Cash is one of key building block to a diversified investment portfolio. Especially in the scenirio of emergencies. As we all know, holding too much or too little will affect our investment goals. Unfortunatly for the majority, cash is left accumulating in their banks because they do not know what to do with it or fear losing the hard-earned money.
The current saving interest is only a meagre 0.5 percent, with inflation for 2025 forecast at 2 percent in China.
Money market funds is an increased appetite. If you desire stability and liquidity, MMFs are bIn fact, the benefits of MMFs is better than government treasury bills, fixed deposits or saving bonds. MMFs is less volatile than stocks and bonds.
The yield for MMFs is around 2.5% ~4%, depending on the fund and risk profile.
Many unvestors use both in a balanced portfolio: MMFs for short-term cash needs and mutual funds for long-term growth. But for the retirement planning and long-term stability, mutual funds suit investors with a longer time horizon and higher risk appetite.
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