(Editor's Note: The following is an edited excerpt of an article from February's edition of the Exchange-Traded Funds Report. Subscribers can read the full story here.)

As markets continue to slide, many advisers are suggesting that investors play it safe. In the world of fixed-income, that means staying on the short side of the duration curve to avoid the threat of rising interest rates.

There are two areas of bond investing that have seen large inflows this year: international bonds and domestic high yield, otherwise known as junk.

The table below displays the results for the international ETFs available in 2008:

These are good times for ETF bond investors.  For years the ETF market offered long and intermediate-term bond funds with just a few short-term and no ultrashorts or money market funds.  Within the last few years, however, there has been an awakening in the industry.  Many vendors are now expanding their offerings of short-term holdings. 

The importance of short-term holdings in one's fixed income portfolio is not to be underrated.  For a balanced portfolio, a fairly common allocation would allocate about 1/3 each to: (1) inflation-protected instruments, (2) intermediate-term and (3) short to ultrashort holdings.  Although there is no definitive answer as to how to allocate fixed income, equal weighting among the three I noted is an easy-to-implement strategy.  Of course, opinions vary widely.

By Murray Coleman

As a finance student at the University of Chicago exploring modern portfolio theory, Warren Schmalenberger wondered why current indexes didn't cover the entire efficient frontier.

IndexUniverse.com: You've been promoted. How have your responsibilities changed?

A reader asked about the Accessor Strategic Alternatives Fund (ASAFX) and left a link to the prospectus. It looks like 80% of the fund will go into assets that usually have a low correlation to global stock and bond markets. Sounds good to me but I do not know if the fund is trading, or what they own or much else. Not to be flip, but it will either be a viable absolute-ish type fund or not. I will add it to my watch list. I am all for learning about anything but there is never a rush to buy.

There were a couple of comments favorably disposed to the Claymore fund that owns it all (UEM) that I covered in my post last week. One reader made a point that I can certainly buy into (even if not ideal for what I try to do), which is that, used as a starting point, an investor could fill in the gaps around UEM and have more time to learn how better to fill in those gaps.

By now you know that Claymore just listed three ETFs that have the (kind of) brand name of Capital Markets. The broadest fund is the Capital Markets Index Fund (UEM) which takes in equities, fixed income and money market instruments. There are 9903 holdings in all (according to the Claymore website).

Slightly narrower are the Capital Markets Bond Index Fund (UBD) and the Capital Markets Micro Term Fixed Income Fund (ULQ).

If you were looking for a one-stop shop to get access to the U.S. capital markets via ETFs, it's here.

Yesterday, Claymore launched a group of Capital Markets ETFs on the American Stock Exchange:

The move to slice and dice the market is getting a new challenge. On Tuesday, three new exchange-traded funds [ETFs] are set to launch, each taking the total markets concept a step further.

The Claymore U.S.-1 Capital Markets Index ETF (AMEX: UEM) seeks to cover most investable stocks traded in America.