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A MONEY-MARKET SUBSTITUTE
Your strategy was sound, but so far the outcome is less than satisfying. You put cash for your short-term needs into a money-market fund or savings account--safe, secure, but paying you a meager 1 to 3 percent interest. For longer-term goals, you invested in bond funds--bigger payoff, but you could get clobbered by even the anticipation of short-term interest-rate hikes.
Time to get acquainted with the ultrashort-term bond mutual fund. It can spiff up returns a bit on your cash holdings or provide some respite from interest-rate swings for fixed-income investments. Or both.
What they are. Ultrashort funds invest in ...