• Ultrashort funds hold short-term fixed income securities with maturities of less than one year.
  • These funds can have more freedom and usually achieve higher returns by investing in riskier securities than traditional bond funds.
  • The Federal Deposit Insurance Corporation (FDIC) does not cover or guarantee ultrashort bond funds.
  • In a high interest rate environment, certain types of ultra-short bond funds may be particularly susceptible to losses.