NTUC Income Money Market Fund (Flexi-cash)

Dear Mr. Tan,
I have been a close follower of your blog site for the past 1.5 years. Based on the blog postings, I have invested a significant portion of my savings in NTUC Income's Flexi Cash Policy.

The NTUC Income website describes the Flexi Cash Policy as being "As Safe as a Bank Deposit" and "virtually impossible to lose your capital." I understand that the underlying investments are the Money Market fund, and the top holdings of the fund are in Government Bonds and High Quality Corporate Bonds.

However recently I have seen the fund price drop from 1.091 to 1.090 to 1.089. I am concerned because the fund's past trend has been to slowly increase upwards in small increments. This is the first time the fund has been dropping continuously, and with current events, I guess there is a lot of fear and uncertainty in the market.

I would like to ask for your advice on whether I should hold on to my investment or to liquidate and convert to cash as I am worried about further losses.

REPLY
The drop is small. It is probably due to an increase in interest rate. I think that there is no need to worry about it.

If you are still unsure, I suggest that you write to ask NTUC Income to tell you the reason for the drop in price. You can also ask them to confirm that the fund is still invested in high quality assets.