Seeking Yield? Consider Adding an Ultra-Short Income ETF to the Mix

By Richard D. Steinberg via

In today’s rising interest rate environment, managing your clients’ need for income can be challenging and extremely frustrating. Money market yields have been hovering at close to zero for a long time, and no matter what market analysts may predict, no one knows for certain when the situation will change. As a result, advisors have to work harder than ever to squeeze out some level (any level!) of yield. It’s one of the many perils of an ultra-low-yield environment but, luckily, it’s one that can be battled.

I confess that as a planning-based money manager, I take a consistently active approach to managing assets. But whether your approach is active or passive, it’s a fact that you need a wide variety of investment vehicles to address the needs of a diverse client base and the demands of a fast-changing market. Plus, with interest rates likely to rise over the next two years, you have your work cut out for you—especially if, like me, you have no interest in stretching for yields.

So what’s the answer? There’s no silver bullet, but one tool that I feel has added an important arrow to our quiver recently is an actively managed, ultra-short-duration ETF designed to provide income while maintaining low volatility of principal.

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