Lower return from Money Market fund

Hi Mr Tan,

The price of the money market fund of NTUC Income has been stagnant at $1.065 for the past 13 days. It seems this is the longest period of being stagnant since the past few months. Will this be the start of trend for the future and hence reduced return?

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REPLY FROM NTUC INCOME:

The inter-bank interest rate has come down during the past week. The current rate is around 2.2% p.a.

The unit price of the money market fund has stayed at $1.065 price stayed for 13 days. It has since moved to $1.066 on 5 June 07.

Based on the price movement, the fund provides a reasonable good return without any locked-in period.

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REPLY FROM TAN KIN LIAN

I am still keeping my personal savings in the money market fund. Although the return has fallen to about 2.2%, it is still better than fixed deposit rate (which has fallen as well).