$Fullerton SGD Cash Fund (SG9999005961.MF)$ this fund is not...
$Fullerton SGD Cash Fund(SG9999005961.MF$ this fund is not compunding interest right??
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mirestige : It's compounding. But then technically it's not interest. It's the nav of the units you hold increasing every day. So it behaves like it's compounding
hehe56 mirestige : hi, could u explain more in details of this in layman terms, of the interest being "compounded" and how this funds exactly works? it would be super helpful to me, thanks so much!
103997595 hehe56 : You could think of this as a bank account that credits interest to you, but daily instead of monthly. NAV doesn’t really matter for cash fund (imo)
In addition, returns are calculated based on the performance of fund. Usually for every 10k sgd, returns are average $1 per day, some days below $1 some days above $1.
mirestige 103997595 : This is the easy way of explaining. The actual mechanism are as follows
I give example bah. If at Day 0 NAV is $1 you buy $1000 worth, you get 1000 units.
Day 1 the NAV raise to 1.01 (1%). So your holdings is worth $1010 now. The $10 is the so call "interest"
Day 2 if the NAV raise by another 1% to $1.0201, your holding is now worth $1020.1. The $10.1 extra is the "interest" for second day. So you can see you get 10 cents more than the previous day. It's as though it's compounding.
That's why cash fund are not risk free. NAV can go down and you see it as negative interest.
In short the interest shown per day is just a difference of your holding now compared to previous day.
If you want to say withdraw $50, they calculate how many units they need to sell to get the $50 and sell it for you.
It's like buying shares actually, just that normally it will go up everyday within a range (3.7% pa is about 0.01% NAV increase per day), while shares are volatile. 0.01% of $10,000 is $1. That's why we normally say 10k nets you $1 per day.
You see the attached picture, most days it's 0.01% (rounded up to 2 decimal point for display, it's actually lesser) increase. The 0.03% is for Tuesday when you get 3 days worth for Saturday, Sunday and Monday.
When I get into these, about half a year ago, I am also wondering how this interest works, and when I sell how it works. Then I go look at the data and calculate how those numbers are derived. But then I started out with mari invest. They provide details like how many units you bought and what's the nav upon purchase.
slank mirestige : lets say i put 10k for three months. so at the end lf three months i will have around 10180. can i withdraw everything? and how do i check the current price of NAV?
mirestige slank : Yes you can withdraw everything. After 3 months you at most have 10090. 90 days, +/- $1/day.
Your final value = capital * 1.0001^n, where n is number of days and assuming everyday gain is 0.01%. This got calculate the "compounding"
Just click here.
slank : thanks this really helpful! one last question how do i withdraw my fund? i only see the subscribe button but not the withdraw
mirestige slank :
Master Corgi mirestige : Fullerton cash fund had not had a negative day yet
Master Corgi slank : Of course you can withdraw everything. Actually don’t have to worry many put here for a long time and only became positive
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