Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

Picking The Right Money Market ETF

Thu, Jan 28, 4:16 PM ET, by Michael Johnston

As interest in ETF investing has surged in recent years, issuers have rushed to expand their product lines into every corner of the investable universe. The first generation of ETF products consisted mostly of equity funds designed to track well-known benchmarks, and while the vast majority of ETF assets remains in these “plain vanilla” funds, innovation in the industry has brought countless asset classes and investment strategies within the reach of all levels of investors. After initially using ETFs alongside stocks and mutual funds, many investors have now embraced all-ETF portfolios, utilizing a range products to accomplish investment objectives. ETFdb Pro members can access our line of all-ETF model portfolios, including both long-term buy-and-hold allocations and shorter-term themed strategies (if you’re not an ETFdb Pro member yet, sign up for a free trial or read more here).

As investors expand the role ETFs play in their portfolios, several money market ETFs have popped up and become quite popular. These funds offer investors a way to put cash to work in a variety of low risk, short-term securities, including commercial paper, repurchase agreements, Treasury bills, and certificates of deposit. The advantages to money market ETFs are numerous: they generally offer higher interest rates than bank CDs and charge far lower expense ratios than money market mutual funds. Moreover, they make regular monthly interest payments and provide a level of diversification that most investors would be unable to achieve on their own.

Investors looking for a money market ETF have plenty of options. The funds profiled below are similar in many ways, but also feature some key differences in expenses, duration, and diversity of holdings. For more head-to-head comparisons of ETF options, sign up for our free ETF newsletter.

Money Market ETFs
TickerIssuerExpense RatioSEC 30 Day YieldDuration52-Week Return
USYWisdomTree0.25%0.02%0.380.44%
ULQClaymore0.27%n/a0.29-0.08%
SHViShares0.15%0.14%0.27-0.15%
BILState Street0.13%-0.08%0.100.04%
MINTPIMCO0.35%0.65%0.81n/a
PVIPowerShares0.25%0.19%7 day reset-0.08%
VRDState Street0.20%0.12%7 day resetn/a

WisdomTree U.S. Short-Term Government Income Fund (USY)

This actively-managed ETF invests in a portfolio of short-term government securities including U.S. Treasuries, securities issued by government sponsored enterprises (such as Federal Home Loan Bank, Fannie Mae, and Freddie Mac), and government-sponsored corporate bonds as well as repurchase agreements backed by government securities. As of January 2010, about 53% of USY’s assets were government bonds, with the remainder of holdings including corporate bonds (28%), repurchase agreements (15%), and Treasury Bills (5%). USY seeks to maintain an average portfolio maturity of six months or less.

Claymore U.S. Capital Markets Micro-Term Fixes Income ETF (ULQ)

This ETF tracks an index that includes micro-term (i.e., those with a redemption date of less than one year) U.S. Treasury fixed income securities, micro-term U.S. federal agency and other government sponsored entities fixed income securities, micro-term investment grade U.S. corporate fixed income securities, commercial paper, bankers acceptances, large time deposits, and U.S. federal agency discount notes.

iShares Barclays Short Treasury Bond Fund (SHV)

The index underlying this ETF is designed to measure the performance of public obligations of the U.S. Treasury that have a remaining maturity between one and 12 months. SHV is one of the cheapest money market ETF options, but offers less diversification in its holdings by investing primarily in Treasuries.

SPDR Barclays Capital 1-3 Month T-Bill ETF (BIL)

This ETF is designed to replicate the performance of an index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be fixed rate and non convertible. With an expense ratio of just 13 basis points, BIL is the cheapest money market-like ETF option.

PIMCO Enhanced Short Maturity Strategy Fund (MINT)

This ETF isn’t technically a money market fund, but may be interesting option for investors looking to park cash in a low risk vehicle. MINT is an actively-managed ETF that seeks greater income and total return potential than money market funds, and may be appropriate for non-immediate cash allocations. MINT invests in short duration investment grade debt securities, including government debt and mortgage-related securities.

