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MINT: The Time For Money Markets Is Now

Harrison Schwartz profile picture
Harrison Schwartz


  • With the yield curve flat-to-inverted, short-term bonds offer a much better risk-reward profile than long-term bonds.
  • The negative beta of long-term bonds can be enticing, but with inflation on the rise, potential drawdowns could be jarring.
  • The PIMCO enhanced maturity short-term bond ETF MINT has historically outperformed other money market ETFs and offers far more yield-for-risk than most fixed-income funds.
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Investors today are stuck in a difficult situation. Most invest in assets with high historical performance like stocks and long-term bonds which come with considerable downside risk, particularly if inflation continues to rise. Yields are generally though and risk is generally high, making for a poor investing environment.

While yields are low, the flatness of the yield curve brings safe opportunity in short-term bonds. The yield on a nearly risk-less one year bond is often the same as it is on an extremely volatile 20-year bond. One ETF investors may want to consider is the PIMCO Enhanced Short Maturity ETF which trades under the ticker (NYSEARCA:MINT).

Beating the Money Market

MINT is an ultra-low duration low-risk bond fund with an effective maturity of three months and an estimated yield-to-maturity of 1.56%. While such a yield is nothing to write home about, it is nearly equal to the highly volatile 20+ year Treasury ETF (TLT) which has a YTM of 1.65%. Even more, it is superior to that of the SPDR T-Bill ETF (BIL) which has a yield of around 1-1.25% following the recent emergency Fed cut.

In fact, MINT has outperformed all of its major peers (taken from the top AUM money market ETFs) over the past five years:

Obviously, there is no guarantee that such outperformance will continue, but the fact is that MINT has managed higher returns with less volatility than its peers.

A Look At MINT's Exposure and Strategy

Unlike many money-market funds, MINT takes a diversified approach that seeks to enhance returns while maintaining a very low level of risk. Currently, 65% of the fund is invested in the U.S and the remaining 35% is invested abroad in U.S-short-term debt.

Little of that debt is invested in U.S T-Bills. Currently, about a fifth is in

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This article was written by

Harrison Schwartz profile picture
Harrison is a financial analyst who has been writing on Seeking Alpha since 2018 and has closely followed the market for over a decade. He has professional experience in the private equity, real estate, and economic research industry. Harrison also has an academic background in financial econometrics, economic forecasting, and global monetary economics.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (23)

bullmoose62 profile picture
It appears that MINT dropped to levels never seen in the last decade, per the chart that I just pulled up this morning. Obviously no safe spaces left in this market. Trying to look at this calmly, that means that I have lost a little over a months worth of distribution in one day. Obviously in doing my research it appeared that MINT was somewhat of a safe haven, although I did not see the extreme market conditions we are experiencing.
@bullmoose62 - see my comment above. The achilles heel of these funds are how much crap debt they are holding (even though a lot of it is ultra short duration). When credit markets freak out as they are doing now, I felt like even the MINTs of the world were not fully immune. Yet the silver lining is they have not dropped down all that much (MINT is down $1 from the high). Compare that to S&P and be happy you had money in MINT instead!
BubbaJM profile picture
I agree with your article! ... Long term bonds are not "priced" in any way, shape, or form "attractively" to a sane investor... and very short term offers at at least some safety. However, it is difficult to sway those who believe strongly in the "greater fool" theory..... that these "long term" bonds paying under 2% are a good deal because down the road there will be people waiting for the opportunity to buy even lower paying long term yields. I can't necessarily say that those people will be eventually proven wrong, (as that may turn out to be the case).... just as I can't tell someone at a roulette wheel they will lose if they put all their chips on "red". They may in fact come out on top.... But I certainly wouldn't recommend doing that!
I think one could make the case of avoiding MINT and other similar constructed funds and just going straight to short duration US treasuries right now. That's what I did at least. Why? Because I am a bit spooked at how the entire BBB rated space is hanging off a cliff right now. Just a ton of very over levered corporations out there that have gorged on debt, and last I checked all these funds had some allocation to them (some more than others of course).

By going with a fund like BIL, you take a hit on yield but no worries at all from potential short term credit issues.
Alternative Investing profile picture
With the recent Fed cut mint will be paying didly squat
And your suggested alternative with a 10 year at 1% ??
Alternative Investing profile picture
- depends on your goal and your risk level for the amount of $/percent of your portfolio you had intended to invest in MINT. (or rainy day fund which is even more different ). If in your investment (tax deferred) portfolio then I might take 10-20 % (or whatever amount is required to reach the $ amount MINT was going to pay you) of targeted amount and invest in a monthly paying preferred CEF. Balance (80-90%) goes to money market or ???

In a taxable account same strategy but would put said amount in ETV ( 9% yield/near 90% ROC due to option writing approach which means you only pay your tax rate on @10% of that income, until the day you sell!)
Prior to FEd cut of .50 MINT was @ 1.8% and money markets like spaxx @ 1.2%....looking forward MINT may be @ 1%...tbd
been in MINT and JPST since may of 18. better than straight cash@0
Parked 50% of funds in MINT until conditions indicate a floor to buy some good stocks. Is there a site that consistently shows the interest rate of MINT? The PIMCO prospectus doesn't shed any light on changing interest rates.
I've always rotated in and out of QQQX and SPTL, depending on market momentum. I am in QQQX most of the time. I just recently sold and went into SPTL.
Thank you for the write up. I'm a couple years from calling it quits and having a call with my broker next week. Not about virus volitality; however about proper allocation due to my timeline. This gives me some good information about some of the fix options out there!
Dave Wo profile picture
I retired a few years back and have had a large part of savings in CD ladders. The end of 2018 I was able to roll a lot into CDs paying 3%+, but now there are hardly any paying more than 2%. Mint is a nice alternative that is paying about 2.5% and instantly liquid. So I have been rolling CD into MINT for a few months and has been good so far. GLTA
Decider profile picture
Instantly liquid but you could lose capital. Total Return % for MINT in 2014 and 2015 were 0.54% and 0.43% for the whole year. Depending when you sold during the year they could have been negative. None of these are Money Market Funds. At best, they are Ultra Short-Term Bond Funds and depending on your selling time frame could LOSE capital.
Take a look at VCIT. Pays around 3+%. Invst grade corporate bonds, low to med duration. It has been appreciating nicely as well.
TxGolfer57 profile picture
Thanks. What are your thoughts on NEAR vs MINT?
Decider profile picture
NEAR Total Return %
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD
— — — — 0.59 0.85 1.40 1.41 1.71 3.55 0.57
MINT Total Return %
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD
1.64 0.45 2.42 0.72 0.54 0.43 2.09 1.86 1.72 3.33 0.50
MAYHAWK profile picture
I park my cash in NEAR. Current 2.62% rate.
Alternative Investing profile picture
@MAYHAWK -you may want to look under the hood a little further
Based on the actual March distribution of $.096 and todays current price $50.35, that equates to @ 2.2% yield
Once the new FED cut of .50 "settles in" that yield I suspect will be well under 2%
Just fyi
A Pragmatic Investor profile picture
Although I do not agree with your recession prediction.
I believe $MINT is a good place to be (already there), for the near term.
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