The Wall Street Journal writes "Ultrashort Bond Funds: Are They Ultrasafe?". The article says, "With short-term interest rates remaining locked near zero, yield-starved investors have been to "ultrashort" bond funds as a safe place to stash their cash. Attracted by yields on ultrashort funds ranging mostly between 0.2% and 1.3%, investors shifted $9.6 billion into the group during the first seven months of 2013, according to Morningstar Inc. Fund companies, meanwhile, have been rolling out new offerings, including ultrashort exchange-traded bond funds. These funds, which invest in bonds typically maturing in less than one year, are likely to suffer smaller losses than other bond funds when interest rates rise. Yet investors need to remember that they can lose money; they're not a money-market substitute. And within the group there's a range of strategies carrying different risks. Some investors with a long memory may recently have gotten a reminder of how ultrashort bond funds can fail to protect investor money: Last month, Charles Schwab Corp.'s fund unit filed with regulators to offer a series of ultrashort ETFs. The Schwab YieldPlus mutual fund lost 35% during the financial crisis in 2008."

Email This Article




Use a comma or a semicolon to separate

captcha image

Daily Link Archive

2024 2023 2022
March December December
February November November
January October October
September September
August August
July July
June June
May May
April April
March March
February February
January January
2021 2020 2019
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2018 2017 2016
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2015 2014 2013
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2012 2011 2010
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2009 2008 2007
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2006
December
November
October
September