Invesco Ultra Short Duration ETF (ARCA: GSY)

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Invesco Ultra Short Duration ETF

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The fund will invest at least 80% of its net assets in fixed income securities and in ETFs and closed-end funds that invest substantially all of their assets in fixed income securities. It uses a low duration strategy to seek to outperform the ICE BofA US Treasury Bill Index in addition to providing returns in excess of those available in U.S. Treasury bills, government repurchase agreements, and money market funds, while seeking to provide preservation of capital and daily liquidity. The fund is non-diversified.

BlackRock has submitted filings to introduce two new money market funds in ETF form on Thursday. These new offerings, named iShares Prime Money Market and iShares Government Money Market ETFs, will comply with the Securities and Exchange Commission's Rule 2a-7, ensuring high-quality ratings and minimal credit risk.
The move follows Texas Capital Bancshares Inc&#8216;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TCBI#NASDAQ">TCBI</a>) launch of the <a href="https://www.benzinga.com/etfs/new-etfs/24/09/41051634/theres-an-etf-that-pays-you-like-a-money-market-fund-it-just-started-trading">first 2a-7 ETF</a> in September. Financial Times<a href="https://www.ft.com/content/144ea1bc-b7b6-43e1-a8d3-c7f7df674c3e"> reported</a> on Thursday that both BlackRock funds will focus on securities with maturities of 397 days or less, maintaining a dollar-weighted average maturity of 60 days or fewer and a dollar-weighted average life of 120 days or fewer.
Details on the proposed ETFs' fees were not disclosed in the filings. Texas Capital's ETF charges a fee of 0.20%, while BlackRock's similar existing ETFs have lower fees, such as the iShares US Treasury Bond ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/GOVT#BATS">GOVT</a>) at 0.05% and the 0-3 Month Treasury Bond ETF at 0.09%.
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In September, BlackRock liquidated two open-end money market funds in response to upcoming SEC rule changes requiring liquidity fees for prime institutional funds.
The introduction of these ETFs by BlackRock comes amid a significant shift in the money-market industry. Recently, the $6.3 trillion money-market sector saw the launch of its first ETF, the Texas Capital Government Money Market ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MMKT#NYSE">MMKT</a>), which capitalizes on the surge in money-market funds driven by high short-term yields. This ETF offers investors a safe haven with competitive returns, providing intraday liquidity and the stability of traditional money-market funds.
Here&#8217;s how some of the existing money market fund ETFs have performed in the past year:
<ul>
<li>NEOS Enhanced Income 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CSHI#NYSE">CSHI</a>): The fund is managed by Neos Funds and holds $465 million worth of net assets. Its yearly return has been 5.72% compared to the category average of 6.51%.</li>
<li>Invesco Ultra Short Duration ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GSY#NYSE">GSY</a>): With net assets close to $2.23 billion, the ETF launched by Invesco seeks to provide returns in excess of cash equivalents and provide preservation of capital and daily liquidity. The average duration of maturity is less than a year. The yearly returns of the fund have been 6.76% while the category average is 6.51% and its three-year returns have been 3.62% against the category average of 3.49%. </li>
<li>PGIM Ultra Short Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PULS#NYSE">PULS</a>): This ETF is issued by PGIM Investments and has net assets close to $8.56 billion. It normally maintains a weighted average portfolio duration of one year or less and a weighted average maturity of three years or less. The fund&#8217;s returns in the past year have been 6.53% against the category average of 6.51% while its three-year return has been 4.33% against the category average of 3.49%.</li>
</ul>
Read Next: 
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<li><a href="https://www.benzinga.com/markets/cryptocurrency/24/11/41891221/peter-schiff-says-he-would-have-loaded-up-on-bitcoin-had-he-known-that-the-btc-bubble-would-get-this-big?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Peter Schiff Says He Would Have &#8216;Loaded Up&#8217; On Bitcoin Had He Known That The BTC Bubble Would &#8216;Get This Big&#8217;</a></li>
</ul>
Disclaimer: This content was partially produced with the help of&nbsp;<a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Benzinga Neuro</a>&nbsp;and was reviewed and published by Benzinga editors.
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After Texas Capital, BlackRock Files For Two New ETFs With Low Risk. Here's How Their Peers Fared In The Past Year

