Skip to Content
ETF Specialist

Innovative ETFs

Change is apace in the ETF industry. Here are some of the better ideas to have come out.

Mentioned: , , , , ,

Exchange-traded funds are no longer just index-trackers for Ma and Pa. The industry is undergoing its own Cambrian explosion, where every investing idea under the sun is being tried in the exchange-traded format, from hedge fund wanna-bes to quadruple-leveraged S&P 500-gold spread trading vehicles. Many won't survive, but the ones that have been thriving include kinds never seen before. We've assembled a list of newer ETFs that represent advances in the state of the art: Each fulfills a need that has never been truly satisfied before by ETFs or perhaps even by publicly investable vehicles. A word of caution: As fairly new funds, they have modest trading volume and should be bought and sold with limit orders.

 PIMCO Enhanced Short Maturity Strategy ETF (MINT)
Inception: 11/16/2009
AUM: $1.3 billion
Avg. 3-Month Volume: 157,028
Expense Ratio: 0.35%
Yield: 0.89%

PIMCO's actively managed MINT is meant to be a cash complement. Rule changes have made money markets more alike, pushing down yields in short, high-quality debts. There's potentially a lot of value just beyond the artificially delimited quality and maturity levels, and MINT's broad mandate exploits the gap. However, don't be lulled into thinking the fund is good as cash. MINT doesn't guarantee a fixed price level. In fact, most investors are better off in high-yield savings accounts, which are FDIC-insured and possibly higher yielding than MINT's below 1% yield. But if you've tapped out all the safe high-yield options and deal with big sums (think $100,000-plus), MINT may be an attractive complement to your cash allocation.

Samuel Lee does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.