If you’ve been frustrated by low yields in money markets, a relatively new type of exchange traded fund (ETF) might be appealing to you.
Frustration with low yields on cash is evident in the popularity of one fund in particular: PIMCO Enhanced Short Maturity Strategy Fund (NYSEArca: MINT) has grown to nearly $800 million in assets in little more than a year. John Spence for MarketWatch reports that this ETF is actively managed and is considered an alternative for return on an investment with no evident cash needs. [Most Investors Don’t Know ETFs.]
ETFs can’t call themselves money market funds, explains Murray Coleman for Barron’s. Rules in the Investment Company Act of 1940 make it a virtual nightmare for a fund making trades throughout the day to comply with Rule 2a-7. [An ETF Solution to the Corporate Cash Problem.]
Coleman suggests other ETFs in addition to MINT:
- SPDR Barclays Capital 1-3 Month T-Bill ETF (NYSEArca: BIL)
- SPDR S&P VRDO Municipal Bond ETF (NYSEArca: VRD)
- PowerShares VRDO Tax-Free Weekly Portfolio (NYSEArca: PVI)
- Claymore U.S. Capital Markets Micro-Term (NYSEArca: ULQ)
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.