Effective today I will incorporate the Claymore Premium Money Market ETF (CMR) into a Canadian model (i.e. I will introduce a HXU/CMR model tonight). You can read about CMR on Claymore's site here. Here's how Claymore describes the ETF:
The fund invests primarily in high-quality, short-term (generally 90 days or less) debt securities, including treasury bills and promissory notes issued or guaranteed by Canadian governments or their agencies, bankers acceptances and commercial paper (excluding asset-backed commercial paper) issued by Canadian Chartered banks, loan companies, trust companies and corporations.
The Claymore Premium Money Market ETF will have one of the lowest expense ratios of any money market mutual fund in Canada. By providing a lower Management Fee, the fund can reduce risk in the underlying holdings, while generating attractive short-term income rate.
My rationale behind using a money market ETF is that there is no point in parking cash in a non-interest bearing account as is currently the case with the HXU/Cash model. Oddly enough, the money market ETF is available in Canada but there is no liquid equivalent in the US yet. Therefore my US models will continue to include a QLD/Cash entry.
The average volume of CMR traded daily is around 12,300 ($615,000). The Claymore Premium Money Market ETF is less than one year old (incepted on 02/19/08) so there are no performance results on Claymore's site yet. The management fee for this ETF is 0.25% and the current distribution rate is 2.67%.
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