Money Fund Equivalents

The market is embracing a short maturity ETF as exchange traded funds bid to compete with money market mutual funds.

John Spence writes that the Pimco Enhanced Short Maturity Strategy Fund (MINT) has added more than $800 million in assets in a little more than a year.  The fund invests in government bonds, mortgages and corporate debt, typically with a duration of under 0ne year.

Spence points out one important difference between an ETF and a money-market fund — MINT and other ETFs have a floating net asset value, so investors can see a loss of principal.

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