Cash Is King: Money-Market ETFs in Focus

Group 1 - The stock market outlook is uncertain, with a weak labor market prompting Federal Reserve officials to consider interest rate cuts [1][2] - Federal Reserve Governor Michelle Bowman suggested that three interest rate cuts may occur this year due to concerns about the job market and the overall economy [1][2] - San Francisco Fed President Mary Daly echoed the sentiment, indicating potential interest rate cuts in response to a weakening labor market despite inflation pressures from tariffs [2] Group 2 - Volatility in the market is expected due to various factors, including inflation spikes, tariff tensions, fears of a slowdown in China, and geopolitical issues [3] - Money-market-based exchange-traded funds (ETFs) may benefit from current uncertainties, as they have lower interest rate risks [4] Group 3 - Shorter-duration money market instruments are currently yielding more than longer-duration ones, with the one-month U.S. Treasury note yielding 4.48% compared to the 10-year note at 4.27% [5] - Focus is shifting to ultra-short-term bond ETFs, which are expected to gain, including MINT, NEAR, ICSH, and SGOV, with annual yields of 4.91%, 4.73%, 4.83%, and 4.44% respectively [6] Group 4 - The effective durations of these ETFs are low, with ICSH at 0.56 years, NEAR at 1.96 years, MINT at 0.25 years, and SGOV at 0.11 years, which helps mitigate interest rate risks [7]