Money Market Fund

GeoffTF

chiang_mai said:

Albermarle said:

chiang_mai said:

Stargunner said:

chiang_mai said:

Qyburn said:

I might be looking at the wrong one but GB00BD1RHT82 has higher charges (0.15%) than Vanguard at 0.12% or Royal London 0.10%

I think you are correct, I selected Fidelity because it pays monthly and is the much larger fund.

The Fidelity fund is an Acc fund so it doesn't pay monthly. It is a much smaller fund than the RL one.

Fidelity Cash Class W on HL is available as Inc or Acc, the only other monthly options are JPM VNAV (C) which is only available as Acc. or, Vanguard which is quite a small fund.

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results?sectorid=138&start=0&rpp=20&lo=0&sort=fd.full_description&sort_dir=asc

As Vanguard have something like $ 5 Trillion of assets under management, then I do not think the actual size of any particular Vanguard fund is of any relevance,

Yes indeed, but the difference in yield between the VG and Fid. funds is 3.24% vs 5.04%.

3.25% is the historic yield. What matters is the current return, and the future return. The return from the two funds (before costs) will be almost the same. Nonetheless, the Vanguard fund is an OEIC so you will have to pay a percentage fee with HL.

mda99das

Do they pay 5% every quarter ?

chiang_mai

mda99das said:

Do they pay 5% every quarter ?

Yield is expressed as an annual return.

chiang_mai

GeoffTF said:

chiang_mai said:

Albermarle said:

chiang_mai said:

Stargunner said:

chiang_mai said:

Qyburn said:

I might be looking at the wrong one but GB00BD1RHT82 has higher charges (0.15%) than Vanguard at 0.12% or Royal London 0.10%

I think you are correct, I selected Fidelity because it pays monthly and is the much larger fund.

The Fidelity fund is an Acc fund so it doesn't pay monthly. It is a much smaller fund than the RL one.

Fidelity Cash Class W on HL is available as Inc or Acc, the only other monthly options are JPM VNAV (C) which is only available as Acc. or, Vanguard which is quite a small fund.

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results?sectorid=138&start=0&rpp=20&lo=0&sort=fd.full_description&sort_dir=asc

As Vanguard have something like $ 5 Trillion of assets under management, then I do not think the actual size of any particular Vanguard fund is of any relevance,

Yes indeed, but the difference in yield between the VG and Fid. funds is 3.24% vs 5.04%.

3.25% is the historic yield. What matters is the current return, and the future return. The return from the two funds (before costs) will be almost the same. Nonetheless, the Vanguard fund is an OEIC so you will have to pay a percentage fee with HL.

A good point, Fidelity it is. I think I have what I need, thanks to all for your comments.

Qyburn

chiang_mai said:

Nonetheless, the Vanguard fund is an OEIC so you will have to pay a percentage fee with HL.

A good point, Fidelity it is. I think I have what I need, thanks to all for your comments.

All three are OEICs so platform fee will be the same. I presume GeoffTF was contrasting with the Lyxor ETF mentioned earlier.

GeoffTF

Qyburn said:

chiang_mai said:

Nonetheless, the Vanguard fund is an OEIC so you will have to pay a percentage fee with HL.

A good point, Fidelity it is. I think I have what I need, thanks to all for your comments.

All three are OEICs so platform fee will be the same. I presume GeoffTF was contrasting with the Lyxor ETF mentioned earlier.

Yes. CSH2 avoids the platform fee. iWeb does not charge a platform fee at all.

mda99das

There are gilts that have better returns and also fixed rate bonds available on the Raisin platform, however the only issue is the deposit protection is 85k so may need to use several providers. My worry is that the UK has got a huge pile of debt and at the long end of the yield curve, the cost of borrowing is crazy. In the US they don't really issue ultra long debt like we do over here so they can just let it mature. However if they buy back those long dated bond, prices go up but yields drop so they fix long term debt. Do they sell short dated to buy long dated?

Linton

chiang_mai said:

Albermarle said:

chiang_mai said:

Stargunner said:

chiang_mai said:

Qyburn said:

I might be looking at the wrong one but GB00BD1RHT82 has higher charges (0.15%) than Vanguard at 0.12% or Royal London 0.10%

I think you are correct, I selected Fidelity because it pays monthly and is the much larger fund.

The Fidelity fund is an Acc fund so it doesn't pay monthly. It is a much smaller fund than the RL one.

Fidelity Cash Class W on HL is available as Inc or Acc, the only other monthly options are JPM VNAV (C) which is only available as Acc. or, Vanguard which is quite a small fund.

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results?sectorid=138&start=0&rpp=20&lo=0&sort=fd.full_description&sort_dir=asc

As Vanguard have something like $ 5 Trillion of assets under management, then I do not think the actual size of any particular Vanguard fund is of any relevance,

Yes indeed, but the difference in yield between the VG and Fid. funds is 3.24% vs 5.04%.

"Yield " will be very misleading in this case.  It is a calculated number based on the current market price and interest/dividends in the past year.  It is not a prediction.

So with interest rates having changed a lot in the past year the calculated yield will be highly dependent on exactly when the interest was paid.  If the interest was paid once a year 11 months ago the Yield will be very different to it would be if it was paid once a year last month.

aroominyork

Very little difference in 3 month performance between Fidelity, RL, Vanguard and CHS2 (SmartOverngt), although something gave RL a bump upwards early in the period. But at current interest rates, 1.3% increase in 3 months = 5.2% annualised.

masonic

mda99das said:

There are gilts that have better returns and also fixed rate bonds available on the Raisin platform, however the only issue is the deposit protection is 85k so may need to use several providers. My worry is that the UK has got a huge pile of debt and at the long end of the yield curve, the cost of borrowing is crazy. In the US they don't really issue ultra long debt like we do over here so they can just let it mature. However if they buy back those long dated bond, prices go up but yields drop so they fix long term debt. Do they sell short dated to buy long dated?

There is an issue in that the UK's asset purchasing scheme is currently buying up debt at the long end of the curve, driving down prices. As you say, the US is just letting short-dated Treasuries mature without issuing more. This isn't something that's going to be a concern for someone in a MM fund, or even someone with individual gilt holdings (save for the possibility of them missing out on even better pricing in the future). It is a problem for holders of funds containing long-dated gilts. The cost of borrowing is of course an problem for the Treasury and consequently all of us taxpayers, but not something that can be solved through our investment decisions.