Thursday, November 10, 2022

Spaxx Fidelity Government Money Market Fund

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Purchase And Sale Of Shares

Money Market Funds: What You Need to Know

You may buy or sell shares through a Fidelity brokerage or mutual fund account, through a retirement account, or through an investment professional. You may buy or sell shares in various ways:

Internet

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The price to buy one share is its net asset value per share . Shares will be bought at the NAV next calculated after your investment is received in proper form.

The price to sell one share is its NAV. Shares will be sold at the NAV next calculated after an order is received in proper form.

The fund is open for business each day the New York Stock Exchange is open. Even if the NYSE is closed, the fund will be open for business on those days on which the Federal Reserve Bank of New York is open, the primary trading markets for the fund’s portfolio instruments are open, and the fund’s management believes there is an adequate market to meet purchase and redemption requests.

Initial Purchase Minimum

$100,000

For Fidelity Traditional IRA, Roth IRA, Rollover IRA, Simplified Employee-Pension IRA, Keogh, and Investment Only Retirement accounts

$10,000

The fund may waive or lower purchase minimums in other circumstances.

Choosing Between Sprxx And Spaxx

When choosing between SPRXX and SPAXX , you may have to consider some factors, which include:

  • Tax efficiency: Here, the governments money market fund becomes the pick. Investing in SPAXX may offer you full or partial exemption or tax-deferred tax. However, that means that you may have to intentionally choose your state of residence or a favorable marginal tax bracket.
  • Fund features: Both funds are similar in cost , with an expense ratio of 0.42% and management fees of 0.25%.

SPRXX and SPAXX also do not have 12b1, front-end or back-end sales fees, and minimum investments. As a result, both funds are low-cost funds, one of the selling points of mutual funds.

Regarding performance, SPAXX has a lower 5-year return than SPRXX .

For holdings, SPAXX offers better diversification with 299 holdings majorly spread across U.S. Treasury and repurchase agreements.

Both SPRXX and SPAXX pay as low as 0.01% in dividends.

This means that dividends might not be the best factor to consider when deciding between the two funds.

Which Mutual Fund Is Better

From the SPRXX vs SPAXX analysis, the two funds are identical in many ways. However, the most significant difference between SPRXX and SPAXX is where they invest their assets.

SPAXX is a popular choice for many retail and institutional investors.

Historically it offers better interest rates and yet remains very liquid and safe. As a result, the possibility of losing value is low, and you can get your money anytime.

Also, the Fidelity government money market fund is a taxable money market fund, meaning you can take advantage of the taxable income tax bearing option .

FCASH is a free credit balance that is payable to you when you place a request to Fidelity.

If you invest in SPAXX as a core position in a brokerage when interest rises in the future, you will most likely make higher returns.

All these, however, do not rule out the possibility of losses, but SPAXX is an excellent short-term investment vehicle and is apt to keep the money for liquidity.

Eventually, youll have to decide whether to go for SPRXX or SPAXX, but SPAXX might be a better option based on all the above-enumerated points.

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Vanguard Federal Money Market Fund

Vanguard launched the Vanguard Federal Money Market Fund in 1981. Total AUM as of May 2021 is $193.8 billion. This fund has the same investment aims of providing capital preservation and current income through investing in high-quality, short-term U.S. government securities.

Vanguard bills this fund as one of the most conservative offerings in this category, making it an ideal choice for conservative seeking risk avoidance and capital preservation.

As of May 2021, the funds top allocation was to U.S. Treasury Bills at 75.4%, followed by U.S. Government Obligations at 23.6% and Repurchase Agreements at 1.0%. The average maturity of the portfolio holdings was 55 days. The expense ratio for the Vanguard Federal Money Market Fund is 0.11% the dividend yield is 0.02%, and the one-year total return is 0.45%.

What Is The Fidelity Core Position

SPAXX

Usually, your Core Position is how you hold the uninvested cash in your account. So, for instance, if you have $1,000 in your account, not invested into anything, the money goes into any investment vehicle you choose as your core position.

Fidelitys core position, then, is where the uninvested cash in your Fidelity account goes.

Once you open a Fidelity account, Fidelity automatically provides a core position to hold uninvested money and process your transactions.

Fidelitys core position makes it possible to earn interest on your idle cash, just like a savings account.

A core position acts as a wallet when you make a transaction, money in your wallet is used to process the transaction.

