The industry has fervently lobbied against a floating NAV, arguing that it would cause investors to flee the funds, reports Kirsten Grind for the Wall Street Journal.
ETF observers, though, believe that bond funds could pick up where the money market leaves off. For instance, Fink expects investors will move away from prime money funds and into government funds the SEC enacts a floating NAV.
“I would say that money market reform is increasingly a matter of when and not if, and we feel like we’re well positioned to capitalize on this pending change when it becomes effective,” Bill Belden, Head of Product Development at Guggenheim Investments, said in an email. “Our Guggenheim Enhanced Short Duration Bond ETF (GSY) is an attractive alternative for strategic cash investments. GSY is not a money market fund, but it uses a low duration strategy in pursuit of its investment objective of attractive current income, consistent with preservation of capital and daily liquidity.”
Investors can take a look at short-duration bond ETFs options, including:
- PIMCO Enhanced Short Maturity Strategy (NYSEArca: MINT): effective duration 0.94 years; 0.65% 30-day SEC yield
- SPDR Barclays 1-3 Month T-Bill (NYSEArca: BIL): modified adjusted duration 0.12 years; -0.07% 30-day SEC yield
- iShares Barclays Short Treasury Bond (NYSEArca: SHV): effective duration 0.41 years; 0.01% 30-day SEC yield
- Guggenheim Enhanced Short Duration Bond (NYSEArca: GSY): average duration 0.37 years; 1.12% 30-day SEC yield
For more information on the money markets, visit our money markets category.
Max Chen contributed to this article.
