The latest episode of The Albatross is about box spread ETFs. My guest is NYU Professor, Daniel Hemel, who thinks Treasury's interest in box spread ETFs might have broader implications for lending/earning return well beyond the ETF wrapper.
|
🍻🍻🍻
Seattle-area advisers... I'm considering a small event called Basis Pints (get it?) on Nov 18, 3-6 PM PT focused on year-end tax planning in Washington State. Food and bev included.
Interested in joining? Please fill out this form.
This piece is educational and mentions the box spread ETF called BOXX, but is not an endorsement, nor a recommendation to buy or sell any securities. It is also not investment, tax, or legal advice. Hire counsel for those things.
Box spreads seem to be everywhere nowadays.
There are two sides to the market: borrowing and lending.
Borrowing uses the capital markets to extract liquidity as an alternative to something like a securities-backed line of credit or a margin loan.
Last year, I estimated the total market for borrowing via box spread might conservatively be $1 trillion.
Lending is similar to how Treasury bill investors lend to the Federal Government: give away cash for a while, and more cash comes back later.
I recently spoke with NYU Professor Daniel Hemel about how Treasury calling out box spread ETFs in Notice 2026-62 (released Sept. 28, 2026) could extend well beyond the ETF wrapper.