The $1.04 billion SPDR Barclays 1-3 Month T-Bill ETF(NYSEArca: BIL) also garners an overweight rating from S&P Capital IQ.  In exchange for an ultra-low duration of just 0.11 years, investors will have to take on a slightly negative 30-day SEC yield with BIL.

S&P Capital IQ also rates the SPDR SSgA Ultra Short Term Bond ETF (NYSEArca: ULST) overweight. ULST also debuted in October and has an effective duration of just 0.42 years.

“Time will tell if ULST, with a recent $15 million in assets, can be as successful as BIL, but the former has a higher yield because its holdings are largely corporate bonds that have modestly higher credit risk. Approximately 60% of ULST’s assets are rated AA or A, whereas all of BIL’s are rated AAA. ULST’s 30-day SEC yield is 0.4%, but is higher that the slightly negative yield of BIL. Similar to SLQD, the bid/ask spread is not concerning to us, recently at $0.03,” said S&P Capital IQ.

iShares 1-3 Year Credit Bond ETF

Tom Lydon’s clients own shares of LQD.