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Ultra-Short Bond Fund

What is 'Ultra-Short Bond Fund'

A type of bond fund that invests only in fixed-income instruments with very short-term maturities. An ultra-short bond fund will ideally invest in instruments with maturities around one year. This investing strategy tends to offer higher yields than money market instruments, with less price fluctuations than a typical short-term fund.

Explaining 'Ultra-Short Bond Fund'

Ultra-short bond funds offer investors greater protection against interest rate risk than longer term bond investments. Since these funds have very low durations, increases in the rate of interest will affect their value less than a medium or long-term bond fund.

While this strategy offers more protection against rising interest rates, they usually carry more risk than most money market instruments. While certificates of deposits follow regulated investment guidelines, an ultra-short bond fund has no more regulation than a standard fixed-income fund.


Further Reading


The decomposition of US and Euro area stock and bond returns and their sensitivity to economic state variables
www.tandfonline.com [PDF]
… 2 ProShares Ultra Short QQQ ETF (SQQQ). 3 … That is, the bank should allocate some of the bank's own capital to these mortgages. This would serve as a bonding mechanism just like it does in the hedge fund industry … They enhance liquidity in the bond market and stock market …

Performance evaluation of liquid debt mutual fund schemes in IndiaPerformance evaluation of liquid debt mutual fund schemes in India
www.indianjournals.com [PDF]
… 2 ProShares Ultra Short QQQ ETF (SQQQ). 3 … That is, the bank should allocate some of the bank's own capital to these mortgages. This would serve as a bonding mechanism just like it does in the hedge fund industry … They enhance liquidity in the bond market and stock market …

Three Essays in Financial EconomicsThree Essays in Financial Economics
deepblue.lib.umich.edu [PDF]
… 2 ProShares Ultra Short QQQ ETF (SQQQ). 3 … That is, the bank should allocate some of the bank's own capital to these mortgages. This would serve as a bonding mechanism just like it does in the hedge fund industry … They enhance liquidity in the bond market and stock market …

Financial intermediation and the post-crisis financial systemFinancial intermediation and the post-crisis financial system
papers.ssrn.com [PDF]
… 2 ProShares Ultra Short QQQ ETF (SQQQ). 3 … That is, the bank should allocate some of the bank's own capital to these mortgages. This would serve as a bonding mechanism just like it does in the hedge fund industry … They enhance liquidity in the bond market and stock market …

The changing nature of financial intermediation and the financial crisis of 2007–2009The changing nature of financial intermediation and the financial crisis of 2007–2009
www.annualreviews.org [PDF]
… 2 ProShares Ultra Short QQQ ETF (SQQQ). 3 … That is, the bank should allocate some of the bank's own capital to these mortgages. This would serve as a bonding mechanism just like it does in the hedge fund industry … They enhance liquidity in the bond market and stock market …

A Financial Transactions Tax: The One Essential ReformA Financial Transactions Tax: The One Essential Reform
papers.ssrn.com [PDF]
… 2 ProShares Ultra Short QQQ ETF (SQQQ). 3 … That is, the bank should allocate some of the bank's own capital to these mortgages. This would serve as a bonding mechanism just like it does in the hedge fund industry … They enhance liquidity in the bond market and stock market …


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