PowerShares VRDO Tax-Free Weekly Portfolio (PVI)

This ETF also isn’t really a money market fund, but presents another short-term, low risk option. Variable rate demand obligations (VRDOs) are actually long-term floating-rate bonds. But investors have the option to put VRDOs back to an investment dealer whenever the yield is reset, which is typically on a monthly basis. Generally, interest from VRDOs is exempt from federal income taxes, and often is exempt from state and local income taxes for residents of the issuing state.

SPDR S&P VRDO Municipal Bond ETF (VRD)

This ETF is similar in many respects to PVI, offering investors exposure to VRDOs through an ETF structure. The assets held by VRD also have a seven-day reset feature, giving these long-term debt instruments characteristics commonly found in short-term money market vehicles. See a closer look at VRDO ETF investing in this feature.

International Money Market ETF Options

Global 1-Month Deposit Rates
Euro0.3%
Japan0.0%
New Zealand2.7%
China-0.7%
Brazil6.3%
India5.5%
South Africa6.8%
Emerging Currency Basket3.0%
Source: WisdomTree.com as of 1/22/2010

In addition to the ETFs profiled above that offer exposure to money markets in the U.S., there are now a handful of ETFs that are designed to deliver returns reflective of money market rates in various countries available to foreign investors. International money market rates, particularly those in emerging markets, can often be considerably higher than domestic returns.

These funds are also subject to currency risk, meaning that they will generally lose value when the dollar appreciates and gain when the greenback weakens. ETFs offering exposure to international money market rates include:

  • WisdomTree Dreyfus Euro Fund (EU)
  • WisdomTree Dreyfus Japanese Yen Fund (JYF)
  • WisdomTree Dreyfus New Zealand Dollar Fund (BNZ)
  • WisdomTree Dreyfus Chinese Yuan Fund (CYB)
  • WisdomTree Dreyfus Brazilian Real Fund (BZF)
  • WisdomTree Dreyfus Indian Rupee Fund (ICN)
  • WisdomTree Dreyfus South African Rand Fund (SZR)
  • WisdomTree Dreyfus Emerging Currency Fund (CEW)

Disclosure: No positions at time of writing.


SDI Glossary: "Bond" Definition
SDI Glossary: "CD" Definition
SDI Glossary: "ETFs" Definition
SDI Glossary: "iShares" Definition
SDI Glossary: "Money" Definition
SDI Glossary: "Option" Definition
SDI Glossary: "Short" Definition
SDI Glossary: "Treasury Bills" Definition
SDI Glossary: "Yield" Definition
This Article's Word Cloud:   Dreyfus   ETFs   Fund   MINT   Short   This   Treasury   VRDO   VRDOs   WisdomTree   also   assets   bonds   corporate   debt   designed   feature   federal   fixed   funds   government   grade   have   including   income   index   interest   investment   investors   less   many   market   maturity   money   months   more   offer   option   portfolios   rate   rates   repurchase   risk   securities   short   sponsored   term   than   that   their

| More

St Jude Medical Takes Over #112 Spot From EQT
Fri, Aug 28, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

DVY, CME, KMB, CLX: Large Outflows Detected at ETF
Fri, Aug 28, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: DVY, CME, KMB, CLX Exchange traded funds (ETFs) trade just ...

VCR, F, TWC, TGT: Large Outflows Detected at ETF
Fri, Aug 28, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: VCR, F, TWC, TGT Exchange traded funds (ETFs) trade just ...

RSP, CB, TE, CCE: ETF Outflow Alert
Fri, Aug 28, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: RSP, CB, TE, CCE Exchange traded funds (ETFs) trade just ...

VGK: ETF Outflow Alert
Fri, Aug 28, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: VGK Exchange traded funds (ETFs) trade just like stocks, but ...

Utilities Select Sector SPDR Fund Experiences Big Inflow
Fri, Aug 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XLU, NEE, D, SO Exchange traded funds (ETFs) trade just ...

GDX, GG, FNV, NEM: Large Inflows Detected at ETF
Fri, Aug 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: GDX, GG, FNV, NEM Exchange traded funds (ETFs) trade just ...

JNK: Large Outflows Detected at ETF
Fri, Aug 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: JNK Exchange traded funds (ETFs) trade just like stocks, but ...

14.7% of FRAK Holdings Seeing Recent Insider Buys
Fri, Aug 28, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Unconventional Oil & Gas ETF (FRAK) ...

