Barron's Best Income Investments
Barron's writes about "The Best Income Investments for a Low-Rate World and briefly mentions money funds and ultra-short bond funds. The article explains, "Given the narrow rate differential between short- and long-term bonds, there's a good argument for staying short. Money-market fund yields have fallen below 2%, as the Fed has cut short rates by a half-percentage point this year, to a range of 1.75% to 2%. An additional rate reductions by the central bank is likely later this year, and one more is expected in 2020. That could drop money-fund yields to 1.5% by early 2020." The piece comments, "Among the short-term bond funds that offer higher yields are Pioneer Multi-Asset Ultrashort Income (MAFRX), which has a yield of nearly 3%, and Pimco Low Duration Income (PFIAX), with 3.5%. Both have large investments in mortgage securities. JPMorgan Ultra-Short Income(JPST) and Pimco Enhanced Short Maturity Active(MINT) are large ETFs that yield about 2.5% and are heavy in corporate debt." Barron's adds, "For more risk-wary investors, there is the iShares 1-3 Year Treasury Bond exchange-traded fund (SHY), which yields 2.1%.... Warren Buffett favors ultrasafe Treasury bills for Berkshire Hathaway's cash hoard of more than $120 billion. Investors who want to follow Buffett can buy T-bills directly through the TreasuryDirect website, or purchase the iShares Short Treasury BondETF (SHV), which holds Treasuries with less than a one-year maturity. This low-volatility fund yields about 2%. It's a good alternative to money-market funds."
