“The calculus is starting to change on risk sensitivity with Treasury bills at 2 percent,” Gennadiy Goldberg, strategist at TD Securities, told Bloomberg. “It’s changing the way investors look at markets.
Investors who are seeking money fund substitutes may look to actively managed, ultra-short duration bond ETFs that are more free to adapt holdings in a shifting market environment.
For example, investors can look to the PIMCO Enhanced Short Maturity ETF (NYSEArca: MINT), Invesco Enhanced Short Duration Bond (NYSEArca: GSY), SPDR SSgA Ultra Short Term Bond ETF (NYSEArca: ULST) and iShares Short Maturity Bond ETF(NYSEArca: NEAR). Potential investors should be aware that these active ultra-short-term bond ETFs include corporate debt exposure with some lower quality investment-grade debt exposure, which may have contributed to their relatively higher yields.
Additionally, investors can look at conservative short-duration Treasury bond ETFs like BIL, along with the iShares Short Treasury Bond ETF (NYSEArca: SHV).
For more information on the fixed-income markets, visit our bond ETFs category.