LMT a Top 25 Dividend Giant With $2.51B Held By ETFs
Fri, Aug 28, 8:34 AM ET, by ETF Channel

Lockheed Martin Corp. (LMT) has been named as a Top 25 ''Dividend Giant'' by ETF ...

Google Takes Over #2 Spot From Berkshire Hathaway
Thu, Aug 27, 12:14 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

IEI: Large Inflows Detected at ETF
Thu, Aug 27, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IEI Exchange traded funds (ETFs) trade just like stocks, but ...

IVW, NKE, BIIB, KMI: Large Outflows Detected at ETF
Thu, Aug 27, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IVW, NKE, BIIB, KMI Exchange traded funds (ETFs) trade just ...

Vanguard Total Bond Market ETF Experiences Big Inflow
Thu, Aug 27, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: BND Exchange traded funds (ETFs) trade just like stocks, but ...

DGRW, AAPL, MO, MCD: Large Inflows Detected at ETF
Thu, Aug 27, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: DGRW, AAPL, MO, MCD Exchange traded funds (ETFs) trade just ...

RTH Crosses Above Key Moving Average Level
Thu, Aug 27, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the Retail ETF (RTH) crossed above their 200 day ...

10.6% of FAB Holdings Seeing Recent Insider Buys
Thu, Aug 27, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the First Trust Multi Cap Value AlphaDEX ...

Why Analog Devices is a Top Socially Responsible Dividend Stock (ADI)
Thu, Aug 27, 9:24 AM ET, by ETF Channel

Analog Devices, Inc. (ADI) has been named a Top Socially Responsible Dividend Stock by Dividend ...

NextEra Energy a Top 25 Dividend Giant With 3.03% Yield (NEE)
Thu, Aug 27, 9:24 AM ET, by ETF Channel

NextEra Energy Inc (NEE) has been named as a Top 25 ''Dividend Giant'' by ETF ...

Cincinnati Financial a Top Ranked SAFE Dividend Stock With 3.5% Yield (CINF)
Thu, Aug 27, 9:24 AM ET, by ETF Channel

Cincinnati Financial Corp. (CINF) has been named to the Dividend Channel ''S.A.F.E. ...

Shares of STIP Now Oversold
Wed, Aug 26, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares 0-5 Year TIPS Bond ETF (STIP) entered ...

IBMG Makes Notable Cross Below Critical Moving Average
Wed, Aug 26, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iBonds Sep 2018 AMT-Free Muni Bond ETF (IBMG) ...

IEF Makes Notable Cross Below Critical Moving Average
Wed, Aug 26, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares 7-10 Year Treasury Bond ETF (IEF) crossed ...

MBB: Large Outflows Detected at ETF
Wed, Aug 26, 12:34 PM ET, by ETF Channel

Symbols mentioned in this story: MBB Exchange traded funds (ETFs) trade just like stocks, but ...

VNQI, BOXC, FENG, XIN: ETF Inflow Alert
Wed, Aug 26, 12:34 PM ET, by ETF Channel

Symbols mentioned in this story: VNQI, BOXC, FENG, XIN Exchange traded funds (ETFs) trade just ...

VWOB: ETF Inflow Alert
Wed, Aug 26, 12:24 PM ET, by ETF Channel

Symbols mentioned in this story: VWOB Exchange traded funds (ETFs) trade just like stocks, but ...

IWB, DIS, UNH, WMT: Large Outflows Detected at ETF
Wed, Aug 26, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: IWB, DIS, UNH, WMT Exchange traded funds (ETFs) trade just ...

PSQ: ETF Inflow Alert
Wed, Aug 26, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: PSQ Exchange traded funds (ETFs) trade just like stocks, but ...

UPRO: ETF Inflow Alert
Wed, Aug 26, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: UPRO Exchange traded funds (ETFs) trade just like stocks, but ...

VEA, ATE, HQCL, MFD: Large Inflows Detected at ETF
Wed, Aug 26, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: VEA, ATE, HQCL, MFD Exchange traded funds (ETFs) trade just ...

