A money market fund is a mutual fund that invests capital into short-term, highly liquid securities. These funds are a popular investment choice for individuals and companies wishing to protect funds while receiving a moderate return.
Money market funds are crucial for the stability of interest rates and the effective distribution of funds across the economy in the wider financial system. Overall, they support the financial markets’ liquidity and stability.
The Phillip SGD Money Market Fund is one such fund you can consider. It invests in liquid and top-notch short-term debt instruments and money market instruments. Investors may put their money in this fund and earn a competitive rate in a low-risk, highly liquid environment.
The Phillip SGD Money Market Fund offers an option to investors looking for a secure haven for their SGD assets, emphasizing security and adaptability. Let’s discuss four prominent things you should know about the Phillip SGD money market fund.
Who manages the Phillip SGD money market fund?
It is managed by Phillip Capital Management (S) Ltd, the asset management arm of PhillipCapital Group. The management team modifies the fund’s portfolio composition in response to changes in interest rates and the money market. Through active management, the fund can increase yields while ensuring that the risk levels of the portfolio remain unchanged. The fund also strives to have a high level of liquidity to fulfill investor redemption requests quickly.
Advantages of the Phillip SGD money market fund
The Phillip money market fund’s key investment objective is to safeguard principal value, maintain a high level of liquidity, and provide returns equivalent to those of Singapore dollar (SGX) savings accounts. The primary investments of the sub-fund will be in short-term, high-quality debt securities and money market instruments. These investments might be made in corporate and government bonds, deposits with financial institutions, and commercial bills.
Additionally, when compared to riskier investments, money market funds normally offer lower returns, but the Phillips SGD Money Market Fund aims to deliver competitive rates given its low-risk profile.
Is the Phillip SGD money market fund secure?
The Philip SGD money market fund is often considered a safe investing option. It mainly makes investments in high-quality, short-term debt instruments such as commercial paper, treasury bills, and certificates of deposit.
MAS classifies it as an Excluded Investment Product (EIP). Over two-thirds of the fund’s assets are now held in cash and fixed deposits. They must have a minimum rating of A and often have a fairly short length of 40 days.
Factors to consider before investing in Phillip SGD money market fund
- Money market funds are subject to interest rate changes like any fixed-income assets. The fund’s yield can suffer if interest rates increase.
- While the fund strives to keep its NAV steady, there is no assurance that it will do so always. A money market fund’s NAV may occasionally fall below US$1 per share, a situation known as “breaking the buck”.
- Changes in regulations might affect the structure or functioning of money market funds. Investors should keep up with these restrictions.
By offering a balanced approach to income production while controlling risk, the Philip SGD Money Market Fund provides a secure and liquid SGX investment, thanks to its focus on capital preservation, competitive returns, and expert management.
Investors should be mindful of the potential impacts of interest rate changes and regulatory modifications for this investment. To ascertain whether the Philip SGD Money Market Fund fits with your investment goals and risk tolerance, speak with a financial advisor before making any investments.