WealthManagement.com writes "Cashing in on Ultra-Short Bond Funds." The website asks, "With yields on sweep accounts, money-market funds and savings accounts stuck near historical lows, what's an adviser to do in trying to garner more income for clients out of their cash reserves?" They explain, "Ultra-short-term bond funds -- those with bonds of maturities three years or less -- are one option." The piece comments, "The average sweep account yield was only 0.14 percent as of March 23 for accounts of $100,000, according to Crane Data, with money-market yields averaging 1.24 percent. And savings accounts averaged a yield of only 0.09 percent as of March 30, according to Bankrate. Meanwhile, ultra-short-term bond funds had an average yield to maturity of 2.2 percent, as of March 27, according to Morningstar Direct. Morningstar counts 91 ultra-short-term bond funds (including ETFs) in total, with combined assets of $162 billion." The article adds, "But you and your clients must understand that while ultra-short bond funds are less risky than their longer-term brethren, they are riskier than money-market funds. That's because when short-term interest rates rise, such as now, the share price of an ultra-short bond fund falls, potentially wiping out the yield."

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