Forget Savings Accounts. Use This New ETF Instead. (BOXX ETF Review)

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  • čas přidán 27. 08. 2024

Komentáře • 141

  • @OptimizedPortfolio
    @OptimizedPortfolio  Před 6 měsíci +10

    What do you think of the new BOXX ETF from Alpha Architect? Do you own it? Are you planning to buy it?

    • @ThePeterDislikeShow
      @ThePeterDislikeShow Před 4 dny

      A better idea is to make use of tax deferred accounts. Roth, 401k, HSA, etc before you even think about this. Don't invest in anything you can't understand and certainly not anything more than you can afford to risk.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 4 dny

      @@ThePeterDislikeShow Sure, but a savings account and cash equivalents are entirely different from retirement accounts, which are inherently illiquid.

    • @ThePeterDislikeShow
      @ThePeterDislikeShow Před 4 dny

      @@OptimizedPortfolio You have to remember the main reason you buy Treasuries is to avoid counterparty risk, at least limit it to the full faith and credit of the US Government. To go around that and add multiple layers of counterparties and then not be compensated for it except for the ability to defer taxes is asinine. It reeks of 2008.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 4 dny

      @@ThePeterDislikeShow The main reason to buy treasuries is certainly not to simply "avoid counterparty risk." If we mean T-bills or other cash equivalents, it's usually to avoid price risk. Counterparty risk is often immaterial unless we're talking about illiquid instruments. The OCC also existed during/through 2008.
      "Not be compensated for it?" Box spread premium + tax savings can be substantial. I explained ALL this in the video already.
      Don't get me wrong; people should definitely understand what they're buying and the risks involved. But "asinine?" I guess all those people who have put $3B+ into BOXX are just stupid.

  • @johnm4390
    @johnm4390 Před 6 měsíci +5

    I'm holding about a third of our Emergency Fund in it right now. As time goes on, I'm likely to build that position. I like the tax-efficient nature of BOXX.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +3

      Awesome, thanks for sharing, John! I'm going to start building a position as well.

  • @mlovidius
    @mlovidius Před 6 měsíci +5

    Thank you, this is a god send for me! I have almost 80K in capital gain losses and recently, left a money manager charging 1.5%. He made 14K in my time with him, I made 3K :) when I left I left with only cash in all accounts. I will go slowly into ETFs over the next several months and will have a large cash holding that I can now use BOXX to use my Capital gain losses. From you video, it sounds like BOXX is risk free and in my case tax free for a while. :)

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci

      Glad it helped!

    • @digilifepro
      @digilifepro Před 4 měsíci

      You're the 2nd person who has mentioned long term capital losses and how this strategy helps with that. I don't follow at all. Could you break it down a bit more? Cheers

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 4 měsíci

      @@digilifepro I believe this person is referring to tax loss harvesting: czcams.com/video/i6GW7ONm168/video.html

  • @dannyjensen4954
    @dannyjensen4954 Před 6 měsíci +3

    Thank you for covering this topic. Great topic for people that that have accumulated long term loss carry forward and are limited to $3000 per year.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci

      Indeed, Danny. Thanks for watching!

    • @digilifepro
      @digilifepro Před 4 měsíci

      Could you elaborate on how this strategy relates to long term carry forward losses? Thx

    • @animeboi3939
      @animeboi3939 Před 3 měsíci

      @@digilifepro It's usually better to claim your losses as quickly as you can, which requires capital gains if they are over $3,000. If you hold BOXX for a year and sell (and buy right back into) you will get long term cap gains to claim losses against.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 3 měsíci

      @@digilifepro Realizing gains that would just be offset by losses. You can read more here: www.bogleheads.org/forum/viewtopic.php?t=410602

  • @TheSimArchitect
    @TheSimArchitect Před 2 měsíci +2

    I did the same today! So happy that I finally found something like this! I kept asking and looking around and only today I was able to dump my BIL to get this. As I am not a US Person I lose a massive percentage as witheld tax for dividends. No tax on capital gains in my country. Much better.

