Money Market Funds ?

SloughSally

I am considering switching about £50K held  within an ISA account with iweb in VL60 to a money market fund , possibly Vanguard Short-Term Money Market Fund -Accumulation.
1. Would the procedure to keep the ISA status  be to simply sell the VL60 and buy once Iweb has credited the cash to my ISA account or would I need to do some kind of transfer?
2. Is the  OCF / risk factor is 0.12% competitive?
3. Are there any other MMFs that can be held within an ISA account with iweb that are worth considering eg different currency.
4. What are the main downsides of MMFs apart from the possible cut in Central banks interest rates?
5.Would any interest rate cut impact immediately or take a month or two to kick in due to short term rates already acquired.
Thank you .

Exodi

SloughSally said:

I am considering switching about £50K held  within an ISA account with iweb in VL60 to a money market fund , possibly Vanguard Short-Term Money Market Fund -Accumulation.
1. Would the procedure to keep the ISA status  be to simply sell the VL60 and buy once Iweb has credited the cash to my ISA account or would I need to do some kind of transfer?
2. Is the  OCF / risk factor is 0.12% competitive?
3. Are there any other MMFs that can be held within an ISA account with iweb that are worth considering eg different currency.
4. What are the main downsides of MMFs apart from the possible cut in Central banks interest rates?
5.Would any interest rate cut impact immediately or take a month or two to kick in due to short term rates already acquired.
Thank you .

1. Yes, sell and buy.
2. Yes - it's the same as Vanguard charge on their own platform and one of the cheapest alongside competitor funds (Royal London is slightly cheaper).
3. Yes - https://www.markets.iweb-sharedealing.co.uk/investments-search/?term=money+market
4. Lack of upside potential.
5. Not instantly, returns depend on the underlying short term debt instruments.

OldScientist

1) Yes, it is as simple as selling VL60 and buying the other fund.
2) Yes, the OCF is similar enough to other short term MMFs (e.g., see 3)
3) Not in another currency, but Royal London Short Term Money Market Y Acc is a good alternative (OCF=0.10%). We hold both the Vanguard and Royal London funds.
4) Under certain, fairly extreme, circumstances, they can be illiquid (in other words you might not be able to sell when you want to) although such circumstances might also present problems for normal savings accounts. STMMF are NOT covered by the FSCS (e.g., see https://www.ii.co.uk/analysis-commentary/nine-things-know-about-money-market-funds-vs-cash-savings-ii524341 ) in the same way savings accounts are
5) Depending on the holdings, it might take a month or two for the growth to fall to the new interest rate.

SloughSally

Thank you both very much for your informative replies.
Exodi, within the link you’ve given me regarding available STMMFs available with iWeb the Vanguard MMF has a FE fund info rating of two crowns, the other 6 products all have 4 or 5 is that significant?

dunstonh

b the Vanguard MMF has a FE fund info rating of two crowns, the other 6 products all have 4 or 5 is that significant?

It shouldn't form any part of your research.  Completely ignore them.

SloughSally

The daily valuation time for Royal London short term money market fund Acc  is 12:00, so if I put in an order after this time today I assume I’ll be paying Mondays  price.
Normally the price rises around  0.01p per day , but will it increase approximately 0.03p on Monday taking in to account the weekend ?
Thank you. 

To answer my own question yes it will I’ve just checked the last months price graph and it a steady straight line each Monday to Friday then a steep  rise between Friday to Monday, so I think I’ll be paying the equivalent of 3 days rise  in price (interest)

chiang_mai

dunstonh said:

b the Vanguard MMF has a FE fund info rating of two crowns, the other 6 products all have 4 or 5 is that significant?

It shouldn't form any part of your research.  Completely ignore them.

What is your basis for instructing others to ignore a propietary risk assessement system? I personally find many such systems helpful to compare and contrast/confirm findings and to identify anomalies that require further research. The Fundinfo platform is one of the largest around: "fundinfo offers the largest fund information and document library in Europe & Asia, hosting over 95 million fund documents and covering data on over 410,000 share classes". https://www.fefundinfo.com/products/institutions/fundinfocom

Bostonerimus1

chiang_mai said:

dunstonh said:

b the Vanguard MMF has a FE fund info rating of two crowns, the other 6 products all have 4 or 5 is that significant?

It shouldn't form any part of your research.  Completely ignore them.

What is your basis for instructing others to ignore a propietary risk assessement system? I personally find many such systems helpful to compare and contrast/confirm findings and to identify anomalies that require further research. The Fundinfo platform is one of the largest around: "fundinfo offers the largest fund information and document library in Europe & Asia, hosting over 95 million fund documents and covering data on over 410,000 share classes". https://www.fefundinfo.com/products/institutions/fundinfocom

Part of investing is indeed understanding risk and knowing how to spend your time. I don't think you are using your time efficiently by researching a Vanguard MMF so deeply.

chiang_mai

Bostonerimus1 said:

chiang_mai said:

dunstonh said:

b the Vanguard MMF has a FE fund info rating of two crowns, the other 6 products all have 4 or 5 is that significant?

It shouldn't form any part of your research.  Completely ignore them.

What is your basis for instructing others to ignore a propietary risk assessement system? I personally find many such systems helpful to compare and contrast/confirm findings and to identify anomalies that require further research. The Fundinfo platform is one of the largest around: "fundinfo offers the largest fund information and document library in Europe & Asia, hosting over 95 million fund documents and covering data on over 410,000 share classes". https://www.fefundinfo.com/products/institutions/fundinfocom

Part of investing is indeed understanding risk and knowing how to spend your time. I don't think you are using your time efficiently by researching a Vanguard MMF so deeply.

I'm not researching anything, others are doing that!

If the complete answer to the question is whether the FE Fund rating system is not relevent in this instance, that makes sence and I might agree. But I read the statement as to ignore FE Fund rating in any research, period.  

GeoffTF

chiang_mai said:

dunstonh said:

b the Vanguard MMF has a FE fund info rating of two crowns, the other 6 products all have 4 or 5 is that significant?

It shouldn't form any part of your research.  Completely ignore them.

What is your basis for instructing others to ignore a propietary risk assessement system? I personally find many such systems helpful to compare and contrast/confirm findings and to identify anomalies that require further research. The Fundinfo platform is one of the largest around: "fundinfo offers the largest fund information and document library in Europe & Asia, hosting over 95 million fund documents and covering data on over 410,000 share classes". https://www.fefundinfo.com/products/institutions/fundinfocom

I agree with dunstonh. The number of crowns that Morningstar gives a fund has not been a useful indication of its merit for the funds that I have looked at.

When I looked at MMFs, I came to the conclusion that Vanguard was a little more conservative than the competition, with slightly lower returns as a result, but that may have changed. Vanguard is a perfectly reasonable choice, but I chose Royal London.

Albermarle

chiang_mai said:

dunstonh said:

b the Vanguard MMF has a FE fund info rating of two crowns, the other 6 products all have 4 or 5 is that significant?

It shouldn't form any part of your research.  Completely ignore them.

What is your basis for instructing others to ignore a propietary risk assessement system? I personally find many such systems helpful to compare and contrast/confirm findings and to identify anomalies that require further research. The Fundinfo platform is one of the largest around: "fundinfo offers the largest fund information and document library in Europe & Asia, hosting over 95 million fund documents and covering data on over 410,000 share classes". https://www.fefundinfo.com/products/institutions/fundinfocom

These crowns are not indicative of the risk AFAIK. They are a kind of rating system ( like the number of stars a hotel gets on tripadvisor)