The issues facing investors are nicely laid out by Beverly Goodman in The Cash Conundrum in this week's Barron's.
One of the examples she covers is worth going over specifically. Pimco's cash alternative exchange traded fund (ETF) with ticker symbol MINT has a SEC yield of 0.46%:
It also has, as shown, an expense ratio of .35%. The net yield then is a measly .11% which could easily be wiped out by a drop in the price of the Fund.
The bottom line is investors need to be careful investing cash that is necessary for emergencies, expected expenses like a down payment, or college tuition.