  • @marcuscarreiro72
    @marcuscarreiro72 Před 3 měsíci +2

    Great explanation.. Not sure if I got everything (Brazilian here), but my main reason to think about BOXX is that we pay 30% on every dividend paid by every ETF... If the ETF intent to 'not pay anything on dividend' with the same tflo/sgov ETFs, I think I have a new favorite... 😉 I'll research a bit more about it... Thanks a lot

    • @marcuscarreiro72
      @marcuscarreiro72 Před 3 měsíci

      I also thought about Irish ETFs but my current broker doesn't have them and I'd have to move to Interactive Brokers and it would be a pain in the a...... :)

    • @fpivi
      @fpivi Před 3 měsíci +1

      Someone have been watching Otávio Paranhos... 😂

    • @marcuscarreiro72
      @marcuscarreiro72 Před 3 měsíci

      @@fpivi actually I've seen a couple of his videos... 😉

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 3 měsíci +2

      Thanks for sharing!

  • @kyleskitco7235
    @kyleskitco7235 Před 6 měsíci +7

    I wish this worked for me, but since I'm in California it makes more sense just to invest in t-bills as state tax does exist

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +1

      Indeed. Thanks for sharing, Kyle.

    • @ThePeterDislikeShow
      @ThePeterDislikeShow Před 4 dny

      You realize that treasuries don't have local taxes right?

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 4 dny

      @@ThePeterDislikeShow That's what he's getting at. T-bills make more sense in his situation because they're exempt from state taxes, whereas cap gains from BOXX would not be.

  • @CBLE
    @CBLE Před 6 měsíci +3

    Saw your ad on Reddit, well explained.

  • @danielowen9210
    @danielowen9210 Před 6 měsíci +6

    Is the return on boxx expected to rise or fall when the yield on T-bills rises and falls, or is the box spread return independent of interest rates?

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +3

      Great question, Daniel. I forgot to explicitly mention that in the video. We would indeed expect the return of BOXX to rise and fall with T-bills yield. Check out the graph at 4:17 showing that box spread rate closely following T-bill rates. Like I noted, we would expect it to always be a little bit higher.

  • @BrianTX409
    @BrianTX409 Před měsícem +2

    My income from all sources is below the government threshold of $47K so I pay 0% capital gains taxes. And still aggressively investing at 62 years young.

  • @Michael-DS
    @Michael-DS Před 6 měsíci +4

    Could you please do a video detailing how to borrow money using box spreads?

  • @surfrduede
    @surfrduede Před 6 měsíci +1

    Thanks for the interesting content John! It’s potentially an interesting ETF….I might look at the what advantages/downside there is to just implementing the underlying strategy vs the ETF

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +2

      Glad you found it interesting! Sounds like a great idea!

    • @surfrduede
      @surfrduede Před 6 měsíci

      @@OptimizedPortfolio After reviewing the underlying strategy, I think it makes sense to just own the ETF at 20 bips when level of effort and options fees are considered. State tax (CA) is a factor for me, so that makes it less attractive vs SGOV,TFLO etc.....but I was unaware of the ETF and appreciate the info. I think it has a good bit of utility for short term cash needs.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci

      @@surfrduede Thanks for sharing!

  • @JosephDickson
    @JosephDickson Před 6 měsíci +2

    Sounds good but wrapping my head around it is another story. If I don't understand exactly what's happening with my emergency fund I'm not gonna risk it.

  • @hoblino
    @hoblino Před 3 měsíci

    I love BOXX. I currently have my short term treasury allocation split equally between VGSH and BOXX.

  • @riskparitychronicles
    @riskparitychronicles Před 6 měsíci +6

    Great review - next, how about a review of CAOS? That holds 60% or so of BOXX and takes the other 40% and buys deep out of the money puts on the S&P, thereby providing tail protection. In good times, gives you 60% of BOXX, but then added oomph in case of quick market drawdowns. For investors who use cash holdings as a dry powder fund, makes a lot of sense! If you need a place to store cash, BOXX is my choice, too, but taking it one step farther, iof you need a place to store cash in order to buy equities at opportune times, CAOS it is.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +2

      Been meaning to get around to CAOS for a while.

    • @Crud_3
      @Crud_3 Před 5 měsíci +1

      @@OptimizedPortfolioI'd appreciate a video reviewing CAOS

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 5 měsíci +1

      @@Crud_3 On my list to get to at some point!

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 4 měsíci +1

      Forgot to tag you on Twitter. You might enjoy my newest video from a risk parity perspective: czcams.com/video/i2nGUaWpUzs/video.htmlsi=YJslAhfCDTrYvamq

    • @riskparitychronicles
      @riskparitychronicles Před 4 měsíci

      @@OptimizedPortfolio Thanks! I like the desert portfolio, but... I'd lever it up! 15% GDE, 30% EDV, 30% RSBT and 25% RSST, to make it 38% stocks, 60% bonds (with more duration risk), 55% trend and ~13% gold. same basic portfolio, but +68% extra leverage. That 3:6:1 is a really sturdy frame on which to build.