HD a Top 25 Dividend Giant With $4.85B Held By ETFs
Wed, Aug 26, 10:34 AM ET, by ETF Channel

Home Depot Inc (HD) has been named as a Top 25 ''Dividend Giant'' by ETF ...

Shares of REZ Now Oversold
Tue, Aug 25, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Residential Real Estate Capped ETF (REZ) entered ...

XLV, GILD, AGN, AMGN: Large Outflows Detected at ETF
Tue, Aug 25, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: XLV, GILD, AGN, AMGN Exchange traded funds (ETFs) trade just ...

VCSH: Large Inflows Detected at ETF
Tue, Aug 25, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: VCSH Exchange traded funds (ETFs) trade just like stocks, but ...

Vanguard Long-Term Corporate Bond ETF Experiences Big Inflow
Tue, Aug 25, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: VCLT Exchange traded funds (ETFs) trade just like stocks, but ...

XHB, TPX, USG, OC: ETF Inflow Alert
Tue, Aug 25, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: XHB, TPX, USG, OC Exchange traded funds (ETFs) trade just ...

ACWI, JNJ, JPM, GE: ETF Inflow Alert
Tue, Aug 25, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: ACWI, JNJ, JPM, GE Exchange traded funds (ETFs) trade just ...

Apple a Top Socially Responsible Dividend Stock With 2.0% Yield (AAPL)
Tue, Aug 25, 9:14 AM ET, by ETF Channel

Apple Inc (AAPL) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, ...

Why Apple is a Top 25 Dividend Giant (AAPL)
Tue, Aug 25, 9:14 AM ET, by ETF Channel

Apple Inc (AAPL) has been named as a Top 25 ''Dividend Giant'' by ETF Channel, ...

Shares of PBE Now Oversold
Mon, Aug 24, 4:14 PM ET, by ETF Channel

In trading on Monday, shares of the PowerShares Dynamic Biotechnology & Genome Portfolio ETF (PBE) ...

iShares U.S. Aerospace & Defense Getting Very Oversold
Mon, Aug 24, 4:14 PM ET, by ETF Channel

In trading on Monday, shares of the iShares U.S. Aerospace & Defense ETF (ITA) entered ...

PowerShares Aerospace & Defense Portfolio Getting Very Oversold
Mon, Aug 24, 4:14 PM ET, by ETF Channel

In trading on Monday, shares of the PowerShares Aerospace & Defense Portfolio ETF (PPA) entered ...

EWD Crowded With Sellers
Mon, Aug 24, 4:14 PM ET, by ETF Channel

In trading on Monday, shares of the iShares MSCI Sweden ETF (EWD) entered into oversold ...

FSZ Crosses Critical Technical Indicator
Mon, Aug 24, 3:54 PM ET, by ETF Channel

In trading on Monday, shares of the First Trust Switzerland AlphaDEX Fund ETF (FSZ) entered ...

Shares of XBI Now Oversold
Mon, Aug 24, 3:54 PM ET, by ETF Channel

In trading on Monday, shares of the SPDR S&P Biotech ETF (XBI) entered into oversold ...

Shares of IYR Now Oversold
Mon, Aug 24, 3:54 PM ET, by ETF Channel

In trading on Monday, shares of the iShares U.S. Real Estate ETF (IYR) entered into ...

First Trust United Kingdom AlphaDEX Fund (FKU) Enters Oversold Territory
Mon, Aug 24, 3:54 PM ET, by ETF Channel

In trading on Monday, shares of the First Trust United Kingdom AlphaDEX Fund ETF (FKU) ...

McGraw Hill Financial Achieves #102 Analyst Rank, Surpassing PVH
Mon, Aug 24, 1:44 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

EWU: ETF Outflow Alert
Mon, Aug 24, 12:44 PM ET, by ETF Channel

Symbols mentioned in this story: EWU Exchange traded funds (ETFs) trade just like stocks, but ...

XLI Crowded With Sellers
Mon, Aug 24, 12:44 PM ET, by ETF Channel

In trading on Monday, shares of the Industrial Select Sector SPDR Fund ETF (XLI) entered ...

  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

Picking The Right Money Market ETF | Self Directed Investor | Copyright © 2008 - 2015, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of serious individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.