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Schwab Readying ETFs as Money-Fund Alternatives


Top money market fund manager Charles Schwab (SCHW) has filed to launch ultrashort-duration bond ETFs as the nearly $3 trillion money market industry faces SEC reform measures.

Late last week, Schwab filed a registration statement to list three active bond ETFs that would provide alternatives to money market funds, Ignites.com reports.

The planned funds are Schwab TargetDuration 2-Month ETF, Schwab TargetDuration 9-Month ETF and Schwab TargetDuration 12-Month ETF. Fees have not been determined yet, according to the filing.

“The market for active ETFs continues to evolve, and as a sponsor, it’s important for us to maintain flexibility in order to remain relevant in the ETF space for the long term,” a Schwab spokeswoman told Ignites. [Ultra-Short-Duration Bond ETFs as a Cash Alternative]

PIMCO Enhanced Short Maturity (MINT) has been a popular ETF lately as a money fund substitute. Guggenheim Enhanced Short Duration Bond (GSY) is another ETF in the category. [PIMCO Short-Duration ETF Tapped as Money-Fund Substitute]

Ultrashort-duration ETFs have found interest from investors worried about potential stricter rules for money market funds. Also, some investors are using them as cash-like holdings but with a bit of extra yield.

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