Recommended allocation of $500k for three year time horizon is?

An investor I know wants to have income, capital preservation (very
important) and some small capital gains for $500k to be invested with
a term of 3 years from today.  Capital preservation is important, much
more so than capital gains. In fact, the investor has the entire $500k
in jumbo CDs.  Ironically, after three years the investor intends to
speculate in commercial real estate.  Go figure.

I suggested that in lieu of CDs, there's probably an ETF/mutual fund
that has short-term bond and/or conservative stock allocations that
should outperform CDs--is this true?

Please recommend which ETF/mutual funds (preferred over individual
issues) they should invest in.

RL

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators
strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond.  For all of the other tips and suggestions, see "FROM
THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on
the
Newsgroup.