Although short-duration bond ETFs have received more attention due to speculation over the SEC’s next move on money market funds, they are still a relatively small part of the overall ETF business.
“There are just 12 of them, with combined assets of $29 billion,” the WSJ reports. “BlackRock and Federated Investors have been granted an exemption by the SEC to offer ultrashort-term bond ETFs, while Charles Schwab has filed for an exemption.”
MINT, the PIMCO ETF, “addresses the niche ground between money-market funds and short-term bond funds,” said David Falkof, Mornignstar analyst, in the article.
However, Matthew Tucker, head of fixed-income strategy at BlackRock’s iShares ETF unit, warned that investors should recognize that there is more price variability in an ultrashort bond ETF, because it doesn’t come with a stable share price like a money market fund.
Investors “shouldn’t be confused,” Tucker said in the WSJ story. “They have to understand they’re taking some risk.”
PIMCO Enhanced Short Maturity Strategy