- After a strong run over the last 12 months, these short-term Treasury ETFs are now yielding very close to zero.
- There’s little upside potential and little yield benefit over Treasury money market funds, which lock in your share price at $1.
- Are these ETFs a risky investment? No, they are fine. But the reward-versus-risk equation doesn’t look appealing.
Over the last year, as short-term interest rates dropped dramatically, a lot of investors poured money into short-term Treasury ETFs as a way to capture a yield advantage over a money market account, while retaining safety.
Unfortunately, those days are over.
Read my full analysis on SeekingAlpha.com
All investment grade bonds are yielding less than inflation. So what do you do with the money that you do not want to risk in the stock market?
You can use I Bonds to at least match official U.S. inflation. Otherwise, the choice comes down to 1) accept more risk, or 2) accept a slightly lower standard of living in the future.