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

IXP Crosses Above Key Moving Average Level
Thu, Feb 26, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the iShares Global Telecom ETF (IXP) crossed above their ...

Tractor Supply Achieves #96 Analyst Rank, Surpassing TE Connectivity
Thu, Feb 26, 12:14 PM ET, by ETF Channel

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

Vanguard Value ETF Experiences Big Inflow
Thu, Feb 26, 11:14 AM ET, by ETF Channel

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

VEA, KOSS, MFD, EZCH: ETF Inflow Alert
Thu, Feb 26, 11:14 AM ET, by ETF Channel

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

UPRO, ACT, ADBE, ADT: Large Outflows Detected at ETF
Thu, Feb 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: UPRO, ACT, ADBE, ADT Exchange traded funds (ETFs) trade just ...

TQQQ, ATVI, AKAM, ALXN: ETF Outflow Alert
Thu, Feb 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: TQQQ, ATVI, AKAM, ALXN Exchange traded funds (ETFs) trade just ...

IEI: ETF Outflow Alert
Thu, Feb 26, 10:54 AM ET, by ETF Channel

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

IRV Makes Bullish Cross Above Critical Moving Average
Thu, Feb 26, 10:54 AM ET, by ETF Channel

In trading on Thursday, shares of the SPDR S&P International Materials Sector ETF (IRV) crossed ...

18.5% of XBI Holdings Seeing Recent Insider Buys
Thu, Feb 26, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SPDR S&P Biotech ETF (XBI) shows ...

Why Cincinnati Financial is a Top 25 SAFE Dividend Stock (CINF)
Thu, Feb 26, 8:14 AM ET, by ETF Channel

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

NextEra Energy a Top 25 Dividend Giant With 2.97% Yield (NEE)
Thu, Feb 26, 8:14 AM ET, by ETF Channel

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

EGRW Makes Bullish Cross Above Critical Moving Average
Wed, Feb 25, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI Emerging Markets Growth ETF (EGRW) crossed ...

MSCI Argentina Breaks Above 200-Day Moving Average - Bullish for ARGT
Wed, Feb 25, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the MSCI Argentina ETF (ARGT) crossed above their 200 ...

GWL Crosses Above Key Moving Average Level
Wed, Feb 25, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR S&P World ex-US ETF (GWL) crossed above ...

See How AT&T Ranks Among Analysts' Top Dow 30 Picks
Wed, Feb 25, 12:14 PM ET, by ETF Channel

A study of analyst recommendations at the major brokerages shows that AT&T Inc (T) is ...

Vanguard Dividend Appreciation ETF Experiences Big Outflow
Wed, Feb 25, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: VIG, OXY, EOG, EMR Exchange traded funds (ETFs) trade just ...

XLE, XOM, CVX, SLB: ETF Inflow Alert
Wed, Feb 25, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: XLE, XOM, CVX, SLB Exchange traded funds (ETFs) trade just ...

Utilities Select Sector SPDR Fund Experiences Big Outflow
Wed, Feb 25, 11:24 AM ET, by ETF Channel

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

LQD: Large Inflows Detected at ETF
Wed, Feb 25, 11:14 AM ET, by ETF Channel

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

MXI Makes Bullish Cross Above Critical Moving Average
Wed, Feb 25, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Global Materials ETF (MXI) crossed above their ...

VO: Large Inflows Detected at ETF
Wed, Feb 25, 11:14 AM ET, by ETF Channel

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

iShares Short Treasury Bond ETF Experiences Big Inflow
Wed, Feb 25, 11:14 AM ET, by ETF Channel

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

Why Analog Devices is a Top Socially Responsible Dividend Stock (ADI)
Wed, Feb 25, 8:14 AM ET, by ETF Channel

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

Home Depot Inc a Top 25 Dividend Giant With 2.02% Yield (HD)
Wed, Feb 25, 8:14 AM ET, by ETF Channel

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

ALB Named Top 25 SAFE Dividend Stock Increasing Payments For Decades
Wed, Feb 25, 8:14 AM ET, by ETF Channel

Albemarle Corp. (ALB) has been named to the Dividend Channel ''S.A.F.E. ...

PIE Crosses Above Key Moving Average Level
Tue, Feb 24, 4:34 PM ET, by ETF Channel

In trading on Tuesday, shares of the PowerShares DWA Emerging Markets Momentum Portfolio ETF (PIE) ...

