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When Might Investors Use an Ultra-Short Bond ETF?

When Might Investors Use an Ultra-Short Bond ETF?
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Why Choose an Ultra-Short Bond Fund over a Money Market Fund?

Why Choose an Ultra-Short Bond Fund over a Money Market Fund?
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This ETF Has Gathered $500 Million in Assets in Just 6 Weeks

This ETF Has Gathered $500 Million in Assets in Just 6 Weeks May 26, 2021 With the threat of rising interest rates, fixed income investors are opting to shorten duration risk with ETFs like the Vanguard Ultra-Short Bond ETF (VUSB), which has amassed $500 million in assets in just six weeks. Bond portfolios containing longer duration debt are susceptible to rising interest rates, forcing investors to find alternatives. This is where ultra-short bonds can strike a balance between money market funds, which can’t offer higher yield, and short-term bond funds, which have higher duration risk. Furthermore, VUSB minimizes credit risk by focusing on more stable, high-quality debt issues.

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