XSTR domiciled in Luxembourg and distributes up to 4 times a year. Have you found the dividends to be exempt from Corporation Tax ?

Thank you Michael, that makes complete sense and points me to the ‘Acc’ as the right fund type for me, much appreciated :)

Hey Dan, it really depends what you plan to do with the income the fund pays.

If you plan to re-invest it, then the Acc fund type will do it automatically for you. It will save you time and transaction fees.

If you choose the Income type, your ISA provider will pay you the cash in the account. You’ll have to do the buying yourself in order to re-invest it. I guess it’s a good feeling to receive the payment in cash, but that’s just a behavioural win :)

Does that make sense?

Thank you Michael, for laypeople such as me, would you mind summarising the pros and cons of paying income to the investor (i.e. Inc) and automatically reinvesting it (i.e. Acc)?

Hey Dan, no real difference between the Inc and Acc funds, other than one pays the income to the investor (Inc) and the other one re-invests it automatically.

SONIA and the Bank of England rate are good benchmarks for MMFs performance. The performance might lag a bit, depending on the duration of the investments they hold.

Also, how is the best way to monitor performance in terms of making a decision to step back out of MMF’s? Is it best to keep an eye on the SONIA rate, as the fund (using the aforementioned Blackrock Cash Fund D) isn’t itself advertised at a particular % return?

IBKR does not do mutual funds well, and many money market funds are of this type, sadly. There are some ETFs that you can consider. Two that track the SONIA rate: CSH2 Lyxor Smart Cash and XSTR by DWS/Deutsche Bank. Also, the above short-term government and corporate bond ETFs: IBTU, JGST, ERNS.

The search works well if you use the tickers (e.g. CSH2) on the mobile app.

Or you can just leave cash on IBKR and tearn interest.: 4.33% USD, 3.3% GBP, above $10,000 or so (as of today April 13th 23′). https://www.interactivebrokers.com/en/accounts/fees/pricing-interest-rates.php

Oh nice, thanks for sharing that Ila! Interactive Brokers is a really decent option. Typically investment platforms don’t offer anything on uninvested cash.

Fantastic article!

You really convinced me that MMT is a good option to consider.

Btw, not sure if you are aware but Interactive Brokers offer good interests on Uninvested Cash Balances
https://www.interactivebrokers.co.uk/en/accounts/fees/pricing-interest-rates.php

Currently up to 3.404% for GBP and 4.070% for USD balances.

Not bad for doing nothing.