Everyone is talking about alternative means of income and investing rather than saving is a popular phrase everyone knows. The question is how should people invest and where should they invest? Asset classes abound in the market. From real estate to equity, government instruments and so on. But how can ordinary Nigerians get on the investment ladder? How can ordinary people who don’t have the high capital and time benefit from investment? How can money be invested and yet accessible when the need arises?
Of all these asset classes, the Money Market Fund (MMF) is an investment vehicle that can answer the questions above. Investing in money market fund is a profitable and relatively simple way to earn more from your savings. Money market funds are a collection of investment in stocks, bonds, and other securities. They are created when a company brings together a group of people and invests their money in a group of securities.
The money market fund performance is actively managed by professional fund managers to give the benefit of investing to ordinary people who do not have the expertise, risk appetite, huge capital, and time to invest in traditional asset classes.
AXA Mansard has curated a list of 6 advantages of investing in money market fund as seen below:
- Competitive returns– The Money Market Fund provides attractive and competitive returns when compared to a conventional savings account. It is an ideal investment that seeks to achieve real returns that seeks to outgrow inflation and maintain the purchasing power of investors.
- Expert fund managers – Following and accessing real-time market activities could be time consuming and confusing, for ordinary investors. By investing in Money Market Fund gives you the benefit of having a dedicated team of portfolio managers who are financially savvy and have enough experience to make the best financial decisions to achieve the fund’s objectives. In addition, there is an investment committee that monitors the fund’s activities and performance on a regular basis.
- Low risk & safety – The money market fund is a pool of funds from different investors and these pooled funds are invested in a range of investible money market securities such that investment risks are diversified. Since they are so diversified in their selection of securities, investments in money market fund are low risk. If one asset class within the fund is not doing well, the other assets will continue to grow the portfolio. The advantage of diversification is that it further reduces the chances of losing money, whilst achieving the best risk-adjusted return.
- Low Barrier to Entry – Money market fund is relatively affordable. Low entry point is one of the biggest advantages of investing in money market funds. You can start investing in a money market fund with as low as N2,000 depending on the fund manager, and continue to add to your investment portfolio as you want. You can earn a steady stream of income without necessarily investing substantial amounts.
- Liquidity – If you invest money in money market fund, you can withdraw your funds with a 24-hours’ notice on any business day. And if you invest with AXA Mansard, your withdrawal won’t just be as prompt as your savings account, you can carry out all the regular transactions such as paying bills, that you do from your savings account, from the My AXA App. This is the advantage money market fund has over equity income fund, that is more long-term and has fixed maturity period.
Investing in money market fund will provide you with economies of scale as an investor. Since you are investing in a large pool of fund with fund managers, the risk of losing your investment is low.
If you want to know more about AXA’s investments plans, please visit AXA Mansard website at www.axamansard.com to get started.