Risky assets are trembling as the Fed raises interest rates and reduces its balance sheet, luring money managers from all over the world to even the shortest-term debt.
One-month Treasury bills currently yield 2.75%, which is so high that Ray Dalio, the founder of Bridgewater Associates, tweeted that he no longer believes that “cash is trash” and that the short-term interest rate is “now about right.”
Read more: Defensive Canadian ETF investors snap-up cash-like products
A record amount of money has been invested in cash-like ETFs as a result of this mentality, and many of them are once again reliably paying out monthly dividends.
“For the first time since the global financial crisis, you can actually get paid something nominally for being in short-term bonds,” Dave Nadig, financial futurist at data provider VettaFi, stated. “So, cash seems reasonable, for the first time in a very long time.”
