alt Hacker NewsAt .49% expense ratio, plus whatever your cut is, it won't be a very cheap product. Even SPAXX, the default holding of cash at Fidelity is cheaper at .42% ER.
There is no free lunch in investing, so that extra yield comes with extra risk. Be that duration, credit, etc. That's not to say MBS's don't have their place, but I would never claim people's mortgages as equivalent to cash in any shape or form. Your website claims MBSF is safe for 3+ month durations, but that is not the avg duration of MBSF held securities, so you are encouraging duration risk.
I haven't read the full prospectus on MBSF, so I'm not an expert on that product, but it seems expensive and complicated, which is not what you want for cash and cash-like things. This should be a hard pass for literally everyone.
Meanwhile you can hold something like ICSH[0] or SGOV[1] with expense in the .09% or lower range(i.e. for every $10k we are talking $9/yr or less in fees). SGOV is 0-3 month max duration, so it's perfect for holdings in the 3 month time-frame. If you need longer time frames you can buy govt bond ladders in whatever time frame you want.
What your product should have been: You specify duration for each of your buckets, and then you pick appropriate, cheap index-based investments that are cheap and easy to reason about for each of the buckets.
0: https://www.ishares.com/us/products/258806/ishares-liquidity... 1: https://www.ishares.com/us/products/314116/ishares-0-3-month...
The 4.5-5% yields we quote are net of expense ratio. Then our cut is 0.25%, comparable to the 0.15% to 0.6% charged by Mercury, Rho, etc. And we're working on bringing that expense ratio down as we scale.
Functionally speaking, short-duration floating-rate agency MBS trade at such a stable NAV that they're perfectly sufficient for long-term cash, and many large companies trade these.
MBSF is complex in the way that basically any fund is complex, but the strategy it employs is actually quite simple since it only trades a single asset class. Yes the expense ratio is higher than some other funds but the additional yields more than make up for it.
ICSH and SGOV are great funds too, and make sense for shorter-term cash, but they pay significantly less than we do.
Broadly speaking, our product is meant for exactly the kind of cash strategy you're thinking about: multiple buckets with duration spread accordingly. At the moment, our platform is just for the long-term bucket. But in the future, we might add additional shorter-term buckets too (maybe even with ICSH or SGOV).