported as nonexistent, suggesting no significant speculative pressure. Given USFR's structure tracking short-term Treasury floating rate notes, liquidity is typically high, with credit risk being the primary concern, albeit very low for government-backed securities.
FAQs
Bullish for income-focused investors. USFR offers competitive yield (~3.7%) with minimal volatility, backed by floating-rate Treasury notes that provide protection against rate hikes. Recent outflows present a minor headwind, but the fund remains ideal for conservative investors seeking stable income with capital preservation. Suitable for risk-averse investors and those building short-term cash reserves.
Based on its nature as a fixed-income ETF, USFR cannot be classified as overvalued or undervalued using traditional equity metrics. Its value is determined by the market price of its underlying Treasury securities, which are considered to be fairly valued by the market due to their high liquidity and transparency. The appropriate assessment for USFR is based on its current yield and expense ratio relative to other short-duration, risk-free alternatives like money market funds. Given it holds direct government obligations, the fund's principal value is stable, and its "valuation" is effectively a function of its yield versus competing cash-equivalent instruments.
Based on the provided information, here are the key risks of holding USFR:
1. Credit Risk: While extremely low due to exposure to U.S. government-backed securities, the fund remains subject to the remote possibility of a U.S. government default on its obligations. 2. Interest Rate Risk: The fund's yield is tied to short-term rates, so its income will decline if the Federal Reserve cuts interest rates, presenting reinvestment risk for investors seeking yield. 3. Underperformance Risk: The fund prioritizes capital preservation and will consistently underperform equity markets during strong bull periods, as evidenced by its recent 1.65% underperformance. 4. Inflation Risk: If inflation outpaces the yield generated by the fund's short-term Treasury holdings, the investor's real (inflation-adjusted) return will be negative, eroding purchasing power.
Based on the nature of USFR as a short-term Treasury Floating Rate Note ETF, here is a forecast through 2026.
The forecast for USFR to 2026 is not for a significant price change from its ~$50 NAV; investors should expect total returns to be driven almost entirely by the accumulated dividend yield over the period. Key growth drivers are the absolute level of short-term interest rates set by the Fed and the fund's ability to reset its coupon payments higher as rates rise. The primary assumptions are that the US government maintains its creditworthiness and that the fund continues to track its index effectively. This forecast carries moderate uncertainty, as it is entirely dependent on the future path of Federal Reserve monetary policy, which can shift with changes in inflation and economic growth.