Global X has launched a cash alternative ETF in the US providing exposure to US Treasury bills at the very front end of the yield curve.
As of 20 June, the 3-month US T-bill was yielding 5.14%.
The Global X 1-3 Month T-Bill ETF (CLIP US) has been listed on NYSE Arca with an expense ratio of 0.07%.
Global X notes that short-term interest rates have risen significantly in recent months, creating a sharply inverted yield curve – as of 20 June, the 3-month US Treasury bill was yielding 5.14%.
During such periods of elevated interest rates, short-term Treasuries can be a compelling alternative to cash positions, offering investors significant income with low interest rate or credit risks.
Rohan Reddy, Director of Research at Global X ETFs, said: “Global X’s launch of CLIP offers an attractive option for investors seeking to maintain flexibility during this uncertain macroeconomic environment. This product leverages our expertise in income-based solutions to help provide clients and advisors with critical access to the front end of the Treasury curve.”
The fund is linked to the Solactive 1-3 month US T-Bill Index which covers Treasury bills issued by the US government that have a remaining maturity of at least one month but less than three months. Constituents are weighted by market value outstanding, and the index is rebalanced on a monthly basis.