  • @DaJonez24
    @DaJonez24 Před 6 měsíci +1

    Interesting product. A few unrelated questions, thoughts maybe: If Uncle Sam understands the ETF's purpose, is there any risk of them regulating a fund like this out of business? The government likes their money. Point 2, if/when interest rates drop, will anybody care about any of these options anymore? In other words, is the money savings for a short period of time worth the effort? Seriously considering despite the comments above. Appreciate all thoughts, thanks!

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +1

      Yea, always a risk of future changes in regulations and tax laws.
      Point 2: Sure. We always need a place for short term cash and emergency fund.

  • @digilifepro
    @digilifepro Před 4 měsíci

    I know this is about tax savings but just for the info I ran BOXX v SGOV thru ETF Return Calc for Jan 2023 - present and you get:
    SGOV = 5.23% Return
    BOXX = 5.12% Return
    Pretty close then add in tax strategy, looks good! Cheers

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 4 měsíci +2

      Is ETF Return Calc a particular tool? I'm getting different results with PV as I showed in the video: www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=5cmgcNQyxCBsKdC15MCaJG

    • @rlmint
      @rlmint Před 3 měsíci

      What if you are in a high tax state like New York or California, etc.? Also, how did BIL perform during that period?

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 3 měsíci +2

      @@rlmint Again, BOXX has less of an edge for high tax states, so consult your tax professional on the comparison. BIL is basically the same thing as SGOV but with a higher fee.

  • @romansole114
    @romansole114 Před 5 měsíci +1

    Hey! Thanks for highlighting this great tool
    Against SGOV, it has tax benefits cause you save the 30% of the dividend distribution?
    (Im not a US investor, I believe I cannot avoid paying that 30% tax over dividends) :)

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 5 měsíci

      Yes, primary benefits are cap gains over income and the deferral/avoidance thereof.

  • @ThomasMcCreary-l6n
    @ThomasMcCreary-l6n Před měsícem

    I was in this ETF before but this brought me to your CZcams channel. Do you have securities you recommend that have similar structure, the only big diversified non-dividend stocks that come to mind are Berkshire Hathaway, are there others you recommend or ETFs for that matter?

  • @eldersprig
    @eldersprig Před 6 měsíci

    remembered the article you wrote about investing the emergency fund. Substituting BOXX for VGSH, gives higher CAGR and Share ratio. Only a year's worth of data so probably not important.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci

      Good point. I may incorporate it in there, or I may just leave that one to be pretty simple and approachable. BOXX alone is arguably hard enough to wrap one's head around. VGSH is also longer than T-Bills, though.

  • @piratehussam
    @piratehussam Před 6 měsíci +1

    Is it still relevant to international Investors? Where we pay only Long-term capital gains tax?

  • @edaison
    @edaison Před 15 dny +1

    Any idea why the price of BOXX dropped today almost $0.25?
    My holdings just lost $400 in value today

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 15 dny +3

      Dividend ex date. I'd suggest making sure your email alerts are enabled so that you can better monitor your holdings.

    • @edaison
      @edaison Před 14 dny

      Are you positive BOXX distributes dividends?

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 14 dny +3

      ​@@edaison ​ What do you mean? Of course. They just announced one. Hence the drop. Today was the ex date.

  • @brandonmiddendorf6415
    @brandonmiddendorf6415 Před 6 měsíci +1

    Would BOXX have a noticeable impact over a HYSA or SGOV for those not in a high tax bracket ? Or would it be close to a wash due to the lower income tax rates ?

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +4

      Great question. Definitely!
      Consider someone making about $40k/yr. In 2024, their marginal tax rate on HYSA or SGOV distributions would be 12%, but LTCG rate for that person would be zero.
      Suppose $1,000 in effective interest over 1 year. HYSA or SGOV would incur a tax bill of $120, even if it's just reinvested. BOXX would [hopefully] have no distributions (like for 2023) and if the investor wanted to realize gains, their LTCG rate again is zero, so zero taxes.

  • @user-of3qu5um9p
    @user-of3qu5um9p Před 23 dny

    What however could be the changes if and when rates start to lower on the 4 week T-Bills. I see in just the past week a major change of over a point plus in the 8 week against the 4 week. This is as of 8/5/2024. What would the expect ROR be in a declining or rapidly declining rate environment?

