MINC – Under the Hood
The Fed’s zero interest rate policy has driven traditionally riskless assets (government bonds) and near riskless assets (CDs, money market funds, etc.) down to historic lows. Subsequently, our Investment Committee saw the need for a product that offered investors the opportunity to generate a higher level of income relative to a CD or money market fund, but at the same time keep the risk as low as possible. As a result, our Investment Committee handpicked portfolio managers & exchange-traded fund (ETF) providers to create MINC.
MINC is an ETF that holds a selective portfolio of bonds with low duration, high quality, and active management. Think of MINC as a short-term bond fund. MINC is designed to return a rate closer to inflation without exposing an investor to too much risk. Investments that do not deliver a rate of return higher than inflation, currently at 2.3%, lose purchasing power. At this moment in time, CDs and money market funds return far below inflation so these products will lose purchasing power of the cash invested each year until interest rates rise substantially.
Investors with excess cash in CDs and money market funds are excellent candidates for MINC. Read this week’s Thought of the Week to learn more about MINC and how integrate it into your portfolio.
Click Here for the Weekly Thought As an Investment Advisory Representative working in conjunction with Global Financial Private Capital (GFPC) we are provided weekly thoughts on what is happening in the economy and the market. Written by our investment committee at GFPC we find these thoughts to be informative and interesting.