Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
Head of Fixed Income Strategy
Money market funds are traditionally viewed as safe and stable, but they might not maximize returns in a falling-rate environment. Short-term bond ETFs offer higher yield potential, capital appreciation, and cost-efficiency—making them a better option to make your cash work harder in the months ahead.
Imagine strolling through the Stockville supermarket, pushing an empty cart, contemplating what to put in it. Right now, cash is the big buzzword in investing—everyone's talking about it, wise investors such as Warren Buffet hold onto it, and waiting for the perfect opportunity. But as savvy investors might say while eyeing the empty shelves, it’s not just about having cash; it’s about using the right tool to make that cash work harder. With so many options, choosing the right instrument is crucial. Do you park it in money market funds, or should you consider something with more potential, like short-term bond ETFs?
For investors looking to generate more income from their idle cash, short-term bond ETFs could be a smart alternative to traditional money market funds—especially as interest rates may soon start dropping. These ETFs offer the chance for higher yields and capital appreciation, making them a flexible, cost-effective way to maximize returns in today's shifting environment. As always, it’s essential to keep your goals and risk tolerance in mind when making the switch.
If you're considering short-term bond ETFs as an alternative to money market funds, here are a few solid options to explore:
These ETFs provide a flexible and cost-effective way to invest your cash, allowing you to take advantage of higher yield potential in a falling rate environment. For more inspiration and details on bond ETFs, visit this page.