FDD Makes Bullish Cross Above Critical Moving Average
Tue, Feb 24, 4:34 PM ET, by ETF Channel

In trading on Tuesday, shares of the First Trust STOXX European Select Dividend Index Fund ...

Celgene Achieves #40 Analyst Rank, Surpassing American Tower
Tue, Feb 24, 12:14 PM ET, by ETF Channel

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

SCPB Crosses Above Key Moving Average Level
Tue, Feb 24, 11:34 AM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR Barclays Short Term Corporate Bond ETF (SCPB) ...

iShares Global Clean Energy (ICLN) Shares Cross Above 200 DMA
Tue, Feb 24, 11:34 AM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Global Clean Energy ETF (ICLN) crossed above ...

VDE, KMI.WS, APC, PSX: ETF Inflow Alert
Tue, Feb 24, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VDE, KMI.WS, APC, PSX Exchange traded funds (ETFs) trade just ...

Sempra Energy a Top Socially Responsible Dividend Stock With 2.5% Yield (SRE)
Tue, Feb 24, 8:14 AM ET, by ETF Channel

Sempra Energy (SRE) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, ...

Why United Bankshares is a Top 25 SAFE Dividend Stock (UBSI)
Tue, Feb 24, 8:14 AM ET, by ETF Channel

United Bankshares, Inc. (UBSI) has been named to the Dividend Channel ''S.A.F.E. ...

Why Altria Group is a Top 25 Dividend Giant (MO)
Tue, Feb 24, 8:14 AM ET, by ETF Channel

Altria Group Inc (MO) has been named as a Top 25 ''Dividend Giant'' by ETF ...

See How Microsoft Ranks Among Analysts' Top Dow 30 Picks
Mon, Feb 23, 12:14 PM ET, by ETF Channel

A study of analyst recommendations at the major brokerages shows that Microsoft Corporation (MSFT) is ...

Union Pacific Achieves #32 Analyst Rank, Surpassing Western Digital
Mon, Feb 23, 12:14 PM ET, by ETF Channel

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

SCC Crowded With Sellers
Mon, Feb 23, 11:34 AM ET, by ETF Channel

In trading on Monday, shares of the ProShares UltraShort Consumer Services ETF (SCC) entered into ...

EFZ: ETF Outflow Alert
Mon, Feb 23, 11:24 AM ET, by ETF Channel

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

SSO, MMM, ABT, ACN: Large Outflows Detected at ETF
Mon, Feb 23, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: SSO, MMM, ABT, ACN Exchange traded funds (ETFs) trade just ...

SPHD, POM, PPL, TE: Large Inflows Detected at ETF
Mon, Feb 23, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: SPHD, POM, PPL, TE Exchange traded funds (ETFs) trade just ...

SPLV, VNO, MAC, TRV: ETF Outflow Alert
Mon, Feb 23, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: SPLV, VNO, MAC, TRV Exchange traded funds (ETFs) trade just ...

iShares Core MSCI EAFE Shares Cross Above 200 DMA
Fri, Feb 20, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the iShares Core MSCI EAFE ETF (IEFA) crossed above ...

PIZ Crosses Above Key Moving Average Level
Fri, Feb 20, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the PowerShares DWA Developed Markets Momentum Portfolio ETF (PIZ) ...

Delta Air Lines Achieves #1 Analyst Rank, Surpassing CBRE Group
Fri, Feb 20, 11:54 AM ET, by ETF Channel

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

SDS: ETF Inflow Alert
Fri, Feb 20, 10:54 AM ET, by ETF Channel

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

UCO: Large Outflows Detected at ETF
Fri, Feb 20, 10:54 AM ET, by ETF Channel

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

SPDR S&P Retail ETF Experiences Big Outflow
Fri, Feb 20, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: XRT, CONN, RAD, NFLX Exchange traded funds (ETFs) trade just ...

EMLC: ETF Outflow Alert
Fri, Feb 20, 10:54 AM ET, by ETF Channel

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

ERX: Large Outflows Detected at ETF
Fri, Feb 20, 10:54 AM ET, by ETF Channel

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

15.2% of FXZ Holdings Seeing Recent Insider Buys
Fri, Feb 20, 9:34 AM ET, by ETF Channel

A look at the weighted underlying holdings of the First Trust Materials AlphaDEX Fund (FXZ) ...

Related videos | all videos »
  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 over 1000 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.