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 23 dny +1

      Not sure what you're asking. BOXX will closely follow 3-month T-bill rates at any given time.

    • @user-of3qu5um9p
      @user-of3qu5um9p Před 23 dny

      @@OptimizedPortfolio I wasn't clear. It's an instrument that is highly parallel to the T-Bill rate as you expressed. This product was brought to my attention this morning by a friend. I have around 250k in Capital losses I'm still carrying and at 3k a year my grandchildren wouldn't benefit from the inheritance of those loses (if such were the case). After watching a few other vid on BOXX following this one, I don't really see the advantages I suppose. Largely because of the cautionary warning someone pointed out in a vid with raising the red flag with the lack of clarity in absolute treatment by the IRS. Could you please re-state the reasoning to do BOXX vs. T--Bills which my wife and I started doing last year. There are trade offs. Boxx is claimed to be treated as a Captial Gain. If that were in concrete that would be great. However with T-bill they offer favorable overall tax benefits of only Federal. BOXX also has it's fees and there was suggestion it will be going higher. Lastly I get the feel with the relative lack of history with this product it feels like something quickly put together for a moment in time to compete with the T-bill gig.

  • @mr2981
    @mr2981 Před 6 měsíci +1

    Excellent video, thank you.

  • @Jim-mz1cf
    @Jim-mz1cf Před 6 měsíci

    This is a great video, but with the tax rates we face in MN, our marginal tax rate with boxx would be about 2.6% higher than with tbills

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci

      Thanks for sharing. Even when considering LTCG after a year?

    • @Jim-mz1cf
      @Jim-mz1cf Před 6 měsíci

      @@OptimizedPortfolio Yes, based on 60% long term and 40% short term CG, which is what I thought you said. Federal 22% marginal, 15% LTCG, 6.8% state, bumping up to 7.85% state.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +1

      The 60/40 is for any distributions, so I guess it comes down to whether or not BOXX is able to avoid them, which we can't know for sure ahead of time. But that's the plan. It had no distributions for 2023. If you could hold for a year, then anything you sell would just be LTCG. But of course you might need your emergency fund within a year. So a murkier comparison indeed.

    • @Jim-mz1cf
      @Jim-mz1cf Před 6 měsíci +1

      @@OptimizedPortfolio assuming 100% LT, 15%+6.8%=21.8%, vs 22% (tbills are state tax exempt), so if there are 0 short term gains and I manage to stay out of the 7.85% bracket, a 0.2% gain is best case.

    • @Jim-mz1cf
      @Jim-mz1cf Před 6 měsíci +1

      There would be more benefit for people whose income is higher.

  • @ASHANTIGHAZIKHALIF
    @ASHANTIGHAZIKHALIF Před 6 měsíci +1

    Thanks very informative.

  • @ebrahimhabib477
    @ebrahimhabib477 Před 6 měsíci

    Great video, very good information
    Regards from Egypt

  • @timothyhoytbsme
    @timothyhoytbsme Před 2 měsíci

    How does early exercising play into this fund?

  • @pavXX
    @pavXX Před 6 měsíci +2

    smart strategy

  • @theoliverpuma
    @theoliverpuma Před 6 měsíci

    So straddling the S&P 500 for the long term

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +1

      Doesn't necessarily have to be for the long term. However you long you want to invest cash until you need it.

  • @JonTheDisciple
    @JonTheDisciple Před 6 měsíci

    Unless I'm missing something, I think SGOV would be better in the short term and BOXX for the long term. Also one for tax advantage and the other for taxable

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +4

      A closer toss up over the short term, but BOXX still probably comes out ahead due to its ability to avoid distributions. At worst, STCG would be at one's marginal tax rate, same as SGOV's interest.

  • @viktorivanov2569
    @viktorivanov2569 Před 6 měsíci

    Why not just use Irish UCITS accumulating ETFs for TBills?

  • @christopherwilliams6191
    @christopherwilliams6191 Před 6 měsíci

    Thanks John, but what about tracking error stemming from both 1) drift between the S&P and the risk-free rate and 2) drift between the spread and the underlying S&P value? The S&P won’t perfectly approximate the risk-free rate nor will the spread perfectly approximate the S&P’s movement over the same period, right?

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +3

      The value of the S&P is irrelevant to the box spread trade. It's just used because it's a highly liquid index.

  • @coinbowl
    @coinbowl Před 6 měsíci

    I don’t understand calls or puts

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +1

      While I'm certainly usually a fan of understanding what you're buying and why you're buying it, recognize that you don't need to understand calls or puts in order to benefit from this fund. That's why it was created - so that investors don't have to go manually implement box spreads on their own.

