Best ETFs for Rising Interest Rates

The WisdomTree Floating Rate Treasury Fund (NYSE:USFR) offers a similar combination of high credit quality, monthly income, and limited interest-rate sensitivity, but achieves it through a different type of Treasury security. Rather than holding conventional short-term T-bills, USFR invests in floating-rate Treasury notes with original maturities of two years. Their coupon rates reset weekly based on the highest accepted discount rate from the most recent 13-week Treasury bill auction, plus a fixed spread established when the notes are issued.

This structure allows USFR’s income to adjust relatively quickly as short-term Treasury yields change, without requiring the fund to continually replace its entire portfolio. As of Oct. 12, 2026, USFR offered a 3.93% 30-day SEC yield, higher than SGOV’s 3.73%, although it also charges a slightly higher 0.15% expense ratio. Both ETFs invest in securities backed by the U.S. Treasury, so their credit quality is essentially comparable.

USFR could outperform SGOV during periods when short-term Treasury yields rise quickly, and floating-rate notes reset upward, particularly if the fixed spreads embedded in its holdings provide additional income relative to conventional T-bills. However, this advantage is not guaranteed. The market prices of floating-rate notes can fluctuate as their spreads change, and SGOV also benefits rapidly from higher yields as its T-bills mature. In practice, both funds serve similar cash-management purposes, with USFR offering a somewhat different mechanism for capturing rising short-term rates.