Best Money Market Alternative ETFs to Park Your Cash

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With rates near zero, it’s hard to find a decent place to park idle cash. Most brokers are only offering 0.01% yields on money market or cash sweep programs.

Some are paying nothing at all. Even high-yield savings accounts have dropped to 0.50% or less. 

Inflation is eating away at your cash, and there is no safe return. This is what low rates do–they push people to spend and invest. 

But what if you can’t take on the risk of the stock market? Or maybe you’re looking for a short-term place for your money. If you fit this description, there are some options (Just don’t expect high yields.)

Short-term bond exchange-traded funds offer an alternative to money markets and high-yield savings accounts. They’ve become a popular tool for managing money in trading accounts. 

We’ve put together a list of the best cash-like ETFs. Each one has a better than nothing return with relatively low-risk. 

Best Money Market ETFs

JPMorgan Ultra-Short Income ETF 

Ticker: JPST | Expense Ratio: 0.18% | Yield (TTM): 1.49%

JPST has a five-star Morningstar rating. The ETF holds a mix of corporate bonds and short-term US Treasury Notes. Totals assets are 15.2 billion, and its average trading volume is 2.51M.

Its 52-week low is $46.02, and its 52-week high is $50.88. The March 2020 crash resulted in a 9.03% drawdown. 

PIMCO Enhanced Short Maturity Active ETF 

Ticker: MINT | Expense Ratio: 0.36% | Yield (TTM): 1.45%

MINT has a five-star gold star Morningstar rating. The fund is actively managed, hence the higher expense ratio. Its holding consists of US Treasury bills, Federal mortgage bonds, and high-grade corporate bonds. Total assets are 14.4 billion, and its average trading volume is 996k. 

Its 52-week low is $96.77, and its 52-week high is $102.04. The March 2020 crash resulted in a 5.06% drawdown.

iShares Short Treasury Bond ETF

Ticker: SHV | Expense Ratio: 0.15% | Yield (TTM): 0.90%

SHV has a two-star Morningstar rating. The fund holds short-term US Treasury notes and bills. Total assets are 18.4 billion, and its average trading volume is 2.15M.

Its 52-week low is $110.12, and its 52-week high is $112.99. The March 2020 crash resulted in an upside spike of about 2.25%.

iShares Ultra Short-Term Bond ETF

Ticker: ICSH | Expense Ratio: 0.08% | Yield (TTM): 1.46%

ICSH has a two-star Morningstar rating. The fund holds a mix of mid-to high-grade corporate bonds and some Federal mortgage bonds. Total assets are 4.9 billion, and its average trading volume is 829k.

Its 52-week low is $47.91, and its 52-week high is $50.60. The March 2020 crash resulted in a 5.05% drawdown. 

iShares 0-5 Year Investment Grade Corp Bond ETF

Ticker: SLQD | Expense Ratio: 0.60% | Yield (TTM): 2.46%

SLQD has a four-star Morningstar rating. It’s holding are a mix of short-term investment-grade corporate bonds. Total assets are 2.1 billion, and its average trading volume is 269k.

Its 52-week low is $43.34, and its 52-week high is $52.30. The March 2020 crash resulted in a 16.17% drawdown.

How Safe Are Short-Term Bond ETFs?

You can see that the ETFs holding corporate bonds fared the worst during the March crash of 2020. JPST and SLQD being the worst-performing. However, all of them recovered significantly along with most of the market. 

ETFs holding primarily US Treasury notes went up during the crash. Investors usually flock to Treasuries during market crashes. 

There is no risk-free investment in the stock market. US Treasuries are the closest thing to being risk-free but have the worst yields. 

Final Thoughts

It’s hard to find a place for cash with rates so low. This doesn’t necessarily mean you should just buy stocks. If you need the money within the next 5-years, then it’s best to keep it out of the market. 

These money market alternative ETFs offer a bit of return for your idle cash. There are many others to choose from outside of these five. We selected these based on liquidity, holdings, and yields. 

Having a mix of these short-term bond ETFs will help diversify your cash holdings.

If you are not willing to deal with any type of risk and don’t mind transferring money out of your brokerage, then a high-yield savings account is your best choice.