Beyond Money Market Funds: Alternative Short-Term Investment Opportunities

Ultra-short-duration bond funds seek to improve on the strategy underlying money market funds. By holding a variety of fixed income instruments with very short average durations in a fund structure, investors may be able to achieve higher yields from the current market environment than they typically could in a money market fund, albeit with little additional volatility and limited sacrifice of liquidity. Although this strategy is designed to improve on current cash management options, most investors would likely consider it a complement to–rather than a replacement for–a bank account or money market fund.