What is Money Market Fund (‘MMF’)?
Money Market Fund invests in short-term debt securities such as U.S. Treasury Bills and commercial paper and are generally low-risk investments.The management goal of MMF is to maintain a highly stable asset value through liquid investments. At the same time, some funds pay income to investors in the form of dividends. Investors can buy and redeem funds when needed, so MMF offers high liquidity and flexibility.Advantages- Stability: one of the lowest volatile types in fund investments
- Liquidity: Most MMFs can be redeemed on the trading day, and some MMFs can even be credited the same day after redemption
- Safety: As a low-risk investment, MMF is less susceptible to market fluctuations than other types of investments by investing in a portfolio of highly liquid and short-term cash and cash like instruments
- Short holding period: Due to the short holding period, the interest rate risk it bears is usually lower than that of long-term bond funds.
- Credit risk: Although MMF typically invests in high-quality securities and will make its best efforts to manage and mitigate credit risk within the MMF portfolios, there is a risk of loss as an investment product, and it cannot promise to protect the capital
- Inflation risk: MMFs are designed to provide a relatively stable investment option, with the underlying investments typically being short-term securities. However, due to its conservative nature, their returns are typically lower than those produced by more volatile investments, such as typical stock and bond funds.
Why is Money Market Fund called ‘parking fund’?
During periods of market volatility, in addition to holding cash, you can also consider choosing MMF: When you are waiting for an entry point for an investment fund, Money Market Fund could be a good alternative to sitting on cash and provide the opportunities to earn returns in Money Market.Money Market Fund, also known as ‘parking fund’, have relatively lower risks than other funds, and there are generally no additional fees for switching to money funds.Product Overview: Money Market Fund, Time Deposit, Savings Insurance Plan:
Money Market Fund’s Return Performance
The following are the return performance details of money market funds distributed by WeLab Bank (data as of Sep 30, 2024)
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Note
- Data Source: Refer to Morningstar, among all the money market funds available in WeLab Bank platform, the highest 1-year return performance was 5.41% as of 30 Sep 2024.
- The list of risks is not exhaustive, while it only highlights a few of them among other risk types.
- A deposit protection scheme protects depositors by paying compensation to them in the event of a bank failure. In Hong Kong, the DPS is established under the Deposit Protection Scheme Ordinance (DPS Ordinance). Most of the commonly placed deposits with Scheme members, whether denominated in Hong Kong dollar, renminbi or any other currency, qualify for this protection. These include current accounts, savings accounts, secured deposits and time deposits with maturity not exceeding five years.
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- For dividend of certain share classes, payment of dividend out of capital and/or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment. Any such distributions may result in an immediate reduction of the Net Asset Value per share.
- The performance details displayed on the website may encounter delays due to website maintenance. Please refer to the GoWealth page of WeLab Bank App for the latest available performance details.
- Money Market Fund is not equivalent to time deposit. It is also not protected under the Deposit Protection Scheme in Hong Kong. The value of the Fund can be volatile and can go down substantially within a short period of time. It is possible that a certain amount of your investment could be lost. Investors should not make investment decisions based on this website alone. Investors should refer to the Prospectus and Key Facts Statement for details including risk factors.