Money Market funds

billy2shots

GeoffTF said:

billy2shots said:

GeoffTF said:

billy2shots said:

Stupid rookie MMF question. 

When are people receiving interest?

In the key information I am seeing 'Dividends ' paid annually,  bi-annually, quarterly but not monthly. 

When is the income / fund growth (if acc) received?

Which fund are you looking at? You need to find more information about the fund, understand how these funds work and understand the tax rules.

It would be held in a fidelity ISA (and maybe some in sipp) so no tax. 

Looking at Royal London short term mmf. 

In that case, see my reply to Dunstonh above. The HL website tells you what you need to know for that fund. It is less good for some other funds.

It's the income paid 'bi-annually'  that confused me. Still does if I'm being honest. 

So, in this income version, the fund holding will still rise (in normal situations but obviously  not guaranteed) in value daily. I can sell out after a month, 2 or 3 to lock in the return. 
Once we reach the dividend  pay out date, if I'm still holding the fund I will get the divi and the fund value will drop lower as a result?

Held and sold past ex divi date would see the fund fall in value but the dividend paid at the later date. 

Is that correct?

GeoffTF

billy2shots said:

GeoffTF said:

billy2shots said:

GeoffTF said:

billy2shots said:

Stupid rookie MMF question. 

When are people receiving interest?

In the key information I am seeing 'Dividends ' paid annually,  bi-annually, quarterly but not monthly. 

When is the income / fund growth (if acc) received?

Which fund are you looking at? You need to find more information about the fund, understand how these funds work and understand the tax rules.

It would be held in a fidelity ISA (and maybe some in sipp) so no tax. 

Looking at Royal London short term mmf. 

In that case, see my reply to Dunstonh above. The HL website tells you what you need to know for that fund. It is less good for some other funds.

It's the income paid 'bi-annually'  that confused me. Still does if I'm being honest. 

So, in this income version, the fund holding will still rise (in normal situations but obviously  not guaranteed) in value daily. I can sell out after a month, 2 or 3 to lock in the return. 
Once we reach the dividend  pay out date, if I'm still holding the fund I will get the divi and the fund value will drop lower as a result?

Held and sold past ex divi date would see the fund from in value but the dividend paid at the later date. 

Is that correct?

Yes that is correct. There is one month delay in paying the dividend IIRC. You do not get interest on the dividend during that period. Over a year you potentially fail to make about (4/12)% of 4%, i.e about 0.013% of your investment over the year because of that. Vanguard would pay any interest that they make on the dividend into the fund, but I do not know what RL does.

GeoffTF

GeoffTF said:

billy2shots said:

GeoffTF said:

billy2shots said:

GeoffTF said:

billy2shots said:

Stupid rookie MMF question. 

When are people receiving interest?

In the key information I am seeing 'Dividends ' paid annually,  bi-annually, quarterly but not monthly. 

When is the income / fund growth (if acc) received?

Which fund are you looking at? You need to find more information about the fund, understand how these funds work and understand the tax rules.

It would be held in a fidelity ISA (and maybe some in sipp) so no tax. 

Looking at Royal London short term mmf. 

In that case, see my reply to Dunstonh above. The HL website tells you what you need to know for that fund. It is less good for some other funds.

It's the income paid 'bi-annually'  that confused me. Still does if I'm being honest. 

So, in this income version, the fund holding will still rise (in normal situations but obviously  not guaranteed) in value daily. I can sell out after a month, 2 or 3 to lock in the return. 
Once we reach the dividend  pay out date, if I'm still holding the fund I will get the divi and the fund value will drop lower as a result?

Held and sold past ex divi date would see the fund from in value but the dividend paid at the later date. 

Is that correct?

Yes that is correct. There is one month delay in paying the dividend IIRC. You do not get interest on the dividend during that period. Over a year you potentially fail to make about (4/12)% of 4%, i.e about 0.013% of your investment over the year because of that. Vanguard would pay any interest that they make on the dividend into the fund, but I do not know what RL does.

I have just been looking at the dates: XD 1st May and 23 Pay 30 June 23. A two month wait for the payment.

Stargunner

GeoffTF said:

GeoffTF said:

billy2shots said:

GeoffTF said:

billy2shots said:

GeoffTF said:

billy2shots said:

Stupid rookie MMF question. 

When are people receiving interest?

In the key information I am seeing 'Dividends ' paid annually,  bi-annually, quarterly but not monthly. 

When is the income / fund growth (if acc) received?

Which fund are you looking at? You need to find more information about the fund, understand how these funds work and understand the tax rules.

It would be held in a fidelity ISA (and maybe some in sipp) so no tax. 

Looking at Royal London short term mmf. 

