ETF Chart of the Day: Cash Storage

We do not often cover the “Money Market” space in ETFs, but find it wise to circle back to it time and again since there are constantly new fund offerings in the space and the segment has substantial assets under management and institutional interest.

SHV (iShares Barclays Short Treasury Bond Fund, Expense Ratio 0.15%) is the second largest fund in the space now behind PIMCO’s MINT (PIMCO Enhanced Short Maturity ETF, Expense Ratio 0.35%), but only by a relatively small margin ($3.7 billion in AUM versus about $3.3 billion).

SHV has been exceptionally active this week, as one can see on Monday of this week the fund traded more than 30 million shares (versus its ADV of about 2.07 million shares) and subsequently about $1.9 billion flowed out of the ETF via redemptions.

It is not worth reading into large liquidations in Money Market type ETFs, as it could simply be an institutional client using the funds to make a full allocation somewhere else, i.e. equities, longer term bonds, commodities, what have you. BIL (SPDR Barclays Capital 1-3 Month T-Bill ETF, Expense Ratio 0.13%) is also a hefty fund in the space with $1.2 billion in AUM, followed by GSY (Guggenheim Enhanced Short Duration ETF, Expense Ratio 0.28%) which now has about $494 million under management.

There are several smaller alternatives categorized in this space that draw some interest from time to time as well including PVI (PowerShares VRDO Tax-Free Weekly Portfolio, Expense Ratio 0.25%), ULST (SPDR SSgA Ultra Short Term Bond ETF, Expense Ratio 0.20%), and the smaller VRD (SPDR S&P VRDO Municipal Bond Fund, Expense Ratio 0.20%).

Both SHV and BIL average more than 2 million shares traded daily, while the other funds in this space MINT included generally trade on much lighter volume. It is important to note that none of the aforementioned funds is structured exactly like the next in this space, and the nuances from fund to fund may explain differences in expense ratios as well as ultimate strategy.