Cash Parking with Money Market and Short-Term Bond ETFs

Summary

The document considers where to hold cash intended for withdrawal within less than a year, with a preference for stable value and periodic income rather than exposure closely tied to the stock market. It raises money market exchange-traded funds as one possible instrument, then adds short-term bond ETFs as another option for investors willing to accept somewhat more duration risk in exchange for potentially higher yield.

The answers offer product examples but do not analyze their holdings, liquidity, distributions, fees, credit exposure, or historical price behavior. They also do not establish that these funds maintain a fixed price or guarantee monthly income. The discussion is therefore a brief comparison of money market funds and short-duration bond funds, not a tailored recommendation or a complete assessment of capital preservation for a specific withdrawal schedule.

Key ideas

• Money market ETFs are proposed as a possible place to hold cash with lower volatility.
• Short-term bond ETFs may offer more yield but bring greater duration risk.
• Dividend ETFs may expose a cash reserve to broader equity market movements.
• The discussion does not establish fixed value, guaranteed income, or suitability for a particular withdrawal plan.

Tags

# I need a low volatility asset that gives an interest/dividen


# I need a low volatility asset that gives an interest/dividen












I have some cash that needs to sit on an account for some time (less then a year, where I will withdraw an amount every month). I need them in a fixed price/low volatility asset that gives an interest every month or so. Any suggestions?

I looked into dividend ETFs, but they are highly correlated with SP500 and I don't want to be impacted by the stock markets movements.

Can you guys think of something?

Cheers TY

## Answer by Kiwiakos (score 0)

https://quant.stackexchange.com/a/27650

Have you looked at money market ETFs?

Something like Pimco's MINT http://finance.yahoo.com/quote/MINT

## Answer by nbbo2 (score 0)

https://quant.stackexchange.com/a/27651

In addition to money market ETFs already mentioned, have you considered short term bond ETFs like VGSH and VCSH? [This is what I use]. They offer a bit more yield, though admittedly at a slightly higher duration risk.

https://personal.vanguard.com/us/funds/snapshot?FundId=3142&FundIntExt=INT

https://personal.vanguard.com/us/funds/snapshot?FundId=3145&FundIntExt=INT

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.