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For a detailed report on the mechanics behind the BOXX ETF, Bloomberg just published this article: https://archive.is/8kq0G https://archive.is/8kq0G It is not a

For a detailed report on the mechanics behind the BOXX ETF, Bloomberg just published this article: https://archive.is/8kq0G https://archive.is/8kq0G It is not a perfect solution for everyone. You do need to take into account your income tax rate and your capital gains tax rate.

infecto 3y ago
The universe has come full circle. For those of us who cannot resolve archive link. Article https://www.bloomberg.com/news/articles/2024-02-22/this-exchange-traded-fund-mimics-t-bill-returns-without-tax-bills https://www.bloomberg.com/news/articles/2024-02-22/this-exch... Matt Levine's https://www.bloomberg.com/opinion/articles/2024-02-22/put-the-money-in-the-boxx https://www.bloomberg.com/opinion/articles/2024-02-22/put-th...
- ct0 3y ago
  Does your DNS block archive.is?
  - woleium 3y ago
    i was going to ask this. you can fix it with a static hosts file entry, or dnsmasq config update on your router. See https://www.reddit.com/r/DataHoarder/s/gfH9MFAxcp https://www.reddit.com/r/DataHoarder/s/gfH9MFAxcp for more info
  - radlad 3y ago
    Cloudflare has issues with archive.is: https://news.ycombinator.com/item?id=28495204 https://news.ycombinator.com/item?id=28495204
    - Hello71 3y ago
      the opposite is the case. from your link: "Archive.is’s owner is intentionally blocking 1.1.1.1 users"
      - bombcar 3y ago
        The archive owner wants takedown requests to be forced to be cross-border, so he wants to know where the request is coming from so he can serve from a server in a different country. Cloudflare blocks the extension to DNS that allows that. If you don't care, you can set your DNS to bypass Cloudflare for those domains only.
        lxgr 3y ago
        I’ve known this for a while now but it never ceases to amaze me. This must be up there with “no copyright intended” in terms of misguided compliance strategies.
      - radlad 3y ago
        It's always appeared to be a matter of perspective, to me. That being said, by "Cloudflare has issues with archive.is" I very literally meant that they have issues with the DNS records served to them by Archive.is. (i.e. They do not support EDNS.)
  - infecto 3y ago
    I have had issues in the past. The problem with posting only the archive link is it provides no stable reference link to the actual article.
hippich 3y ago
Can someone explain it a bit better? I am not quite sure why in addition to spx this fund buys options on Bookings? Also, where is the risk in this strategy, besides counter parties risk.
- derf_ 3y ago
  The Bookings options are explained in the Bloomberg article. They use offsetting bets so that one generates a large gain and the other generates a large loss (either way the stock moves). Then the gain is offloaded through an in-kind redemption (not a taxable event for an ETF) and the loss is kept on the books to offset any other taxable gains in the fund. I guess you could worry what happens if the stock doesn't move, but since they get to pick the timing, that seems unlikely to be an issue in practice. I can think of at least a few risks that one would not have with T-bills besides counterparty risk. You have management risk: they have said what their strategy is and what they will do, but what if they don't? I would also ask who is on the other side of these trades and how big that market is or can be. Alpha Architect's own explainer implies that box spreads can also be used to borrow money and that this might be cheaper for the borrowers than margin loans, which makes some sense, but it seems like a pretty esoteric instrument to use for that. Most of their argument is an appeal to the efficiency of markets, which might be true until it isn't. Finally, there's regulatory risk. They think this works under the current rules, but a regulator might disagree with that. If someone does not like it a sufficient amount the rules could be changed, just like there's already an exception for "original issue discount" that makes zero-coupon bond income like Treasuries count as interest income, not capital gains, even though no interest payments are ever made. I'm not in finance, though, I'm just some guy, so take all of the above with a grain of salt.

infecto 3y ago

The universe has come full circle. For those of us who cannot resolve archive link. Article https://www.bloomberg.com/news/articles/2024-02-22/this-exchange-traded-fund-mimics-t-bill-returns-without-tax-bills https://www.bloomberg.com/news/articles/2024-02-22/this-exch... Matt Levine's https://www.bloomberg.com/opinion/articles/2024-02-22/put-the-money-in-the-boxx https://www.bloomberg.com/opinion/articles/2024-02-22/put-th...

ct0 3y ago
Does your DNS block archive.is?
- woleium 3y ago
  i was going to ask this. you can fix it with a static hosts file entry, or dnsmasq config update on your router. See https://www.reddit.com/r/DataHoarder/s/gfH9MFAxcp https://www.reddit.com/r/DataHoarder/s/gfH9MFAxcp for more info
- radlad 3y ago
  Cloudflare has issues with archive.is: https://news.ycombinator.com/item?id=28495204 https://news.ycombinator.com/item?id=28495204
  - Hello71 3y ago
    the opposite is the case. from your link: "Archive.is’s owner is intentionally blocking 1.1.1.1 users"
    - bombcar 3y ago
      The archive owner wants takedown requests to be forced to be cross-border, so he wants to know where the request is coming from so he can serve from a server in a different country. Cloudflare blocks the extension to DNS that allows that. If you don't care, you can set your DNS to bypass Cloudflare for those domains only.
      - lxgr 3y ago
        I’ve known this for a while now but it never ceases to amaze me. This must be up there with “no copyright intended” in terms of misguided compliance strategies.
    - radlad 3y ago
      It's always appeared to be a matter of perspective, to me. That being said, by "Cloudflare has issues with archive.is" I very literally meant that they have issues with the DNS records served to them by Archive.is. (i.e. They do not support EDNS.)
- infecto 3y ago
  I have had issues in the past. The problem with posting only the archive link is it provides no stable reference link to the actual article.

hippich 3y ago

Can someone explain it a bit better? I am not quite sure why in addition to spx this fund buys options on Bookings? Also, where is the risk in this strategy, besides counter parties risk.

derf_ 3y ago
The Bookings options are explained in the Bloomberg article. They use offsetting bets so that one generates a large gain and the other generates a large loss (either way the stock moves). Then the gain is offloaded through an in-kind redemption (not a taxable event for an ETF) and the loss is kept on the books to offset any other taxable gains in the fund. I guess you could worry what happens if the stock doesn't move, but since they get to pick the timing, that seems unlikely to be an issue in practice. I can think of at least a few risks that one would not have with T-bills besides counterparty risk. You have management risk: they have said what their strategy is and what they will do, but what if they don't? I would also ask who is on the other side of these trades and how big that market is or can be. Alpha Architect's own explainer implies that box spreads can also be used to borrow money and that this might be cheaper for the borrowers than margin loans, which makes some sense, but it seems like a pretty esoteric instrument to use for that. Most of their argument is an appeal to the efficiency of markets, which might be true until it isn't. Finally, there's regulatory risk. They think this works under the current rules, but a regulator might disagree with that. If someone does not like it a sufficient amount the rules could be changed, just like there's already an exception for "original issue discount" that makes zero-coupon bond income like Treasuries count as interest income, not capital gains, even though no interest payments are ever made. I'm not in finance, though, I'm just some guy, so take all of the above with a grain of salt.