The $6.3 Trillion Money-Market Industry Just Got Its First ETF

A new exchange-traded fund attempting to carve out a slice of the $6.3 trillion sitting in traditional money-market funds is launching Wednesday.

The Texas Capital Government Money Market ETF begins trading under the ticker MMKT, according to a press release. While other short-dated bond ETFs exist, MMKT is the first to follow the so-called Rule 2a-7 — a provision of a 1940s Securities and Exchange Commission law that governs money-market funds.

MMKT’s portfolio will have the characteristics of a traditional money-market fund and be governed by the same SEC provision, there’s one crucial difference: MMKT won’t maintain a stable net-asset value of $1.

ASSETS IN MONEY

“Money markets have gone unchallenged since ETFs began,” said Edward Rosenberg, head of ETF and funds management for Texas Capital. “Money market funds are viewed as cash equivalents, and no other ETF has that designation.”