tax-efficient T-bill proxy, but IRS risk looms.
BOXX uses a box-spread option strategy to track T-bill returns with potential tax advantages, but the IRS has not blessed the structure, creating regulatory tail risk.
BOXX aims to produce T-bill-like returns (~mid-4% yield) via box spreads, deferring taxes and potentially converting ordinary income into long-term capital gains. However, the IRS has started questioning this treatment, and the fund's own prospectus warns the tax structure may not survive a challenge.
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