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MINT: It's Still OK To Dip Into Corporate Bonds For Safety

Dave Dierking, CFA profile picture
Dave Dierking, CFA


  • As investors continue abandoning risky assets, most of the attention ends up focused on Treasuries.
  • Short-term, high quality corporate bonds, however, are still good though as a higher yielding safety alternative.
  • I put MINT up against NEAR and a money market fund to examine risk, composition, yield and portfolio fit.
  • If you want safety but are still looking for a higher yield, MINT is an ideal portfolio addition.

Investment Thesis

Last week's swift correction in equities saw investors abandoning virtually all risky assets, even low volatility stocks and gold. The only asset class posting solid returns was Treasuries. While government bonds are a natural landing spot in a rapid "flight to safety" environment, I want to make the case for why short-term investment-grade corporate bonds still make a good choice despite the recent risk-off pivot.


Last week's sudden market correction reminds us why it's important to have defensive portfolio positioning in mind, even when it seems like the Fed's money printing machine will cure all of our ills. While we can sometimes see an economic contraction coming down the road, black swan type events, such as the coronavirus, come with little warning but can have a big impact.

A few weeks ago, I wrote about the iShares Short Maturity Bond ETF (NEAR) and how it can be used as both a quasi-cash alternative in a portfolio or a diversification tool to round out long-term portfolio risk. It turned out to be one of my more popular articles in recent memory and the comment thread (more than 160 in all) brought up a number of similar fixed income ETFs that could serve a similar purpose.

The one I want to look at today is the PIMCO Enhanced Short Maturity Active ETF (NYSEARCA:MINT). Like NEAR, it focuses on investment-grade short-term corporate bonds of varying maturities that have an overall portfolio duration of less than one year. I find this duration range to be an ideal target for conservative fixed income investors since it provides a solid combination of above-average dividend yield at minimal additional risk.


MINT is an actively-managed ultra-short-term investment-grade corporate bond fund that aims to maintain an overall portfolio duration of less than one year. PIMCO itself

This article was written by

Dave Dierking, CFA profile picture
Editor of ETF Focus on TheStreet.com. On Substack at www.substack.com/etffocus. To receive notifications of new articles and blog posts as soon as they're published, click on the orange Follow button and become a real-time follower.

Analyst’s Disclosure: I am/we are long VMMXX. 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 (30)

HaroldRamis profile picture
Notice NEAR also too a bit of a haircut
HaroldRamis profile picture
Even if you lost a few cents , you're 1000% better off than those yield junkies in CEF's and high yield paper.

The touts here on PA that pimp those as safe, NEVER issue a sell signal
1% of the portfolio is $ET paper maturing 3/18. You can imagine how that did yesterday.

But yeah, sitting on a low bid yesterday morning paid off for someone.
HaroldRamis profile picture
Thanks, I knew this has some crap in it, and I sold it all Friday.

Recovered nicely today
HaroldRamis profile picture
recovered now, but they failed to maintain an orderly market today

if you NEEDED to sell this am you took a bad hit

wasnt even that huge a volume

market making in this was crap
Emerald profile picture
@Dave Dierking, CFA, if investors are looking for a cash equivalent fund with limited downside risk, I suggest MINT has the lowest duration risk (O.24%) of the many funds listed in the comments. Long: MINT
Dave Wo profile picture
I've had MINT for several months and the price drops each month at ex-div date, by about the value of the monthly dividend. So this month it did that. Subsequent days it has continued dropping, which is abnormal looking back for a year. Seems odd given that the Fed dropped rates, I would expect the opposite. Anyone have theories?
Dave Dierking, CFA profile picture
I'll copy the comment I mentioned elsewhere on this thread... I think it's a product of investors abandoning almost all risk assets that aren't U.S. Treasuries, even short-term investment-grade corporates. In panicky market moves like this, I'm not surprised to see even solid funds like MINT drifting down a bit.
Nice concise article. Is there a site that encompasses current yields & expenses? The PIMCO prospectus states a 2.5 yield...parking cash there for some good investment prospects later down this bumpy road.
Dave Dierking, CFA profile picture
I'm not aware of a site that keeps 30-day yields up to date. Lots of sites have TTM yields but those are even less useful now with rates so volatile.
Decider profile picture
My extensive cash management research led to the one and only FLTR (with a rare 5 star ranking from Morningstar : www.morningstar.com/... ). Far superior to all its peers, including MINT (4 stars), on all metrics, but with far less fanfare. Total Assets ≈ 500 Mil and growing.
FLTR is way down compared to the other instruments mentioned here
Dave Dierking, CFA profile picture
FLTR and FLOT could be at interesting entry points right here after the rate plunge.
HaroldRamis profile picture
dont quit your day job

FLTR took a nice hit Monday
DivvySam profile picture
To park money during this Shz Storm we are long MINT and GSY and looking at NEAR...
Dave Dierking, CFA profile picture
GSY is another good one.
Thank you for the update. It is good to know MINT upgraded the quality of bonds. PV shows JPST and ICSH have higher Sharp and Sortino ratios.
Dave Dierking, CFA profile picture
Yep, I'm watching JPST pretty closely too right now.
great article, Dave. MINT is not showing its steady climb up for the next monthly payment - instead it has actually shown weakness. NEAR started the climb and JPST is in steady climb (closer ex date). Do you feel this is related to the crazy move in TLT up (treasury rates plummeting)?
Dave Dierking, CFA profile picture
I think it's a product of investors abandoning almost all risk assets that aren't U.S. Treasuries, even short-term investment-grade corporates. In panicky market moves like this, I'm not surprised to see even solid funds like MINT drifting down a bit.
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