Money Market ETF’s

Posted by Investored.ca

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A fund that chooses investments based on a market index or sector. ETFs trade on a stock exchange. They are not actively managed, so costs tend to be lower than regular mutual funds.

The fund objectives or a Money Market ETF are,

  • To preserve the value of your investments
  • To provide current income and liquidity consistent with short-term money market rates

The fund invests primarily in high-quality, short-term (generally 90 days or less) debt securities, including treasury bills and promissory notes issued or guaranteed by Canadian governments or their agencies, bankers acceptances and commercial paper (excluding asset-backed commercial paper) issued by banks, loan companies, trust companies and corporations.

The Money Market ETF will have one of the lowest expense ratios of any money market mutual. By providing a lower Management Fee, the fund can reduce risk in the underlying holdings, while generating attractive short-term income rate.

Benefits of Money Market ETF

  • Potentially efficient and convenient solution for utilizing cash balances in portfolio or between trades
  • Focus on high quality assets (no asset backed securities)
  • Tight bid-offer spreads and intra-day liquidity
  • High transparency – know exactly what securities in portfolio each day