Here's the returns from the MMF so far:
* The monthly returns are calculated by subtracting the MMF NAV of the last day of the month from that of the first day of the month, divided by the NAV value of the first day of the month, in percentage terms
As you can clearly see, during May, the returns per month dipped to 0.053%, giving an estimated returns of 0.64% per annum. It's better than savings, but not much better. I started putting my money back into MMF again during June, when I noticed a rise in the returns to 0.089%, which gives roughly 1.07% per annum. That is more acceptable for the risk that I put into the MMF. Though I say that, do take note that MMF is as safe as savings deposits, since most of the capital is placed in time deposits, treasury bonds, bills etc.
The heydays where the monthly returns of 0.15% and above is over. That happened in mid 2007. At that time, the stocks are breaking new high, so who the hell wants to put into MMF. Given an average monthly returns of 0.15%, it'll add up to 1.8% per annum at least. I didn't include compounding.
Here's how the MMF returns tracked since May 2007 to present looks like:
For this month of July, the returns for this month is 0.089%. Just one more day to go, shouldn't be too far off from there.
4 comments :
Are you putting your emergency/short term (1-2 yrs) cash and also include excess saving into MMF?
Hi bro8888,
I had slightly less than half of my short term cash (needed for marriage and property) in MMF. I've no excess savings because I've not saved enough for my short term needs yet, so all can be concerned short term cash.
I used to put all in, but when the returns from MMF dropped for a few months, I switched back to savings acct. Now I switched half back in MMF again.
I did not want to put into any instruments because I need to use it within a year and thus need the liquidity and safety. Definitely no stocks, haha
May I know why you still bother to put money in the money market fund which give you <1% ?
Hi anonymous,
I put money in a low returns place because I need the money in the short term (within 1 yr). I might get better returns if I put in say stocks, but I would rather not risk it.
The consequence of losing the capital is much more severe to me than the joy of having more returns. Due to this and the need for liquidity, MMF is the best place I can think of. Is there a better place to put it, giving me good liquidity, protection of capital and a decent returns of >1%? Kindly share with me :)
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