There have been some new exchange traded funds (ETFs) added to the fixed income pool this year. The newest one also has the shortest duration. The SPDR Lehman 1-3 Month T-Bill (BIL) has a duration of 0.16 years, triple A credit quality rating and tracks the Lehman Brothers 1-3 Month U.S. Treasury Index.
The other two short-term fixed income ETFs are iShares Lehman 1-3 Year Treasury Bond (SHY) and Vanguard Short-Term Bond (BSV). SHY has been around five years and has $6 billion in assets. The duration is close to two years. BSV has a duration of 2.38 years and asses of $5.5 billion.
Zoe Van Schyndel in The Motley Fool reports short-term fixed income ETFs can be an inexpensive place to put some cash or earn some low-risk returns. As with any investment, make sure you understand what you are buying, how it fits in your portfolio.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.