Investors may want to consider an actively managed ETF from bond giant Pimco that’s designed as an alternative to low-yielding money market funds, analysts say.
In today’s nervous climate, investors are seeking safety over performance. For example, exchange traded funds that invest in U.S. Treasuries have surged, taking yields to historic lows. Bond prices and yields move in opposite directions.
About $1 billion flowed into SPDR Barclays Capital 1-3 Month T-Bill (NYSEArca: BIL) over the past three weeks, reports Jessica Toonkel for Reuters. The fund has been flat most of the year.
Yet analysts point out that the Pimco Enhanced Short Maturity Fund (NYSEArca: MINT) may have been overlooked. It is an alternative to money market funds, according to the story. Mint has returned 1.21% over the past year, and is the first actively managed ETF to have garnered $1 billion in assets. [PIMCO Looks to Expand ETF Presence]
“I understand that there is a flight to quality and people are looking for safe haven assets, but why would you pay for something that is yielding less than zero?” said Dave Nadig, research director at Index Universe, on Reuters.
MINT is free to invest in higher yielding areas of the market, such as the 58% it allocated to corporate bonds at the end of July. [ETF Spotlight: MINT]
“We continue to hear from investors–whether it’s financial advisors or private wealth managers–that they aren’t going very far out on the curve,”said Anthony Rochte, senior managing director at State Street Global Advisors, a division of State Street Corp., in the Reuters story. “Safety right now is paramount.”
Pimco Enhanced Short Maturity Fund
