Money Market Funds
These funds are designed to maintain daily liquidity and always return positive
growth. This growth is likely to be only marginally higher than the London Interbank Offered Rate
(LIBOR) which is the rate at which banks lend to each other. This is because the instruments in
which these funds invest are the same instruments that banks and large corporations use to fund
their short term liquidity.
Money market funds were initially designed for professional investors with a significant
amount of cash to invest. They are considered to be secure and offer daily liquidity. Therefore,
these funds are most suitable for investors with a significant amount of capital that takes
them above the Government guaranteed £50,000 maximum under the Financial Service Compensation Scheme.
Some funds have attempted to increase the yield by buying less liquid securities or securities with
lower credit ratings. Cash funds, in our opinion, should seek to guarantee capital first before
seeking a higher yield. None of the funds we have recommended have suffered falls in price.
| Money Market Funds |
Gross Redemption Yield |
As of |
Yield Net of Fees |
Dealing/Notice |
Net Lower rate tax |
Higher rate |
|
BlackRock Institutional Cash
|
0.64%
|
08/03/2010
|
0.44%
|
Daily
|
0.35%
|
0.28%
|
|
Fidelity Institutional Cash EUR
|
0.42%
|
08/03/2010
|
0.27%
|
Daily
|
0.22%
|
0.17%
|
|
Fidelity Institutional Cash GBP
|
0.55%
|
08/03/2010
|
0.40%
|
Daily
|
0.32%
|
0.26%
|
|
Fidelity Institutional Cash USD
|
0.25%
|
08/03/2010
|
0.10%
|
Daily
|
0.08%
|
0.06%
|
|
Goldmans Sachs Sterling Liquidity
|
0.57%
|
08/03/2010
|
0.42%
|
Daily
|
0.34%
|
0.27%
|
|
Insight ILF GBP Liquidity 4 Acc
|
0.59%
|
08/03/2010
|
0.34%
|
Daily
|
0.27%
|
0.22%
|
|
Insight ILF GBP Liquidity 4 Inc
|
0.59%
|
08/03/2010
|
0.39%
|
Daily
|
0.31%
|
0.25%
|
|
JPM Sterling Liquidity A
|
0.56%
|
08/03/2010
|
0.01%
|
Daily
|
0.01%
|
0.01%
|
|
JPM Sterling Liquidity Inst
|
0.56%
|
08/03/2010
|
0.36%
|
Daily
|
0.29%
|
0.23%
|
Bestinvest (Brokers) Ltd & Bestinvest (Consultants) Ltd are authorised and regulated by the Financial Services Authority