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If you're going to park a 'substantial amount of money' somewhere you should be able to look this stuff up and know what you're getting into. Else you're probably better off with SGOV or a HYSA instead of chasing a better yield. There's no such thing as risk-free, high return investments. PFRL is probably more risky than HFSI, but it's the type of risk that makes it interesting to me. The majority of their holdings are in senior secured loans from major institutional banks. My biggest concern is a 2008-style collapse and a wave of defaults. But relative to the market at large, it has not experienced wild price fluctuations. The biggest drop in price it has experienced in 3.5 years was Great American Tariff Day. While most of the market plunged, it dropped from about $50 to $46 and was back up within about 2 months. Otherwise it has been very steady - similar to funds like JAAA. The relative stability and utilization of senior-secured loans make it more attractive to me than something like PHYZX. But I am not a financial expert and you should do your own due diligence. I'm just sharing some funds to look into.
PFRL must be junk bonds like PHYZX, right? How else would it yield the same/more?
I'd look at: - HFSI 6.2% - PFRL 7.7% Both are pretty stable, diversified, and high yield If you think long term interest rates will rise in the near future, PFIX might be good too.
BRLN and PFRL have only existed since 2023. I'm not sure they've ever been stress-tested. Putting your emergency fund into a security, and at that, a security that has existed for less than 2 years, seems quite risky for an emergency fund. FLRT has only existed since 2015, and has a lifetime 3.99%/year total return (including both price and yield), which is lower than the >5% can currently get with 3 month treasuries. Look at FLRT's price chart around 2020, when Covid hit. Notice how it fell from ~$50 to ~$38 in the span of a few months. Losing >20% of your investment's value during an economic crisis, at the exact time when you're most likely to need to use your emergency fund to pay the bills, seems like you're taking on the risk of having your emergency fund worth >20% less at the exact time you need it. You don't need to ask us if there's a risk of the share price plummeting, because public charts already show it did exactly that during Covid... so you already know it can happen. If the returns on BRLN and PFRL mirror FLRT, then not only are they not suitable for an emergency fund as they can crash during bad times when you're most likely to need them, but their total return is actually lower than 3-month treasury bills like the 5.26% on SGOV right now. So you're not even being paid for taking on that extra risk! Yes their yield is higher, but their total return over time is actually significantly lower, AND they're higher risk. There are savings accounts paying 4-5.5%. There are money market funds paying 5-5.5%. Getting >6% requires investing in a security that's likely to drop in value during a crisis, the exact time you need to sell it to cover emergency expenses. Getting only a 4-6% yield is the price you pay for ensuring your funds are safe and accessible in an emergency. If you want to try for a higher yield using floating rate loan ETFS you can... but you're taking on risk of not being able to get full value if you have to sell, not getting as high a total return as treasuries, AND having to pay higher taxes to boot. This isn't financial advice, this isn't investing advice, this isn't encouragement to buy or sell any security, this is simply how I'd run the calculation if I was in your shoes.