Investors may want to start preparing now to earn lower yields on their cash.
With the Federal Reserve signaling it could cut interest rates in September, Pimco's Jerome Schneider sees a major disadvantage in holding on to cash as money market yields come down.
"You're finding yourself moving from a 5% risk-free rate to a 3.5% risk-free rate pretty quickly on that cash," the firm's head of short-term portfolio management told CNBC's "ETF Edge" last week.
The 100 largest money market funds are still offering a competitive return on cash at 5.12%, as of Sunday, per Crane Data.
"Move to those ultra-short ETF strategies, low-duration ETF strategies, even the bond and core ETF strategies that have actively managed components," he said.
Persons:
Pimco's Jerome Schneider, Schneider, it's
Organizations:
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