A New Ultra-Short Duration Bond ETF as a Liquid Cash Alternative | ETF Trends

Aware Asset Management has partnered up with Tidal ETF Services to launch its first exchange traded fund, an ultra-short duration bond strategy to help investors access a liquid cash alternative to preserve capital.

On Tuesday, Aware Asset Management launched the actively managed Aware Ultra-Short Duration Enhanced Income ETF (NYSEArca: AWTM), which has a 0.23% expense ratio.

“We developed this ETF as an alternative to earnings credits, commercial paper, and money market funds,” John Orner, President and CIO, said in a note. “We believe we have built a liquid, diversified, cost-effective solution that seeks to preserve capital while maximizing current income.”

AWTM tries to achieve a gross yield of 0.75% to 1.00% over the most recently issued 3-month U.S. Treasury Bill Yields. Specifically, the ETF invests in U.S. dollar-denominated investment-grade fixed-income and floating-rate bonds. The fund may include instruments issued by both U.S. and non-U.S. (including emerging markets) government and private sector issuers, including asset-backed securities, according to the fund prospectus.

“Generating high returns with low risk is our objective. To succeed, we focus on the risk,” Orner added. “We see great opportunity for investors at the short end of the yield curve, especially since the current flat yield curve fails to offer incentive to increase durations.”