Money Market Funds Explained

If you want to protect your investments against the volatility of the stock market while still getting inflation busting growth then money market funds could be for you.

In this video, I explain what money market funds are and why they could be a good option for protecting your investments during retirement.

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Timestamps
0:00 approaches to risk
1:28 government bonds
1:46 cash
2:22 Money Market Funds
3:39 Best yields

[Kalarandir]

Perfect timing Dianne. I will be moving 5% of my pension from stocks to a money market fund as part of my January re-balance.

[lrac]

I use MMF in my sipp, I took early retirement and my portfolio suffered when the bond market crashed, it's come back drastically now and feel getting over 5% in a MMF is brilliant for my needs, I sold half of my 20/80 fund into a short term sterling money market fund in vanguard and it's been great 👍.

[pip]

I'll be keeping my investments in retirement in the ftse global all cap index and the sp 500 it's worked for me for year's so why change .

[DixieDaydreamer]

One of the reasons after 4 years of management my pensions and driving myself crazy trying to understand the nuances of fund managemnt, I signed up with an IFA. It took about 9 months, half a dozen meetings, I got to see a full breakdown of fund selection before I signed anything and it was based on a 60-90 min risk evaluation he performed on me. I've just guessed my way through my fund management on my pensions and now as I hit early 50s it's time for a full workshop tune-up, get a proper "mechanic on the engine so my ride" is ready to carry me into and through retirement!

[khiburgess]

Buy a Gilt hold till maturity, interim volatility is irrelevant. Just buy below par. An elegant solution to sequencing risk

[dhalcro]

Great video, I have MMFs with about 3 years money

[MakeItCount-]

Money market funds make good sense to me as part of your "Cash" assets. I actually prefer them to Gilts. I hold both the Vanguard MMF and a MMF with InvestEngine. Forms part of my "Bucket 1", which I have quite well stocked (3 years of expense) because I believe the markets are frothy.

[johnforrest]

Just reconfigure one of my SIPPS, with a 'Deposit & Treasury fund (20% of).This D&T fund will cover current drawdown amount, for 62 months till hopefully getting a State pension. Put another 20% in an indexed linked bond fund leaving the other 60% in equity oeic based funds ( this SIPP provides approx 1/16th of my pension income.)
We have that Royal London STMM fund, but mostly in ISA providing retirement income...

[se]

I've been 100% equity, but now the market is looking toppy so am moving some into MMF, currently about 16% and will increase further in coming weeks.

[MrKlawUK]

do you have a video that talks about eg a small DB pension and state pension as alternatives to the ‘bond’ portion and how it might affect the % of your portfolio you can safely keep in equities?

[martinh]

I use MMF's to keep my "dry powder" money working, especially as some platforms, eg Halifax don't pay interest on cash in a S&S ISA

[DavidLee-uhxz]

Does this fall into the too good to be true category and I wonder if the credit risk is understated - assuming 4% Gilt income then to average out at 5% + there must be more corporate bonds in the fund?

[wetelbow]

Put cash in a high interest account just to keep at or just above inflation and the government still take a chunk.

[jayt]

Cash mngmnt account is better 4.8 to 5% p.a. and no fees. Easy access whenever you need. Im in Australia so I don't know what you have in the UK.

[clarenceishmael]

If you withdraw money from your ISA to a Money Market fund, would this trigger a tax payment? 🤔

[benjones]

You can buy one month Treasury Bills with Freetrade inside your sipp. About as safe as you can get. I'm not moving out of 100% Stocks. I think 2025 will be OK 👍

[hectorheath]

The idea that a long term investment in shares irons out any bumps is laughable to me. I invested £6000 into Lloyds shares about 40 years ago, they're now worth circa £1000 and have been at that level shortly afterI bought them.