Now leaving


You're about to visit a site that is neither owned nor operated by Thrivent Asset Management.

In the interest of protecting your information, we recommend you review the privacy policies at your destination site.

Financial Professional Site Registration

Complete this form to get full access to the entire financial professional site.

By clicking “Register”, you agree to our privacy and security policies and that you are a financial professional.

Access will be granted immediately, but the registration process may take up to 5 business days to complete.

Thank you for registering

You can now enjoy all financial professional content.

If your download does not start automatically, click here.

An error occurred

Please check back later.

Gene Walden
Senior Finance Editor


Helping your clients with this alternative to money market funds

By Gene Walden, Senior FInance Editor | 08/23/2022

In this era of historically low interest rates, most money market funds have been offering little-to-no yield to investors. Yet money market funds have traditionally been a popular place for investors to park their assets before moving them into stock or bond investments. 

For your clients who may be rolling over their retirement fund assets during this uncertain economic environment, Thrivent Limited Maturity Bond Fund – Class S (THLIX) might offer better return potential as a placeholder for those dollars – particularly if you plan to move those assets gradually into bond or equity funds through dollar cost averaging.

Although the Thrivent Limited Maturity Bond Fund does entail credit, duration, and interest rate risk, those risks tend to be less than other bond funds but more than a money market fund.  Unlike a money market fund, this fund has a variable Net Asset Value (NAV) so the share price may go up or down especially in periods of market volatility. The Fund holdings are very short duration instruments that carry low interest-rate risk. The Fund recently offered a 12-month distribution yield of 1.59% and a 30-day SEC yield of 3.33%1 (Rates are as of June 30, 2022). (See current rate)

The Fund invests primarily in investment-grade corporate bonds, government bonds, asset-backed securities, mortgage-backed securities and collateralized debt obligations. It may also invest a portion of assets in foreign securities. The portfolio enhances yield with a diversified portfolio including securitized debt, such as government-guaranteed residential mortgage-backed securities and high-quality structured securities with underlying assets such as corporate and student loans. 

While the principal of the Fund may experience some volatility due to fluctuations in the interest rate environment, its shorter duration makes the Fund less sensitive to interest rate changes than some longer-duration funds. As a result, the Fund may be appropriate for an investor who is seeking the opportunity to generate a modest level of income (with some investment risk), but with less interest rate risk and a lower return potential than most longer-term bond funds.

Comparing performance during a similar environment

In a period of rising rates, investors are often advised to lower the duration of their fixed income portfolio. This is because duration measures the extent to which bond prices increase or decrease with movements in interest rates, which is an inverse relationship. In other words, the value of a 10-year bond might be affected more by rising market interest rates than that of a 1-year or 2-year bond.

However, it is also important to keep in mind that portfolios with higher durations tend to offer higher yields. Therefore, one cannot assume that having a lower duration in a period of rising rates will lead to outperformance. A portfolio with a lower yield, such as a money market fund, may still underperform a longer duration fund if the longer duration fund is generating a higher yield and does not put capital at jeopardy through higher default risk.

While interest rates are rising more quickly today than we have seen in recent years, we can look to the period between December 2015 – December 2018 to see how both funds performed in a recent period of rising interest rates driven by Federal Reserve rate increases. The performance figures exclude dividends and reflect net asset value performance only:

As you can see, the growth of $10,000 from the Fund was significantly better than the return from a money market fund.

To learn more about the Thrivent Limited Maturity Bond Fund, see Thrivent Limited Maturity Bond Fund Seeks Higher Yields with Lower Risk.

1 The 12 Month Distribution Yield is the sum of a Fund’s total trailing dividend distributions for the last 12 months, divided by its net asset value or share price at the end of the period. The 30 Day SEC Yield is a standardized yield calculation developed by the Securities and Exchange Commission (SEC). It captures the net investment income earned by a fund over a 30-day period, after the deduction of the Fund’s expenses. It’s an annualized percentage, based on the Fund's share price on the last day of the period. Since share prices and yields are subject to fluctuation, current yields should not be considered an indication of future results.

Performance data cited represents past performance and should not be viewed as an indication of future results. Investment return and principal value of the investment will fluctuate so that an investor's shares, when redeemed may be worth more or less than the original cost. Current performance may be lower or higher than the performance data quoted. Call 800-847-4836 or click here for performance results current to the most recent month-end.

*You could lose money by investing in the Thrivent Money Market Fund. Although the Thrivent Money Market Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Thrivent Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Thrivent Money Market Fund's sponsor has no legal obligation to provide financial support to the Thrivent Money Market Fund, and you should not expect that the sponsor will provide financial support to the Thrivent Money Market Fund at any time.

The information presented does not consider your firm’s or clients’ investment objectives and may not be suitable for all investors. This material should not be construed as investment advice, a recommendation to purchase or sell specific securities, or to adopt any particular investment strategy. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, investment, accounting, legal or tax advice.

Related insights

March 2023 Market Update


Stocks in box as economic uncertainty continues

Stocks in box as economic uncertainty continues

Stocks in box as economic uncertainty continues

Stocks have been trading in a narrow range in recent months, with the S&P 500 yo-yoing between about 3,700 and 4,150 since last September, as economic uncertainty over inflation – and the response by the Federal Reserve (Fed) – continues.

Stocks have been trading in a narrow range in recent months, with the S&P 500 yo-yoing between about 3,700 and 4,150 since last September, as economic uncertainty over inflation – and the response by the Federal Reserve (Fed) – continues.