Others, including the U.S. Chamber of Commerce, warn that the changes in the structure of the money market funds could cut off a major supply of short-term funding for corporations, Bloomberg reports.
With the additional rules tacked onto money market funds, more investors and institutions could turn to ultra-short-duration bond ETFs to park their cash. For instance, the actively managed PIMCO Enhanced Short Maturity ETF (NYSEArca: MINT) has a 0.52 year duration and a 0.51% 30-day SEC yield, and Guggenheim Enhanced Short Duration Bond (NYSEArca: GSY) has a 0.46 year duration and a 1.07% 30-day SEC yield. More recent additions to the space include the SPDR SSgA Ultra Short Term Bond ETF (NYSEArca: ULST), which has a 0.19 year duration and a 0.30% 30-day SEC yield, and iShares Short Maturity Bond ETF(NYSEArca: NEAR), which has a 0.94 year duration and a 1.11% 30-day SEC yield.
These active ETFs include a diversified mix of ultra-short-duration corporate and Treasury bonds in an attempt to provide greater income and total return than money market funds and short-duration T-Bills.
Alternatively, investors can look at conservative short-duration Treasury bond ETFs, such as the iShares Short Treasury Bond ETF (NYSEArca: SHV), which has an effective duration 0.37 years and 0.07% 30-day SEC yield, and the SPDR Barclays 1-3 Month T-Bill (NYSEArca: BIL), which has a 0.11 year duration and a -0.10% 30-day SEC yield. [Rising Rate Preparation With Short-Term Bond ETFs]
For more information on the fixed-income market, visit our bond ETFs category.
Max Chen contributed to this article.