Bought RYPQX
June 10th, 2008 by Grant in: Investing, SavingLast week I started increasing my position in the Reserve Yield Plus Fund (RYPQX: web, prospectus, fact sheet, Y!). Two weeks ago I finally started buying in to the fund, which is a no-load fund and does not impose the typical $9.99 transaction fee from Ameritrade. At the beginning of this month, I received the distribution for those shares, pro-rated for the previous month.
The distribution totaled $0.09 for 250 shares held over 3 trading days in the month of May. Doing the math, this translates into about a 4.4% return on my money annually.
So now that I know how the system works, I’ll continue to put my extra money into the fund to beef up our savings.
I’ll leave the $20,000+ in the Emigrant Direct account, as it’s a bit more liquid than RYPQX. Remember, if you need the money out of RYPQX, it trades like a mutual fund. This means that you’ll have to wait till 4pm for the transaction to take place, plus an additional 3 days for the money to settle in the account. Add to that the transaction time to get the money from the brokerage to your local bank, and you’ll looking at about 7 days before you have your hands on the money.
In comparison, the Emigrant Direct account moves money back and forth in about 2 days.
Tags: Emigrant Direct | RYPQX | savings
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June 15th, 2008 at 6:20 pm
Grant, the yield sure looks very attractive. I too am quite tempted to put money into it. However, what I am not so sure about is whether RYPQX would ‘break the buck’. I know that historically, a money market fund has not broken the buck before (the fund management company would bail out the fund). But this fund is not a MMF and I think it stands a greater chance of breaking the buck.
What are your views on this ‘break-the-buck’ risk on this fund?