Fidelity's SPAXX is a money market fund that has been around since 1990, and boasts total assets of $219.95 billion. It primarily invests in short-term U.S. government securities and securities issued by entities that are rated in the highest credit quality. The 7-day yield is currently 2.57%, compared to 3.87% for SPAXX at Fidelity.
Fidelity also has money market funds available to investors. The fund they offer (SPAXX) charges 43 bps per year and yields 3.9%, compared to 4.2% for other funds. This is because Fidelity's SPAXX government-backed fund is subject to higher expense ratios, resulting in a lower yield rate.
For investors in a high tax-bracket, Fidelity's SPAXX can be a great option as it pays 2.58% SEC and rising. Cash is only supposed to be a temporary parking place, so the higher yield can be beneficial.
For those looking for a more aggressive approach, investing in ETFs may be a better option. ETFs have the potential to yield higher returns than money market funds like SPAXX, but it also comes with more risk. The ETFs would have to pay at least 3.9% to match the yield of SPAXX.
@Djggml suggested $SPAXX as a modern income investor, as it pays 2.5% currently without share price risk. Fidelity's SPAXX pays 1.77% SEC and rising, both money market funds. This is a great option for investors looking for liquidity and security.
In addition, investors should compare the yields and returns of other money market funds with SPAXX. Funds like Fidelity's SPAXX have the potential to yield higher returns, but come with higher expense ratios. investors should weigh the pros and cons of each option before investing.
While SPAXX is a great option for investors looking for a conservative approach, it is important to remember that money market funds have their own set of risk. Money market funds are subject to the risk of default, and can be subject to fluctuations in interest rates.
investors should also be aware of the fees associated with money market funds. Fidelity's SPAXX charges 43 bps per year and as such yields 3.9%, rather than the 4.2% for other funds. investors should research the fees associated with each fund before investing.
It is also important to understand the underlying investments of the fund. Fidelity's SPAXX primarily invests in short-term U.S. government securities and securities issued by entities that are rated in the highest credit quality. This means that the fund is subject to the risk of default, and can be subject to fluctuations in interest rates.
investors should also be aware of the liquidity of the fund. Fidelity's SPAXX has a 7-day yield of 2.57%, compared to 3.87% for SPAXX at Fidelity. investors should research the liquidity of each fund before investing.
When comparing yields and returns of money market funds like SPAXX, investors should also consider the management of the fund. Funds like SPAXX are managed by professional managers who make decisions about investments and trades. They should also research the performance of the fund over time to get an idea of the fund's track record.
Finally, investors should consider the risk-reward ratio of the fund. Funds like SPAXX may offer higher yields, but they also come with higher risk. investors should weigh the pros and cons of each option before investing.
In conclusion, Fidelity's SPAXX can be a great option for investors looking for liquidity and security. investors should compare the yields and returns of each money market fund before investing, as well as understand the fees, liquidity, underlying investments, and management of the fund.
With a 7-day yield of 2.57%, Fidelity's SPAXX can be a great option for investors looking for a conservative approach. However, investors should research the fees, liquidity, underlying investments, and management of the fund before investing.
