money market fund
-
i'm currently in the process of learning investment. i found out that money market fund seems to be the most appropriate investment instrument for beginners. could anyone kindly elaborate more on money market fund in simple terms? thks. and what are the available money market funds in singapore?
-
Hi, the simplest way would be to open a poems account and put your monies into Philips Money Market Fund.
You can transfer in and out easily
Anyway, I recently just posted this on my blog on how I manage my monies..
-
Hi TS,
i'd try to explain this. Forgive me if im mistaken.
Money market fund is basically a fund that puts money into very safe instruments. E.g. fixed deposits. therefore the fund invests in different fixed deposits at different times of the year, thereby dollar cost averaging your fixed deposit return rates. There are some pros and cons with regard to money market funds.
Pros:
- Liquid. You can put in your money anytime, and take it out anytime.
- No sales charge. Unlike many other collective investment schemes, e.g. equity funds, MMFs do not have an initial sales charge. They do, however, have an annual management fee.
- Relatively safe. MMFs are not as volatile as equity funds or bond funds, meaning your $1 today would unlikely become $0.50 tomorrow.
- There is an implicit guarantee. Although your money put in MMFs are not guaranteed, their underlying instruments, e.g. fixed deposits, are.
Cons:
- Low returns. Maybe its just me, but i've noticed that for MMFs, their average return rate is quite low, ranging from about 0.3% p.a. to 0.6% p.a., even lower that our fixed deposits.
It's 3.40am in the morning and i can't think of any other cons, sorry ..
