Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

For regular SAA and TAA portfolios, the next re-balance will be on Monday, September 24, 2018. You can also find the re-balance calendar for 2017 on ‘Dashboard‘ page once you log in.

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Please note that we now list the next re-balance date on every portfolio page.

Money Market ETFs?

At MyPlanIQ, we pay serious attention to cash and near term returns. In this newsletter, we explore whether some ultrashort term bond ETFs can be used as money market alternatives. 

The missing cash returns

We have addressed this topic several times in the past. The main complaint we have had is that in the US, many brokerages try to make money off clients’ cash in several ways. There are two main problems with cash returns in a brokerage account. 

  1. Lack of money market mutual funds: in the US, virtually all brokerages offer very few choices of money market funds.Many are very low yielding cash sweep accounts. Currently, one of the best money market fund Vanguard Prime Money Market Fund VMMXX (current yield: 2.07%, expense 0.16%) is only available to clients in Vanguard brokerage. You can’t access to this fund from other brokerage (note, some 401k plans offer this fund even though they are on some other platforms such as Fidelity benefit, but that’s a different story). If you are a Schwab client, you can only invest in its money market funds, ditto Fidelity, TD Ameritrade etc. 
  2. High expense ratios and low returns of many money market funds: we have done various comparison on this subject. Just a quick example: TD Money Market Portfolio has yield 1.3% (a select class is 1.5%), compared with Vanguard prime money market VMMXX’s 2.07%. We encourage readers to find out money market fund yields from your brokerages and compare. 

Of course, we all know that profits from clients’ cash represent some big chunk of the overall profit in a brokerage. That’s why brokerages have every incentive to keep money market fund accessibility limited. 

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