Schwab Files for Govt Money Mkt ETF
It looks like we'll soon have a fourth "money market" ETF offering. A new Form N-1A Registration filing for the Schwab Government Money Market ETF (SGVT) tells us, "The fund intends to operate as a government money market fund under the regulations governing money market funds. The fund will invest at least 99.5% of its total assets in cash, U.S. government securities and/or repurchase agreements that are collateralized fully by cash and/or U.S. government securities; under normal circumstances, at least 80% of the fund's net assets (including, for this purpose, any borrowings for investment purposes) will be invested solely in U.S. government securities including repurchase agreements that are collateralized fully by U.S. government securities (excluding cash). With respect to the 80% policy, the fund will notify its shareholders at least 60 days before changing the policy." It explains, "Although the fund intends to operate as a 'government money market fund', it will not seek to maintain a stable net asset value ('NAV') per share nor will it use the amortized cost method of valuation. Instead, the fund will calculate its NAV per share based on the market value of its investments. In addition, unlike a traditional money market fund, the fund operates as an exchange traded fund ('ETF'). As an ETF, the fund's shares will be traded on the [NYSE Arca] exchange and will generally fluctuate in accordance with changes in NAV as well as the relative supply of, and demand for, shares on the [NYSE Arca]. You could lose money by investing in the fund. Because the share price and NAV of the fund will fluctuate, when shares are sold on the [NYSE Arca] (or redeemed, in the case of an Authorized Participant), they may be worth more or less than what was originally paid for them." Schwab adds, "The fund is an actively managed ETF fund and therefore does not seek to replicate the performance of any specific index." For more, see these Crane Data News articles: "BlackRock Money Market ETFs Go Live; Ondo Finance on Tokenized MMFs" (2/6/25), "VettaFi Discusses Money Market ETFs" (12/11/24), "Dec. MFI: Assets Break $7.0 Tril; Top 10 of 2024; BlackRock MM ETFs" (12/6/24), "BlackRock Debuts First Euro MM ETF" (12/5/24), "FT on BlackRock Money Market ETFs" (11/18/24), "November BFI: Bond Funds Hit by Election; ETF Trends MM Substitutes" (11/15/24), "BlackRock Files for Money Market ETFs" (11/12/24) and "Texas Capital Launches Govt MM ETF" (9/26/24).
