While mom-and-pop investors may be exempt from floating money funds, the SEC can still draw up provisions requiring investors to pay a withdrawal fee during times of stress or even face a hold on money. On Monday, the agency released a series of memos that showed empirical evidence for imposing redemption fees during volatile markets, which suggests the SEC is considering a combination of both floating share prices with curtailing redemptions during certain times.
Any changes in the money markets could support the growing fixed-income ETF market, notably ultra-short-duration bond funds as a cash alternative. For instance, the PIMCO Enhanced Short Maturity ETF (NYSEArca: MINT) has a 0.57% 30-day SEC yield and a 0.69 year effective duration. The Guggenheim Enhanced Short Duration Bond (NYSEArca: GSY) has an average 0.33 year duration and a 0.98% 30-day SEC yield. The iShares Short Treasury Bond ETF (NYSEArca: SHV) has an effective duration 0.36 year and a 0.07% 30-day SEC yield. The SPDR Barclays 1-3 Month T-Bill (NYSEArca: BIL) has an effective duration 0.09 year and a -0.08% 30-day SEC yield.
For more information on bonds, visit our bond ETFs category.
Max Chen contributed to this article.