  • @jiti5034
    @jiti5034 Před 3 měsíci

    What if US tax does not apply?

  • @erdrick22
    @erdrick22 Před 6 měsíci

    Optimized Portfolio:This is what a Roth IRA is.
    Also Optimized Portfolio: BOXX is an arbitrage investment in a wrapper you can spend a weekend attempting to understand.
    Hey I'm not complaining its this sudden depth that I like about the channel !

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci

      Thanks for watching! Remember though that a Roth IRA incurs penalty and taxes on early withdrawal of earnings, so not really the same thing, though one could arguably use their Roth contributions as an emergency fund.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 2 měsíci +2

      Circling back here, I realize I must have misunderstood the joke you were going for originally. I like it! 😂But yes I've thought about that exact thing, like I wonder if the "What is a Roth IRA?" video viewer cares about the BOXX video and vice versa. But I do want to have a range of content for both novices and seasoned investors.

    • @erdrick22
      @erdrick22 Před 2 měsíci +1

      @@OptimizedPortfolio its all good I figured it was a poor joke or you were busy that day

  • @johnknight6965
    @johnknight6965 Před 6 měsíci

    What is the actual tax benefit with BOXX compared to T-bills?

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +2

      I explained that in the video. Cap gains over income and avoidance/deferral of distributions.

  • @thebeattielife9528
    @thebeattielife9528 Před 6 měsíci +1

    *head explodes*

  • @whodidit99
    @whodidit99 Před 12 dny

    Why did BOXX go down .28 about a 1/4 percent on 8/13/24 ?

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 12 dny +1

      Because they paid a distribution.

    • @whodidit99
      @whodidit99 Před 2 dny

      @@OptimizedPortfolio Yes, I called them, and checked my account. The distribution is 60% long term, 40% short term cap gains.

  • @mere_cat
    @mere_cat Před 6 měsíci +1

    Not sure I fully understand this product enough to invest. Sounds almost too good to be true.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +3

      That's what I thought at first too.

    • @mere_cat
      @mere_cat Před 6 měsíci

      @@OptimizedPortfolio does that explain the perplexed look in the thumbnail? 😂

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci

      @@mere_cat Hah totally!

  • @ThePeterDislikeShow
    @ThePeterDislikeShow Před 5 dny

    Sounds like a lot of counterparties that can go south. No thanks.

  • @鱼眼儿看美股
    @鱼眼儿看美股 Před 6 měsíci +2

    Thanks, sounds a little bit complicated. I am using $HIGH to park cash in my IRA account. 9% yield after expense, almost no risk.

    • @djayjp
      @djayjp Před 6 měsíci +1

      Yeah HIGH has 50% higher total return than BOXX.

    • @vinnv226
      @vinnv226 Před 6 měsíci +8

      HIGH is selling call spreads on gold miners, Chinese internet stocks, oil and gas companies, and the Russel 2000. Definitely not "almost no risk," and I wouldn't call it less complicated than box spreads either.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 6 měsíci +5

      As the other user noted, HIGH is arguably more complicated and certainly riskier than BOXX. It also throws off distributions monthly, and here with BOXX the main benefit is the tax efficiency. HIGH's 30 days SEC yield is also 4.82% as of January 2024, which is less than SGOV.

    • @Delta3angle
      @Delta3angle Před 6 měsíci +4

      9% yield and almost no risk? Lmfao yeah right!

  • @Bullish-Vibes
    @Bullish-Vibes Před 3 měsíci

    Every about the word synthetic gives me PTSD from 2008

  • @FatherGapon-gw6yo
    @FatherGapon-gw6yo Před 4 měsíci

    Wow thats cool. Im definitely going to park 40% of my portfolio in there for safe kerping.
    Not.

  • @whodidit99
    @whodidit99 Před měsícem

    I can't stand those stupid cheesy stock videos. So many CZcams consultant has their clients use them. HOrrible.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před měsícem +1

      Well I don't have a CZcams "consultant," but thanks for the feedback!

    • @whodidit99
      @whodidit99 Před 12 dny

      @@OptimizedPortfolio They really are horrible and really stand out.

    • @OptimizedPortfolio
      @OptimizedPortfolio  Před 12 dny

      @@whodidit99 Noted

  • @coinbowl
    @coinbowl Před 6 měsíci

    Eighth Commenter