However, Arvedlund points out that ETFs have fluctuating share prices, unlike money funds. [Investors Flock to Low-Duration ETFs for Rising Rate Protection]
“When comparing exchange-traded funds, look carefully at the management fees, whether there are any fee caps or waivers (which sometimes allow the fund company to charge the fee at a later date and recoup the money), what kind of dividend income it provides you, and any tax implications if you trade in and out of these ETFs frequently,” she writes. [Investors Buying High-Yield ETFs with Shorter Durations]
“If you want to avoid rising rates altogether, check out bank-loan funds. Investors fearful of rising rates are turning to the PowerShares Senior Loan ETF (NYSEArca: BKLN). Senior loans are high-yield bonds with floating rates, which removes interest-rate risk altogether,” the columnist added. [Bank Loan ETFs: Active or Passive?]
Full disclosure: Tom Lydon’s clients own BSV.