Royal London Money Market fund

HarryIb

I have about £9k invested in the Royal London Short Term Money Market (income) fund. It supposedly grows at 4% annually, with payments added each day, so that's just over £1 added to the fund on a daily basis - except following a bank holiday, when all of the last few weeks' increases are wiped out. This has now happened twice, following each bank holidays since I purchased the investment, in July this year. I've had an 'equalisation payment' of a few pounds, but this didn't make up for the post-bank holiday loss. Can anyone shed any light on this issue? I'm thinking the fund is not all it's cracked up to be - currently the most popular investment on the ii platform.

poblomov

If you've got income units, the price goes down at the beginning/end of each month when they pay out the income.

Haven't got an ii account myself. If they have separate income and capital accounts, have a look in the income account for the distributions

k_man

That sounds like the monthly 'dividend' as you hold the income version of the fund.
If you don't want the income now, and don't want to manually reinvest every month, then the Accumulation version may be more suitable.

How long have you held this fund, as this happens each month?
See ii fund details linked below, set to Chart type price rather than Total Return

https://www.ii.co.uk/funds/royal-london-short-term-money-mkt-y-inc/B3P2RZ5

Woodstok2000

https://forums.moneysavingexpert.com/discussion/6681820/royal-london-money-market-fund

You say 'wiped out' but isn't that just because they've paid you the income? They cant pay it out and retain it in the fund.

wmb194

https://forums.moneysavingexpert.com/discussion/6681820/royal-london-money-market-fund

I think you're referring to the fund in the link below (Y Inc): August hasn't yet been added but look at the dividends tab. It goes ex-dividend on the first working day of the month and pays it to your broker/platform on the last. Brokers/platforms can often be slow to credit customer accounts, though.

https://www.trustnet.com/factsheets/O/RD05/royal-london-short-term-money-market-y-inc

HarryIb

Okay, problem solved - I think. Thanks for the advice. I've had two payments, an income payment and an equalisation payment, both made on the same date, which when added to the current fund value bring it back to the expected value based on a 4% annual increase, paid daily. I've had the investment since early July and it appeared as though the capital value reductions, at the beginning of August and now at the beginning of September, were linked to a bank holiday; presumably this was not the case.

eskbanker

I have about £9k invested in the Royal London Short Term Money Market (income) fund. It supposedly grows at 4% annually

It doesn't "supposedly grow at 4%" as such - it aims to track the SONIA benchmark, which is close to the Bank of England base rate, at 3.73% versus 3.75% currently, but both are of course variable.

https://www.bankofengland.co.uk/markets/sonia-benchmark

LHW99

It pays interest monthly, but II can be a bit variable as to how quickly the payment shows.

HarryIb

https://forums.moneysavingexpert.com/discussion/comment/82123647#Comment_82123647

That's what originally made me wonder about it. For me, the first decline in value occurred on 4th August, but there was no dividend/equalisation payment until 28th August.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82123732#Comment_82123732

That suggests some reading about how investments work would be in order. Funds declare a dividend, set an ex-dividend date, and a later distribution date. There is nothing unusual in that.

PixelPound

You need to go for the accumulating version if you want it to stay in the fund and grow