Money Market Fund

[melvados]

Hi all, I chanced upon Phillip Money Market Fund (PMMF).
Wondering if anyone could give me some insights, eg. is this an appropriate investment instrument for beginners?

And also, could someone kindly explain more into details what Money Market Fund actually does?
Tried looking for more information, either I came up empty or I am having difficulties in understanding :|

As far as I can understand, it is more of putting money into the account, and have the amount invested/ managed by Philip (feel free to correct if I am wrong on that..), similar to a fixed savings account?

Looking forward to hear any replies.

Thanks!

 

[Wishdom]

They invest in high grade short term bonds and fixed deposits. Returns are around 1%? if i remember correctly. It is not capital guaranteed.

Most people use it passively; to earn some returns while the money is sitting in their poems account. Their main objective is to ultimately invest that sum of money when the time is '' right ''.

You are better off putting your money into high yielding bank savings account.

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[BBCWatcher]

Moreover, it has a 0.45% annual management fee. There is neither deposit insurance nor any Singapore government guarantee, so there's some principal risk. (It does invest in high credit rating short-term instruments, but there's still some risk in that.)

Certainly you'll want to max out your Singapore Savings Bond allocation before considering this fund. The SSBs are much more attractive. If you anticipate parking money for a year then ordinary T-Bills, which are auctioned quarterly, are also more attractive. Even bank fixed deposits are often more attractive, assuming you can live with the particular tenor(s) and, preferably (but not strictly required) you stay within deposit insurance limits. If you're investing via a U.S. broker (e.g. Interactive Brokers, Schwab) then U.S. T-Bills are available in tenors as short as 4 weeks in U.S. dollars (of course), and they're auctioned frequently -- practically every week. There are also excellent U.S. dollar federal government money market funds.

I agree with Wishdom that really the only useful purpose for this particular fund is as a convenient place to park "hot money," specifically Singapore dollars that you'll surely invest in something else, denominated in Singapore dollars, within days or a very few weeks. It's not for the "beginning investor" or even for most "advanced" investors -- it's a pretty narrow use.

 

[Solano]

The best money market fund is LionGlobal SGD Money Market Fund. It's based on 1-month Sibor - 0.25% Management fee, so you get about 1.13% yield. Treat it as a parking account to intra-switch into/from other LionGlobal funds with no lag.

 

[BBCWatcher]

That is a better SGD money market fund, agreed. It serves the same narrow purpose: as a short-term parking place for "hot money" that will surely be invested in something else Singapore dollar-denominated, soon.

 

[zumaba]

The best money market fund is LionGlobal SGD Money Market Fund. It's based on 1-month Sibor - 0.25% Management fee, so you get about 1.13% yield. Treat it as a parking account to intra-switch into/from other LionGlobal funds with no lag.

There is (almost) no cost to park your money with POEMS Money Market Fund which pays about 1.02% interests currently, and you can transfer in/out anytime to and from your POEMS a/c.

But how to park your money with LionGlobal SGD Money Market Fund, need to buy in and sell out with cost?

 

[Solano]

I have a quarter of my asset parked with LionGlobal through UOB Kay Hian as they don't charge platform fee like FSM.

It doesn't matter which LionGlobal funds you have at any point of time, as long as the money is with LionGlobal, you can switch between the dozens of funds available at any time with no cost, and the switching is instant, so you get today's prices for switch-out fund and switch-in fund at the same time. So if you switch between their money market fund and their equity funds, you are effectively getting unlimited free trades - trading unit trusts like stocks.

There is (almost) no cost to park your money with POEMS Money Market Fund which pays about 1.02% interests currently, and you can transfer in/out anytime to and from your POEMS a/c.

But how to park your money with LionGlobal SGD Money Market Fund, need to buy in and sell out with cost?

 

[BBCWatcher]

The LionGlobal SGD Money Market Fund currently has no sales charge and no redemption fee. Any broker in Singapore (and perhaps some others) should be able to get you there and back.

