With most savings accounts paying little to nothing these days, finding a convenient and low cost place to park cash for a short (or even long) amount of time can be difficult to do.
Finding funds that are highly liquid and act as cash is a difficult task - many such funds have higher than average MERs due to increased costs relating to higher liquidity levels.
One good fund for investors looking for liquidity and a very good MER (this fund charges just 0.35% annually) is the PIMCO Enhanced Short Maturity ETF.
This fund invests in extremely high quality securities which carry a relatively high margin of safety. The fund's duration is less than one year, providing protection with respect to interest rate related risk that other intermediate term bond funds carry.
Additionally, this fund is selective with the types of securities held - the management team overseeing this fund has purposely avoided higher volatility sectors to gain maximum yield with minimum risk.
The amount of liquidity this fund provides given the price (which is not cheap by any means) is, in my opinion, a very good deal for investors looking to park cash for any period of time.
In general, exchange traded funds are excellent places to hide when seeking liquidity, and this fund is no exception. As with any investment, be sure to talk to a financial advisor before making any decisions.
Invest wisely, my friends.
