A New Ultra-Short Duration Bond ETF as a Liquid Cash Alternative | Page 2 of 2 | ETF Trends

Aware Asset Management has experience overseeing investments for Blue Cross & Blue Shield of Minnesota and rolled out the ultra-short duration bond ETF for insurers and other treasurers whom are seeking to streamline cash management, Bloomberg reports.

“We focus on preserving investment capital and maintaining that appropriate liquidity,” John Kaprich, one of the new fund’s managers, told Bloomberg. “Our job is to ensure that claims are met.”

The new active ETF could also help bond investors navigate a changing interest rate environment as the ultra-short duration diminishes the fund strategy’s rate risk exposure – duration is a measure of a bond fund’s sensitivity to changes in interest rates and a lower duration corresponds with lower rate risk.

“AWTM offers the opportunity for attractive yields in a diversified basket and has less exposure to interest rates due to its ultra-short duration, which we define as less than 1 year. Moreover, the active management provides fixed income investors with the opportunity to outperform and enables portfolio managers to quickly respond to changing market conditions. We also see AWTM as a potential alternative to commercial paper for treasury managers with greater liquidity due to its exchange-traded structure,” Kaprich said.

For more information on new fund products, visit our new ETFs category.