The above is a 5 year chart of one of my MM funds. You can see it does not fluctuate in value and never makes losses.The reason it jumped higher from 2022 is because interest rates started rising. Remember, the returns of MM funds track base rates.
Choosing the right MM Fund
- If you are a UK-based investor make sure you select a GBP fund. Otherwise, you’ll get currency fluctuations
- Ensure it is a “Short Term” MM Fund. This ensures the fund’s debt holdings don’t fluctuate in market value – plus minimises the risk of a borrower defaulting
- Check the fund’s holdings to ensure debt issuers (borrowers) are high quality blue-chip names like the UK government
- Check that fees are low. Like all funds, MM funds charge an annual management fee. Less than 0.20% pa is good. Mine charges 0.10% pa which is the equivalent of £10 per annum for every £10,000 invested.
Any Risks?
These are cash-like assets. So if a MM fund were to ever make losses, we’d have much more serious concerns than our finances!
For completeness, be aware of the following:
- MM Funds are not covered by the FSCS scheme. To remind you, if a bank goes under, your deposits are underwritten by the government, for up to £85k. A MM Fund is not a bank, hence no FSCS. But because one of the biggest borrowers inside a MM fund is the UK government, that is akin to a FSCS warranty.
- Withdrawal notice is not required but it can 2-3 business days for your cash to be available
- Long term, stocks have always outperformed MM Funds and cash. So to optimise your returns, remember to own stocks as well as MM funds.
Make MM Funds a key part of your Portfolio …
MM Funds provide an element of stability and liquidity in your portfolio.
The first step is to plan your portfolio – also called ‘Asset Allocation’ in investment jargon.
In simple terms, this is how you divide up your portfolio into MM Funds, Stock ETFs, Gold, Options etc.
Once you have the plan in place – and if it’s properly diversified – your investment success is almost guaranteed.
Immediate Low Hanging Fruit …
In the first class of our recent Investment Academy, one attendee said he had a significant cash sum in his Ltd Company and in the SSAS pension. That cash was earning next to nothing.
So when we introduced MM Funds in the class, he immediately shifted his cash into MM Funds.
The net result: one simple move earned his course fees – in the first class. There are many more low-hanging fruits like this in our Investment Academy.
Start Immediately …
A clear, personalised, passive investment plan is exactly what you will you create – and implement – on Day 1 inside the Investment Academy.
You can enrol now to create your own personalised plan, ahead of the live classes starting in June.
Enrol immediately here
NOW interest-free monthly payments are available – use Klarna at checkout (with no hard credit checks).
Or arrange a call to learn more.
The Investment Academy isn’t just a course.
It’s guided action to help you create a set-and-forget, low-fee portfolio to grow wealth and generate income – without the noise and complexity.
Always Remember:
- Time in the Markets always beats timing the markets
- Stay Diversified
- Minimise those leakages: Fees, Inflation, and Taxes
- Financial Markets are a great source of recurring income
- ETFs, Balanced Funds and Options achieve all the above
- Being educated helps you outperform 99% of the population
… to ensure your investments work for YOUR financial freedom (not someone else’s)
And …
For more guidance, our Investment Academy will help you implement all of this in a step-by-step way.
Thousands of people have learnt how to diversify and pound-cost-average into low-cost, set-and-forget ETFs & Funds for inflation-beating growth. And Options to create recurring income.
Click here to learn about our Investment Academy
Finally …
– Don’t take the above as advice as it may not apply to you personally
– Your Capital is at Risk
– You may not be covered by the FSCS
– Anything mentioned in a podcast or in a previous article was valid at that time and may not continue to be now
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