The funds themselves are designed never to lose money, but some funds incur losses due to their fees. In addition, funds are unsecured, their value fluctuates frequently, and the fund may not repeat past performance.
There is no guarantee that a money market fund will be able to maintain its net asset value per unit at a constant level or that you will get back your entire investment. Therefore, if you are a long-term investor and your money is held in a money market mutual fund, the fund’s minimum return potential will limit your long-term upside potential. In addition, the value of your investment may decrease due to market conditions.
Fixed income investments are subject to interest rate, credit, market and issuer risks. While money market ETFs invest most of their funds in cash-equivalent or highly rated securities with very short maturities, some may support some of their holdings in longer-term or lower-rated securities. These funds typically invest in high-quality and highly liquid short-term debt instruments such as U.S. Treasury bonds and commercial paper, which do not normally generate significant returns.
In addition to low returns and high fees, money market funds lack guaranteed investment certificates (GICs) or high-interest savings accounts backed by CDICs. An alternative to a money market fund might be a savings account or GIC, which pays you a higher interest rate if you’re willing to freeze your funds for a period of time. However, putting that money into stock investing is too risky because you want to buy a home early, and market volatility could eat into some of your investment.
But it is a very safe fund to place assets during turbulent markets. The fund has 39 holdings, investing about 52% of its net assets of $14.9 billion in U.S. Treasuries. At least 80% of its assets are debt securities issued directly by the government in the form of Treasury bills. They may also be invested in other securities, including, but not limited to, agency debt or secured repurchase agreements for U.S. government bonds or cash.
The fees go towards fund management, administration and, in many cases, compensating the consultant who sold it in the form of a towing payment. In comparison, the index’s performance does not require management fees or operating expenses.
Canadian Money Market Mutual Funds & ETFs
The rates of return shown for each money market fund are annual historical returns based on the seven days ending as indicated and annual returns in the case of actual returns plus seven-day returns. Therefore, they do not represent actual returns for one year. Target monthly allocations are determined based on the target payout rate for the fund’s stated series. If the benefits paid by the fund exceed the fund’s performance, the benefits paid may include a return on capital, and the investor’s initial investment will be reduced. In addition, you can receive dividends in cash or reinvest them back into the fund.
Units in these funds are not available for purchase by new investors. Existing investors who hold Series H or Series I units may continue to make additional investments in the fund. In Canada, funds are only available to investors in provinces and territories to buy legally. The returns shown on this website are intended to illustrate the effect of compound growth rates only and do not represent the future value of the iShares ETF or the return on investment of the iShares ETF.
The information provided in this list may differ from the information about the fund’s holdings in its annual report. Before investing, read the fund data and the prospectus, which contains detailed information about your investments. Important information about each of the funds is included in the respective prospectus and should be read before investing. Copies of prospectuses are available from resellers who may legally offer funds in your province or territory.
The Fund does not pay a management fee for Series O units. Instead, series O unit holders pay a fee negotiated directly or indirectly with RBC GAM. No-load funds are available to individual investors through RBC Direct Investing and other discount brokers. These funds pay a management fee to RBC GAM. Like any other mutual fund, investors pay them according to an annual management fee (MER) based on a fixed percentage of the amount invested in the fund.
The goal is to ensure that the fund does not lose money and that any gains after expenses are paid are distributed to investors. Not all investments may be self-sufficient, resulting in extra work to make purchases or pay off funds. All Canadians need short-term investments, for somewhere to store their short-term savings, such as an emergency fund or money set aside for a significant purchase.
Suppose you are not interested in money market funds but still need liquidity. In that case, you may be better off opening a high-interest savings account with one of the Canadian online banks such as E.Q. or Tangerine. Then, boost your income by ditching money market funds and choosing a Savings Account Plus. Investors these days have options like the Savings Account Plus, which pays one of the highest interest rates in Canada on deposits with no fees.
Gold and gold-related stocks and funds can offer significantly higher returns if you need a haven for your investments when markets are volatile. Money market exchange-traded funds (ETFs) are necessary for many investors’ portfolios because they provide safety and capital preservation in volatile markets. A money market fund is a mutual fund that invests in highly liquid, high-quality money market securities with maturities of one year or less, such as Government of Canada Treasury bills, cash and cash equivalents.
Fund securities are not underwritten by the Canadian Deposit Insurance Corporation or other public insurance companies. The Asset List in the Portfolio provides information on the Fund’s investments as specified. The list includes any investments in derivatives but does not include the value of any cash collateral held for securities lent and other net assets of the fund. The top ten investments and top five issuers exclude cash, cash equivalents, money market instruments, options, interest rate swaps, fixed-income swaps and futures contracts.
The top ten or top five issuers of fixed income and money market funds are provided to illustrate examples of securities purchased by the fund and various areas in which the fund may invest, which may not reflect current or future investments. And may change at any time. Funds are ranked based on Morningstar risk-adjusted return scores, with the top 10% of funds in the category earning five stars, the wealthiest 22.5% earning four stars, 35% of funds earning three principals, and the bottom 22.5% earning two stars. The fund’s overall star rating is a weighted combination of 3-year, 5-year and 10-year ratings. The overall rating is adjusted if the fund’s history is less than 5 or 10 years.
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BMO Mutual Fund Performance