BOXX ETF: The Smart, Tax-Efficient Cash Alternative for 2025

Learn how the Alpha Architect 1-3 Month Box ETF (BOXX) delivers T-bill-like returns with unique tax advantages. Find out if BOXX is the best cash alternative ETF for your portfolio in 2025, with clear explanations and up-to-date performance data.

If you’re searching for a safe place to park your cash but want more than a basic savings account or money market fund, the BOXX ETF might be the answer. This innovative exchange-traded fund uses a sophisticated options strategy to mimic the returns of short-term Treasury bills—while offering a powerful tax advantage for investors in taxable accounts.

Here’s what you need to know about the Alpha Architect 1-3 Month Box ETF (BOXX), how it works, who it’s best for, and how it stacks up against traditional cash alternatives.

What Is the BOXX ETF?

The Alpha Architect 1-3 Month Box ETF (ticker: BOXX) is a cash alternative ETF designed to deliver returns similar to U.S. Treasury bills, specifically those with maturities of 1 to 3 months. Launched in late 2022 by Alpha Architect, BOXX has quickly attracted billions in assets by promising T-bill-like returns with a tax-efficient twist¹⁰ ¹².

Key Facts About BOXX

Fund Type: Exchange-Traded Fund (ETF)
Issuer: Alpha Architect
Inception Date: December 28, 2022
Assets Under Management: Over $6 billion as of May 2025¹⁰ ¹²
Expense Ratio: 0.19%² ¹²
Target Return: Matches 1-3 month Treasury bills, less fees
Strategy: Uses “box spread” options on the S&P 500 and select single stocks¹ ³
Tax Treatment: Aims for long-term capital gains tax rates on what is typically cash-equivalent income³ ²

How Does BOXX Work? Understanding the Box Spread

BOXX’s secret sauce is the “box spread,” a well-known options strategy typically used by institutional investors. Here’s how it works in plain English:

A box spread involves buying and selling a combination of call and put options at different strike prices.
The result is a position that’s almost risk-free and delivers a fixed payout at maturity, similar to a zero-coupon bond.
In BOXX’s case, the fund buys box spreads on S&P 500 index options (and sometimes single-stock options) with maturities matching the 1-3 month T-bill window³ ².

Why use options instead of just buying T-bills?
The key is tax efficiency. While T-bill interest is taxed as ordinary income, BOXX’s returns are realized as capital gains. If you hold BOXX for more than a year, you can pay the long-term capital gains tax rate (max 20%), which is much lower than the top ordinary income rate (up to 37% federally)³ ⁶.

Tax efficiency is the main reason investors are flocking to BOXX. Here’s what sets it apart:

Deferral of Taxes: Unlike money market funds or T-bills, BOXX doesn’t pay out regular income. Instead, gains are only realized when you sell your shares, giving you control over when you pay taxes³ ².
Long-Term Capital Gains: Hold BOXX for over a year, and your gains may qualify for the lower long-term capital gains rate³ ⁶.
Offsetting Gains and Losses: BOXX’s managers can use in-kind redemptions and offsetting trades to further manage tax consequences within the fund³.

Who benefits most?
High-income investors in taxable accounts stand to gain the most from BOXX’s tax treatment. If you’re in a high tax bracket, the difference between paying 37% on T-bill interest and 20% (or less) on BOXX’s capital gains can be significant³ ².

BOXX ETF Performance: Does It Deliver?

BOXX’s performance has closely tracked its goal of matching 1-3 month Treasury bill returns, minus its low expense ratio. Here’s a snapshot of recent performance:

Period	BOXX Return	Category Average	FactSet Segment Avg
1 Month	0.35%	-0.53%	0.25%
3 Month	1.05%	0.51%	0.74%
Year-to-Date	1.69%	1.21%	0.94%
1 Year	4.59%	3.22%	2.82%

Data as of May 2025⁶ ¹² ¹⁴.

Historical Price Growth:
BOXX’s share price has risen steadily, reflecting its T-bill-like accrual. For example, from May 2023 ($101.94) to May 2025 ($111.93), the price increased by roughly 9.8%⁵ ⁷ ⁹.

BOXX ETF vs. Traditional Cash Alternatives

How does BOXX stack up against other places to park your cash, like money market funds or Treasury bills? Here’s a quick comparison:

Feature	BOXX ETF	Money Market Fund	1-3 Month T-Bills
Yield	T-bill-like (4–5%)	Similar (varies)	Matches T-bill rate
Liquidity	High (traded like a stock)	High	High
Tax Treatment	Potential long-term cap gains	Ordinary income	Ordinary income
Minimum Investment	1 share (low)	Often $1–$500	$100–$1,000
Expense Ratio	0.19%	0.10–0.30%	None (direct)
Risk	Very low (options-based)	Very low	Very low
FDIC Insurance	No	Sometimes (bank MMFs)	No

Bottom line:
BOXX is best suited for taxable accounts where the tax benefit is meaningful. In IRAs or other tax-advantaged accounts, the main advantage disappears³ ².

