I have $19k that I'd like to park for short-term (8 months - 2 years) for a personal need and Money Market Funds seem to be right option for me vs. dividends etc. This would be my emergency fund. (Minus liquid for 3-5 months that I keep in bank account)
I'd prefer them to be distributing (my understanding being interest paid out periodically) but fine if they're accumulating as well.
I already have some investments in ETFs. Interest rates are atrocious in Dubai and I'd rather not keep the funds here anyway.
Most of the information I come across is aimed at US investors followed by the Europeans.
I might be in a unique situation as:
a) There are no personal/federal taxes in the UAE.
b) USD:AED are pegged so there should not be currency risk. Importantly, I'd like to keep my investments in the USD anyhow as I am more bullish on it than other global currencies.
In this case, which money market fund would you recommend? I am unable to buy ever so popular SPRXX, SPAXX, FDLXX -- IBKR gives me a 'Residency restriction' for them.
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My options seem to be US T-Bills for 1 year or IB01 (Expense Ratio: 0.07%, Yield: 5.30%), however I feel I might be missing something here?
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What happens if interest rates go down within 1-2 year while I am holding them?
Any recommendations?
Submitted November 23, 2023 at 01:58AM by Vibgyor_5 https://ift.tt/clAmZBd
