1. POEMS money market fund (MMF) (2008)
2. Phillips money market fund (2009)
3. Phillips MMF (2010)
I know, from first look, they are all the same or similar sounding titles. No creativity on my part in choosing a title, haha!
For those who do not know, money market fund is a collection of short term bonds, deposits and savings. They don't give out interest like what stocks or even banks do. It's more like a unit trust where there's a NAV posted every day. If you buy say at 1.002 and after a month the NAV rises up to 1.012, then you have a return of 0.998% ( [1.012-1.002]/1.002 x 100%). The NAV keeps going up as the deposits and savings are capital protection upon maturity and even during the worst financial crisis, the NAV is steadily increasing.
Here's the returns I've tracked in the past:
2007: 2.01% pa
2008: 1.33% pa
2009: 1.04% pa
I didn't really track after that because it keeps dropping down as the interest rate environment is dropping also. But this yr and the last, the returns had been increasing again.
2015 Aug to 2016 Aug: 0.908% pa
If I take the more recent months, the returns will be even higher (but still less than 1% pa). It's time to take a look at this again to put your spare cash or emergency cash in. The process of taking in and putting in money is very fast, about 1 day usually (depending on time) and 2 business days latest.
What's the catch you ask?
It's not guaranteed by the bank deposit insurance, unlike fixed deposit (up to $50k per bank per pax, regardless of accounts in the bank). So, if Phillips MMF is to close down, then the money might not be able to recover. Well, in that case, don't put your whole networth in lah, just put in a suitable amount. You can use this is pay for your equities purchase using POEMS too, and that's what I do. The good thing about this is that it doesn't require you to jump through many hoops like minimum credit card spending etc. It's very good for people like me who don't have a fixed salary so I can't use those ocbc 360 accounts that people are raving about.