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There are now also money market ETFs, i.e. funds that are passively based on a reference interest rate. They are usually slightly cheaper than active funds. “But the supply isn’t great,” says Glow. “Investors should therefore note how large the investment volume of the ETF is.” The smaller the fund, the less frequently its shares are traded. And the wider the spread, the difference between the buy and sell price.
Editor’s note: In the first version of this text there were inaccuracies in the comparison between money market funds and call money. We have clarified the information on returns from money market funds.
This post first appeared in February 2023. It has been updated and republished.
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