1-3 year treasuries are near where they were at the trough in 2008. Current payouts are boosted by bills purchased in the past three years, it's going to be opposite if rates rise in the future. Given the small payout, I'll keep the money in cash so I'm ready in case of a major market dump.
I'd definitely be moving to money market...look at all bond funds...its a bubble, and its gonna blow. Can't believe morons are moving to the bond market thinking its safe...only a full fledged, certifiable moron would do that.
If this fund holds nothing but short term gov't paper, when rates begin to rise, it will consistently be buying new, higher yielding paper, while letting its holdings mature at par. I'm not sure why there's any volatility at all (besides dividend payouts) since ETF's are open ended, as opposed to a closed-end fund whose price fluctuates based on supply and demand for the shares. If I am wrong about any of this, please tell me/explain my error. thanx.