 

[final1]

@melvados
CIMB Fastsaver. Flat 1%.
Higher than Philips which is 0.8 to 0.9%.

Better liquidity too as you can FAST anytime you want.

 

[BBCWatcher]

CIMB Fastsaver. Flat 1%.

Not exactly. That's only on the first $50,000. If you want a flat interest rate that's StarSaver, at 0.8%.

 

[Solano]

FAST has a limit of $50k per day. What if I were to buy $100k of unit trusts in one shot?

@melvados
CIMB Fastsaver. Flat 1%.
Higher than Philips which is 0.8 to 0.9%.

Better liquidity too as you can FAST anytime you want.

 

[final1]

Most banks already upgraded to $200k FAST limit. Some banks still in the midst of upgrading.

 

[Solano]

Really? My UOB One account limits to 20k FAST, and my CIMB Fastsaver limits to 50k FAST. Who are your "most banks" refer to?

Most banks already upgraded to $200k FAST limit. Some banks still in the midst of upgrading.

 

[revhappy]

Really? My UOB One account limits to 20k FAST, and my CIMB Fastsaver limits to 50k FAST. Who are your "most banks" refer to?

SCB and DBS both can.

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[rrr2015]

for LionGlobal funds, you still have to calculate units to sell & buy manually.

with PMMF, it will automatically deduct & deposit funds whenever you buy or sell stocks. it's so much convenient

I have a quarter of my asset parked with LionGlobal through UOB Kay Hian as they don't charge platform fee like FSM.

It doesn't matter which LionGlobal funds you have at any point of time, as long as the money is with LionGlobal, you can switch between the dozens of funds available at any time with no cost, and the switching is instant, so you get today's prices for switch-out fund and switch-in fund at the same time. So if you switch between their money market fund and their equity funds, you are effectively getting unlimited free trades - trading unit trusts like stocks.

 

[melvados]

@melvados
CIMB Fastsaver. Flat 1%.
Higher than Philips which is 0.8 to 0.9%.

Better liquidity too as you can FAST anytime you want.

Not exactly. That's only on the first $50,000. If you want a flat interest rate that's StarSaver, at 0.8%.

Just check out between these 2 account types - StarSaver and FastSaver.
It seems that these 2 has about the same conditions, and the only main difference I am seeing is the interest rate...

Correct me if I am wrong (sorry if I do sound very noob here, I got confused and wanted to get my facts right)...

Say if I started off with the initial deposit of $1000, wouldn't the interest rate still be
- StarSaver : 0.8%
- FastSaver: 1%

Am I missing something?

 

[BBCWatcher]

Say if I started off with the initial deposit of $1000, wouldn't the interest rate still be
- StarSaver : 0.8%
- FastSaver: 1%
Am I missing something?

Not on a deposit of $1,000.

StarSaver (savings account) pays a flat 0.8% as long as your account balance is $1,000. FastSaver pays 1.0% on the first $50,000 (as long as your balance is at least $1,000) then 0.6% thereafter.

If you're going to keep more than $50,000 at CIMB then keep the first $50,000 in FastSaver and the remainder in StarSaver.

 

[Solano]

I don't buy/sell manually, as switching is one-step process. I don't see how you can make it simpler than that. Besides, you are paying almost double the management fee.

for LionGlobal funds, you still have to calculate units to sell & buy manually.

with PMMF, it will automatically deduct & deposit funds whenever you buy or sell stocks. it's so much convenient

 

[whitesand]

for LionGlobal funds, you still have to calculate units to sell & buy manually.

with PMMF, it will automatically deduct & deposit funds whenever you buy or sell stocks. it's so much convenient

You can specify the $ amt to buy and sell, the nos of units will be calculated automatically (except there may be rounding off difference of 0.01).

 

[rrr2015]

ah i see ... i think you are referring to unit trusts whereas I'm referring to stocks that's why I'm confused

I don't buy/sell manually, as switching is one-step process. I don't see how you can make it simpler than that. Besides, you are paying almost double the management fee.