USD money market fund

[gaijin]

I was planning to invest a one time amount of 15k USD. I entered a limit order for purchase of VT. This limit order did not get not executed. In the meantime the price of VT has skyrocketed, so I'm hesitant to purchase VT at such a high price. I therefore have a cash balance of 15k USD on my IB account. In regular intervals I get emails from IB reminding me to invest this money in money market funds. See attached.

Previously I have invested in US T-Bills (see attached). These have a certain duration. However, I have no idea about USD money market funds. Do these funds have a guaranteed return and can be purchased and sold flexibly? The link in the IB email leads to a search website which is not super helpful either. See attached. I would have expected a list of such money markets funds instead.

Do you have any suggestions for such a money market fund that might fit my purpose?

 

[Rttm]

BOXX

Cboe:BOXX

Alpha Architect ETFs

funds.alphaarchitect.com

It’s an ETF that invests in options to replicate the risk-free rate. It’s great because it doesn’t pay dividends, so you don’t have to pay taxes, unlike most other ETFs.

 

[Baptiste Wicht]

If you have enough invested value, you should get an interest rate on your cash (above 10k). I would personally just do that.

Money market funds are very liquid, no problems there, but no guaranteed returns, this varies with reference interest rate.

I entered a limit order for purchase of VT. This limit order did not get not executed.

Another good reason for a market order

 

[gaijin]

you should get an interest rate on your cash (above 10k)

Yes, but for 15k, I only get interest on 5k. The bigger part (10k) remains without interest.

Another good reason for a market order

Doing market timing is sometimes just too tempting

 

[gaijin]

BOXX

Thanks! I have bought 100 units.

 

[Baptiste Wicht]

Thanks! I have bought 100 units.

Please let us know how it went after you exit it.

 

[Denis]

i suggest this isin

LU0052767562

 

[gaijin]

i suggest this isin

Thanks for the suggestion. Any reason for suggesting it?

 

[Denis]

well this fund is efficient and provides nice performance at low cost

https://www.swissquote.ch/trading-platform/#fullQuote/LU0052767562/10_USD

cost 0,25%
per ytd 1,10%
3 yr 14%
10 yr 22 %

 

[Denis]

interesting article

Money market ETFs versus bond ETFs: why bonds win

The bond crash of 2022 caused investors to take refuge in money market ETFs. Here’s why that leaves money on the table

www.justetf.com

 

[gaijin]

interesting article

Money market ETFs versus bond ETFs: why bonds win

The bond crash of 2022 caused investors to take refuge in money market ETFs. Here’s why that leaves money on the table

www.justetf.com

I'm not fully clear about your conclusion from this article. Are you suggesting that the article provides arguments why LU0052767562 is better than BOXX?

 

[Denis]

this article is for information only

 

[gaijin]

Please let us know how it went after you exit it.

Happy to report my exit:

On 24 April I bought 100 units @ 116,50 > total 11'650 + 1 fee
Today I sold 100 units @ 117,61 > total 11'761 - 1,26 fee
Net profit: 109 or 0,94%. That's an annualized 3,6-3,7% profit.

This is lower than what I expected. A 3-month T-bill would have given me 3.96% interest.