March 22, 2021: Ultra Short Term Bond ETF Portfolio As A Money Market Fund

by | Mar 23, 2021 | Asset-Allocation, Bonds, Economy, Feature, Gold, Headline, Income, Inv, Investments, IRA, Markets, Mutual-Funds, newsletter, Portfolios, Retirement

 

Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

Regular AAC (Asset Allocation Composite), SAA and TAA portfolios are always rebalanced on the first trading day of a month. the next re-balance will be on Thursday April 1, 2021. 

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Ultra Short Term Bond ETF Portfolio As A Money Market Fund

Last week, we discussed how to make your own private bank. In the newsletter, we mentioned that, in addition to our MPIQ ETF Fixed Income portfolio, one can utilize some ultra short term bond ETFs to form a short term portfolio that can be used for cash needed within a year. In this newsletter, we introduce this portfolio and examine its returns and risk in details. 

Portfolios for your short term investments

To recap, in the previous newsletter, we stated that one can break its fixed income investments into 3 parts: 

  • 0-3 month cash: Money market funds: the safest (in our opinion, almost the same as cash) are Treasury money market funds. Other higher paying money market funds are prime money market funds that might invest in short term corporate loans/bonds. 
  • 3-12 month cash: Ultra short term ETFs or mutual funds: ultra short term Treasury ETFs like BIL or SHY or just short term ETF like MINT or NEAR etc. We will introduce some ultra short term and money market fund style fixed income portfolios soon. 
  • cash needed from 1 year to 5 or 6 years: MyPlanIQ fixed income portfolios like MPIQ ETF Fixed Income  or Schwab Total Return Bond (see fixed income page  ) that can be used for cash not needed within one year. 

We have discussed and monitored our Total return bond fund portfolios listed on fixed income page  for more than a decade now. These portfolios have consistently outperformed even the best total return bond funds such as PIMCO total return bond fund (PTTAX), Doubleline total return bond fund (DLTNX) etc. We encourage readers who are interested in fixed income (bonds) investments to read the relevant newsletters on our Newsletters page. 

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