Who Should Consider BOXX?

BOXX is designed for investors who:

Want a safe, cash-like investment with T-bill returns
Are in a high tax bracket and invest in a taxable account
Prefer to defer taxes and potentially pay lower rates
Don’t need regular income distributions
Are comfortable with a new, options-based ETF structure

Not ideal for:

Those who need FDIC insurance
Investors who want monthly or quarterly income
Anyone uncomfortable with options-based strategies, even if the risk is minimal² ³

How Safe Is BOXX? Understanding the Risks

While BOXX is engineered to be as safe as T-bills, there are some unique risks and considerations:

Complexity: BOXX’s box spread strategy is sophisticated. While the risk is low, it’s not zero—operational errors, counterparty risk, or regulatory changes could impact returns² ³.
Tax Law Changes: If the IRS or Congress changes the tax treatment of box spreads or options-based ETFs, BOXX’s main advantage could disappear².
Market Liquidity: BOXX has high trading volume and billions in assets, but during market stress, liquidity could be tested¹² ⁹.
Not FDIC-Insured: Like all ETFs, BOXX is not protected by FDIC insurance.

So far, BOXX has delivered on its promise, with performance and volatility closely matching T-bills¹² ¹⁴.

Frequently Asked Questions About BOXX ETF

What is a box spread?

A box spread is an options strategy that combines long and short positions in call and put options at different strike prices. The result is a nearly risk-free return that mimics a zero-coupon bond, with a fixed payout at maturity¹ ³.

How does BOXX generate its return?

BOXX buys box spreads on S&P 500 options (and some single-stock options), locking in a return that matches the risk-free rate (T-bill yield), minus expenses. The ETF structure allows for tax-efficient management of gains and losses³ ².

Is BOXX a good alternative to a money market fund?

For investors in high tax brackets with taxable accounts, BOXX can be a better choice due to its potential for long-term capital gains tax rates. For those in lower tax brackets or using tax-advantaged accounts, the benefit is less clear³ ².

Does BOXX pay dividends?

No. BOXX does not pay regular income distributions. All returns are reflected in the ETF’s rising share price, and gains are only realized when you sell your shares³ ⁶.

What are the fees?

BOXX charges a 0.19% annual expense ratio, which is competitive with other cash alternative ETFs and money market funds² ¹².

BOXX ETF: Recent Price and Performance Data

BOXX’s price has shown steady, low-volatility growth, as expected for a cash alternative. Here’s a snapshot from the past year:

Date	Price
May 2025	$111.93
Jan 2025	$110.77
Jul 2024	$108.30
Jan 2024	$105.52
Jul 2023	$102.74
Jan 2023	$100.45

Source: Digrin, Yahoo Finance, Investing.com⁵ ⁷ ⁹.

BOXX ETF: Key Takeaways

BOXX is a low-risk, cash alternative ETF that uses options to mimic T-bill returns.
Its main advantage is tax efficiency: returns are taxed as capital gains, not ordinary income.
Best for high-income investors in taxable accounts who want to defer and reduce taxes on their cash holdings.
Performance has closely tracked T-bills, with steady price appreciation and minimal volatility.
BOXX does not pay dividends; all returns are reflected in share price growth.

Should You Use BOXX for Your Cash?

If you’re looking to park cash for the short term, and you’re in a high tax bracket, BOXX is one of the most tax-efficient options available in 2025. It’s especially attractive if you don’t need regular income and want to control when you realize gains for tax purposes. However, if you value simplicity, FDIC insurance, or need monthly income, a traditional money market fund or high-yield savings account may be a better fit.

Final word:
BOXX is a smart, innovative solution for cash management in taxable accounts. Its unique box spread strategy and tax efficiency have made it a standout in the crowded world of cash alternative ETFs. Just make sure you understand how it works—and how it fits with your overall financial plan—before jumping in² ³ ¹².

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Summary:
BOXX ETF offers a compelling, tax-smart way to manage your cash in 2025. By using a box spread options strategy, it delivers T-bill-like returns with the potential for lower taxes—making it a top choice for savvy investors in taxable accounts. If you’re looking for a modern alternative to money market funds, BOXX deserves a closer look.

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