In that case, see my reply to Dunstonh above. The HL website tells you what you need to know for that fund. It is less good for some other funds.

It's the income paid 'bi-annually'  that confused me. Still does if I'm being honest. 

So, in this income version, the fund holding will still rise (in normal situations but obviously  not guaranteed) in value daily. I can sell out after a month, 2 or 3 to lock in the return. 
Once we reach the dividend  pay out date, if I'm still holding the fund I will get the divi and the fund value will drop lower as a result?

Held and sold past ex divi date would see the fund from in value but the dividend paid at the later date. 

Is that correct?

Yes that is correct. There is one month delay in paying the dividend IIRC. You do not get interest on the dividend during that period. Over a year you potentially fail to make about (4/12)% of 4%, i.e about 0.013% of your investment over the year because of that. Vanguard would pay any interest that they make on the dividend into the fund, but I do not know what RL does.

I have just been looking at the dates: XD 1st May and 23 Pay 30 June 23. A two month wait for the payment.

That is why I prefer the acc version, as it just ticks up and up and doesn’t show a big drop every 6 months when it goes ex div

Rheumatoid

Still struggling to get my head around these things. Put 3k into 'Vanguard Sterling Short-Term Money Market Fund - Income' on the 8th of April. Watched the gain creep up slowly to about £5 and then dropped back to around -£5. It's now creeping back up again. I could understand this had I been paid any income at the end of April but I haven't. Can someone explain in simple terms how I will receive any returns.
TIA

wmb194

Rheumatoid said:

Still struggling to get my head around these things. Put 3k into 'Vanguard Sterling Short-Term Money Market Fund - Income' on the 8th of April. Watched the gain creep up slowly to about £5 and then dropped back to around -£5. It's now creeping back up again. I could understand this had I been paid any income at the end of April but I haven't. Can someone explain in simple terms how I will receive any returns.
TIA

You've never owned a share/fund that's gone ex-dividend before? It went ex-dividend at the end of April and the interest will be paid on 31/05.



https://www.vanguardinvestor.co.uk/investments/vanguard-sterling-short-term-money-market-fund-investor-gbp-income-shares/distributions

pbcpdeveloper

Going by my experience you won't see anything mentioned for an April Investment until the end of May and not recieve the first payment until Mid June.

I put money in to the Vangaurd MMF on 1st March,  I didn't see the Dividend announcement until the 28th April under the Transactions->'Corporate Actions' tab.  In the announcement it inidcates that investors who held the shares at 31st March are entitled to receive the distribution within 10 business days of the of the Effective Date (28th April).  I havent received them yet and might not until 16th May.

So you have a bit of a wait before you physically receive your first payment.

plumb1_2

wmb194 said:

Rheumatoid said:

Still struggling to get my head around these things. Put 3k into 'Vanguard Sterling Short-Term Money Market Fund - Income' on the 8th of April. Watched the gain creep up slowly to about £5 and then dropped back to around -£5. It's now creeping back up again. I could understand this had I been paid any income at the end of April but I haven't. Can someone explain in simple terms how I will receive any returns.
TIA

You've never owned a share/fund that's gone ex-dividend before? It went ex-dividend at the end of April and the interest will be paid on 31/05.



https://www.vanguardinvestor.co.uk/investments/vanguard-sterling-short-term-money-market-fund-investor-gbp-income-shares/distributions

Record date 31 march, payable 28 April, doesn’t payout for a further 10 days 

wmb194

plumb1_2 said:

wmb194 said:

Rheumatoid said:

Still struggling to get my head around these things. Put 3k into 'Vanguard Sterling Short-Term Money Market Fund - Income' on the 8th of April. Watched the gain creep up slowly to about £5 and then dropped back to around -£5. It's now creeping back up again. I could understand this had I been paid any income at the end of April but I haven't. Can someone explain in simple terms how I will receive any returns.
TIA

You've never owned a share/fund that's gone ex-dividend before? It went ex-dividend at the end of April and the interest will be paid on 31/05.



https://www.vanguardinvestor.co.uk/investments/vanguard-sterling-short-term-money-market-fund-investor-gbp-income-shares/distributions

Record date 31 march, payable 28 April, doesn’t payout for a further 10 days 

Rheumatoid didn't own them in March so that's not relevant to them but it's pretty poor that Vanguard takes so long to pay distributions from its own funds on its own platform. In the same circumstances e.g., Fidelity will pay on the due date.

plumb1_2

Ya I have £40k in vanguard mmf, last dividend payment I received was 31march
so I expected my next dividend payment date would have been 28 April. But it states it paid within 10 business days of the payable/ effective date. So that could be upto the 16th May
Very poor service from Vanguard, bet I don’t get any interest paid on the money their holding back.
Plus delaying me from re- investing it.