“It’s front-end friendly,” Gross said in the Bloomberg article, referring to short-term securities. “Anything that is anchored to the policy rate — and the policy rate being something that probably is going to be 25 basis points for at least the next several years — anything that’s anchored to that will do well and had done well.”
In response to the changing rate environment, State Street and iShares recently launched actively managed ultra-short-term bond funds to help investors, including the SPDR SSgA Ultra Short Term Bond ETF (NYSEArca: ULST) and iShares Short Maturity Bond ETF(NYSEArca: NEAR). [State Street Introduces Short Term Bond ETF]
Previously, investors could choose from active short-term bond ETFs, the PIMCO Enhanced Short Maturity ETF (NYSEArca: MINT), which has a 0.51% 30-day SEC yield and 0.90 year effective duration, and the Guggenheim Enhanced Short Duration Bond (NYSEArca: GSY), which has a 0.20 year duration and 0.93% 30-day SEC yield.
Additionally, there a some passive index-based ETF options, like the iShares Short Treasury Bond ETF (NYSEArca: SHV), which has an effective duration 0.46 years and 0.00% 30-day SEC yield, and the SPDR Barclays 1-3 Month T-Bill (NYSEArca: BIL), which has an effective duration 0.14 years and -0.08% 30-day SEC yield.
For more information on bond funds, visit our bond ETFs category.
Max Chen contributed to this article.