In these turbulent times, you must be looking for low-risk investments to grow your money in the short term. Due to the pandemic, investing in the Philippine Stock Market at this time may not be for the faint of heart, even for the already seasoned, aggressive investor.
A low-risk investment you can consider is a Money Market Fund. Instead of parking your money in a savings account, you can park your money in this type of fund and generate better returns while being liquid (you can invest and pull out your funds easily at a day’s notice) at the same time.
This fund aims to achieve short-term growth by investing in bank and government securities. It is intended to offer investors returns higher than a traditional savings account with a low level of risk.
We’ll discuss one by one below why you should invest in a Money Market Fund amidst the pandemic in 2020:
You can invest and pull out your funds easily at a day’s notice. This is very convenient for investors who want to withdraw their investments immediately whenever a need arises. In uncertain times like this, it is better to keep a portion of your investments as liquid as possible so you can use it for unexpected needs and or emergencies.
It has higher returns compared to a regular savings account. A regular savings account usually has a <1% interest rate annually wherein a Money Market Fund has an estimated 2-3% YTD* return (as of August 20, 2020 for the SB Money Market Fund).
If you park your P100,000 at the start of the year in regular savings account for a 0.125% interest rate, then you will just get a measly P125* additional interest earnings. That’s a total of P100,125 at your bank account at the end of the year.
Now let’s compare it to a Money Market Fund. If you invest P100,000 in January 2020, you will get P2,000 in additional interest earnings at the end of the year (considering a conservative 2% returns). That’s a total of P102,000 at your bank account at the end of the year. That’s not bad!
You can start to invest for as low as P10,000. There are other kinds of Money Market Funds here in the Philippines that offer a lower minimum initial investment.
A Money Market Fund is handled by a professional fund manager. They constantly monitor the market for opportunities to make the best out of your investment.
You can check the performance of your investment daily with its Net Asset Value per Unit (NAVPU). The NAVPU is computed at the end of each Banking Day and will be made available to investors the following banking day. You can check the NAVPU via a bank or brokerage’s website.
Instead of parking all your funds in a traditional savings account, you can grow your money with a Money Market Fund instead. This is perfect if you are looking for a short-term and low-risk investment to grow your money amidst the pandemic. Also, you can withdraw it easily at a day’s notice whenever an emergency or unexpected need arises.
If you are interested in this short term and low-risk investment, consider investing in our SB Money Market Fund. This is perfect for investors who:
See our infographic below for more details:
Interested? Start investing in our SB Money Market Fund!