The Federal Reserve&#8217;s decision cut interest rates by 0.5% on Wednesday <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40943496/fed-rate-cut-eases-debt-refinancing-for-smaller-cloud-computing-firms-analyst-flags">may pull investors</a> away from money market funds and into longer duration bonds, according to a portfolio manager.
Total money market fund assets&nbsp;decreased by $20.02 billion to $6.30 trillion for a week ending on Wednesday, Sept. 18, the Investment Company Institute said. Among taxable money market funds, government funds&nbsp;decreased by $18.82 billion and prime funds decreased by $2.42 billion.&nbsp;
&#8220;Historically, we&#8217;ve seen more assets move into longer duration bonds when yields have fallen, and I think we&#8217;ve already seen some of that happen this year,&#8221; said Timothy Ng, a fixed-income portfolio manager with Capital Group.
&#8220;I expect this trend to continue as the Fed continues to cut rates,&#8221; he said.
Read Also: <a href="https://www.benzinga.com/real-estate/reit/24/09/40949753/mortgage-rates-near-6-demand-increases-for-refinancing-purchases">Mortgage Rates Near 6%, Demand Increases For Refinancing, Purchases</a>
&#8220;I think some of that flow will go into both equities and bonds, but in terms of relative scale, it will likely depend on the outlook for the economy, valuations and market sentiment between the two asset classes.&#8221;
A lot of assets moved into the money markets in recent years because money market yields were very attractive, but that may no longer be the case as the Fed plans to make further rate cuts this year, he said.
&#8220;Now you&#8217;re not getting as much yield waiting around, and you run the risk of missing out on capital appreciation that comes with having more duration in your portfolio as yields fall,&#8221; he said.
Price Action: Exchange-traded funds that hold money market funds gained slightly into Friday&#8217;s late-afternoon trading.
<ul id="mntl-sc-block_7-0">
<li>iShares Short Treasury Bond ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SHV#NASDAQ">SHV</a>) gained 0.05%</li>
<li>BlackRock Short Maturity Bond ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/NEAR#BATS">NEAR</a>) rose 0.06%</li>
<li>SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BIL#NYSE">BIL</a>) went up 0.044%</li>
<li>Invesco&nbsp;Ultra Short Duration ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GSY#NYSE">GSY</a>) picked up 0.07%</li>
</ul>
Read Now:
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</ul>
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Fed Rate Cut May Drive Investors Away From Money Markets, Says Portfolio Manager

For investors seeking momentum, Invesco Ultra Short Duration ETF (ARCA:GSY) is probably on the radar. The fund just hit a 52-week high and is up 1.1% from its 52-week low price of $49.61/share.&nbsp;
But are more gains in store for this ETF? Let&#39;s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
<h3>GSY in Focus</h3>
Invesco Ultra Short Duration ETF is an actively managed fund that seeks to provide returns in excess of cash equivalents while also seeking to provide preservation of capital and daily liquidity. It has years to maturity of 1.36 and an effective duration of 0.66 years. Invesco Ultra Short Duration ETF charges 23 bps in annual fees.
<h3>Why the Move?</h3>
The short-term corner of the Treasury market has been an area to watch lately, given the current stock market volatility. The recent batch of data showed weakening labor markets and a slump in manufacturing that spurred recession concerns and battered global stock markets, compelling investors to hoard cash. As such, the appeal for cash-like ETFs has been on the rise as investors seek to mitigate the risk of a decline in the stock market.
<h3>More Gains Ahead?</h3>
Currently, GSY might continue its strong performance, given its weighted alpha of 0.77 and a low 20-day volatility of 1.67%, per barchart.com.
<a href="https://www.zacks.com/stock/news/2321373/ultra-short-term-bond-etf-gsy-hits-new-52-week-high?cid=CS-BENZ-FT-etf_news_and_commentary-2321373">To read this article on Zacks.com click here.</a>

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