Cash Alternative ETFs

As the concerns about approaching Europe austerity and the continuation of the debt problems there, many investors are looking for ways to reduce risk and add a level of safety to their portfolios. Gold has become a premier destination for safety, but some investors would like more. Cash is king, but there are ways to stay invested.

Investing in fixed income securities with maturities of less than one year, are called ultra-short term or micro-term bonds. These assets may be an attractive option for those wanting to managing volatility and stay invested. Micro-term bonds provide a level of flexibility and have had historically lower levels of volatility risk versus other bond strategies.

The PIMCO Enhanced Short Maturity Strategy (NASDAQ: MINT), SPDR Barclays Capital 1-3 Month T-Bill (NYSE: BIL) and Claymore U.S. Capital Markets Micro-Term (NYSE: ULQ) are ways to participate in cash alternative strategies. While the dividend yields are not great, these bonds can benefit in a rising rate environment as they are able to roll their holdings over quicker into higher yielding instruments.