What is a Money Market Fund?
Money Market funds (MMFs) invest in a large basket of short term bonds from financial institutions or governments. Lightyear offers funds with highest ratings that can be assigned to a product of this type, to see the specific rating of an MMF go to the relevant instrument page and scroll to the Exposure section.
Things to know about MMFs
- MMFs are not traded on an exchange, instead these funds are traded with the issuer itself and priced daily
- All MMFs orders fill (settle) once a day after 10:30 (CET), anything placed after 10:30 will stay pending until the next trading day's cutoff
MMFs, while highly liquid, are not cash deposits and come with their own risks. As with any investment, your capital is at risk and you should seek professional advice if unsure.
Availability and minimum order
MMFs might not be available in all the countries where Lightyear operates and the minimum amount you’d need to place an order in an MMF is 1€/£/$.
Fees and interest
- Fund size is the total market value of the assets (both invested and held in cash) possessed by the fund
- Yield is displayed at the very top of the MMF page, where with ETFs or stocks the last known trading price is
- 1-day yield is the average rate of return of this fund over the prior day, if held for one year. It’s calculated by multiplying the daily dividend factor by 365
- 7-day yield is the average income return over the previous seven days, if the rate stays the same for one year. It's calculated by taking the accumulated dividend factor for the past seven days, multiplying it by 365, then divided by 7
- For all fees and potential for earnings when putting your money in a specific MMF, go to the relevant instrument page and scroll down to the % Interest calculator in the app. See also our Pricing page
- Net asset value (NAV) is a calculation used to understand the per-share value of that fund
Interest
The distribution is paid to your Lightyear account on the first business day of every month.
Taxes
Lightyear cannot give tax advice as it always depends on your personal circumstances and local tax laws. Returns earned from MMFs may be classified differently depending on your jurisdiction and tax authority you’re reporting to. Seek local professional advice if unsure. See more about this topic here: Taxes and statements.
How do I find an MMF in the Lightyear app?
- In the Explore tab under the Discovery section
- Tap on “MMFs” filter below search bar to filter your search results
- Write the name of the MMF you’re looking for into the search bar
- Type "MMF" into the search bar