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Short Term Money Market funds
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Qyburn
Posts: 3,583 Forumite

Hi,
I'm thinking about where to hold our short to medium term savings, currently building up in cash savings accounts.
One quick question about Money Market funds, what is the significance of "Short Term"? Is that just tbe underlying mechanism, or does it imply they are unsuitable except for short term investments, for example not keeping up with inflation.
I'm thinking about where to hold our short to medium term savings, currently building up in cash savings accounts.
One quick question about Money Market funds, what is the significance of "Short Term"? Is that just tbe underlying mechanism, or does it imply they are unsuitable except for short term investments, for example not keeping up with inflation.
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Comments
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They are, of course, never guaranteed to keep up with inflation. Only investments that explicitly say they are linked to inflation do that.
Which fund is using the phrase "Short Term", and in what context? It doesn't sound like a "mechanism" at all to me.0 -
It's just tautology. Money market funds hold short duration bonds within them, so they have minimal interest rate sensitivity (the sort of interest rate sensitivity that caused other bond funds to significantly fall in value recently).
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Qyburn said:Hi,
I'm thinking about where to hold our short to medium term savings, currently building up in cash savings accounts.
One quick question about Money Market funds, what is the significance of "Short Term"? Is that just tbe underlying mechanism, or does it imply they are unsuitable except for short term investments, for example not keeping up with inflation.'Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it' - Albert Einstein.0 -
EthicsGradient said:
Which fund is using the phrase "Short Term", and in what context? It doesn't sound like a "mechanism" at all to me.
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Doctor_Who said:Qyburn said:Hi,
I'm thinking about where to hold our short to medium term savings, currently building up in cash savings accounts.
One quick question about Money Market funds, what is the significance of "Short Term"? Is that just tbe underlying mechanism, or does it imply they are unsuitable except for short term investments, for example not keeping up with inflation.
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zagfles said:Doctor_Who said:Qyburn said:Hi,
I'm thinking about where to hold our short to medium term savings, currently building up in cash savings accounts.
One quick question about Money Market funds, what is the significance of "Short Term"? Is that just tbe underlying mechanism, or does it imply they are unsuitable except for short term investments, for example not keeping up with inflation.'Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it' - Albert Einstein.0 -
Thanks, I think Gilts or individual bonds are going to be too complex for me. And last year showed that bond-heavy funds are too risky to just leave running.
Really I'm just unsure what to use in between cash for immediate use, and equity heavy funds for long term.0 -
Qyburn said:Thanks, I think Gilts or individual bonds are going to be too complex for me. And last year showed that bond-heavy funds are too risky to just leave running.
Really I'm just unsure what to use in between cash for immediate use, and equity heavy funds for long term.
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Qyburn said:Thanks, I think Gilts or individual bonds are going to be too complex for me. And last year showed that bond-heavy funds are too risky to just leave running.
Really I'm just unsure what to use in between cash for immediate use, and equity heavy funds for long term.
Both track the SONIA bank rate which is currently 5.18%
I hold a chunk of CSH2 in my SIPP and it is nice to see it increase every single week, unlike my equities 😂😂2 -
masonic said:
It's worth remembering that traditional bond funds have just given up gains they made earlier when interest rates plummeted.0
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