In the same way, when you sell something, the proceeds go into your wallet.

When you buy a security, cash in your core position is used to pay for the trade, and when you sell a security, the profit goes into your core position.

In addition, you can use it to process electronic funds transfers, wire transfers, direct deposits, and other payments available on the platform.

Fidelity gives you a few different options to hold your cash. These include SPAXX, FDIC, FDRXX, and FZFXX.

Category: U.S. Govt Money MktPortfolio Style: U.S. Govt Money MktFund Inception: February 5, 1990Expense Ratio: 0.06%

The fund invests in U.S. government securities issued by entities chartered or sponsored by Congress but whose securities are neither issued nor guaranteed by the U.S. Treasury.

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Spaxx Fidelity Government Money Market Fund

As the name suggests, SPAXX is whats called a money market fund. This is a fund that holds ultra-short-term instruments that are considered cash equivalents such as CDs, commercial paper, and repo agreements in order to pay what is usually a tiny interest rate. This type of fund usually pays a marginally higher interest rate than that of a plain ol savings account at a bank. The tradeoff, of course, is that a money market fund is not insured.

SPAXX is specifically collateralized by government securities, and would thus be considered safer than a broader money market fund that includes corporate debt. If we look at the holdings of SPAXX, its mostly U.S. government repurchase agreements, followed by U.S. Treasury Bills and U.S. Treasury Coupons.

We would expect a fund like this to have volatility no greater than about 3% in either direction. At the time of writing, with interest rates so low, SPAXX has a yield of 0.01% and a net expense ratio of 0.06%. Its lifetime historical average annualized pre-tax return has been about 2.5%.

Sprxx Vs Spaxx: Picking The Right Core Position

  • Reading time:8 mins read

Fidelity money market funds like SPRXX vs SPAXX are essential investment vehicles as they enable investors to make short-term investments and move the returns into long-term investments.

Money market funds are a perfect way to park cash for long-term investments and are relatively safe accounts.

The key difference between these two funds is that SPRXX is a Fidelity prime money market fund, whereas SPAXX is a Fidelity government market fund.

In essence, while SPRXX invests in any eligible money market investment denominated in U. S. dollars, SPAXX invests majorly in debt issued by the U. S. Treasury and U. S. Government-sponsored entities.

Lets take a detailed look into the two funds to understand the implications of their differences.

Portfolio Style: Prime Money MarketFund Inception: February 5, 1990Expense Ratio: 0.42%

Fidelity Prime Money Market Fund is popular among the Fidelity prime money market funds.

The fund seeks a high level of current income, consistent with the preservation of capital and liquidity, by investing in U.S. dollar-denominated money market securities, repurchase agreements, and possibly reverse repurchase agreements. The fund intends to invest at least 25% of its assets in the financial services sector.

SPRXX has a heavy weighting towards the financial services industry, and it invests over 25% of its total assets in the financial services industry.

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Money Market Fund Vs Savings Account

If this sounds similar to a high-yield savings account or a money market account, it is. The biggest difference is that yields on money market mutual funds respond much more rapidly to changes in market interest rates. As interest rates rise, the APYs on most money market accounts and savings accounts lag the market significantly while money market fund yields respond immediately.

This can make money market funds a great choice for earning a return on your cash. Thats particularly true when you know you have an upcoming big-ticket purchase and you need quick access to cash.

Lets say youve saved up a down payment for your first home, for example, and youre searching for the perfect property. Putting that money into stock investments would be too risky since you want to buy the house soon and market volatility could eat up some of your investment. But the balance is large enough that you dont want to miss out on earning interest by holding it in your checking account. In that case, a money market fund would offer you the liquidity and stability you want with the potential for a modest return.

Fidelity Government Money Market Fund

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Fidelity launched the Fidelity Government Money Market Fund in 1990, and boasts $219.95 billion in total assets as of May 2021, making it one of the most widely held funds in this category. Similar to the American Century Capital Preservation Fund, SPAXX strives to usher in high-yield returns, with high liquidity, and an emphasis on capital preservation.

The fund is typically 99.5% or more invested in cash or cash equivalents in the form of short-term U.S. government securities or repurchase agreements that are fully collateralized by cash or such securities. Some U.S. government securities are issued by duly authorized government agencies but are not directly issued nor guaranteed by the U.S. Treasury.

In selecting the funds investments, the funds management team focuses on maintaining a stable $1 net asset value share price. The weighted average maturity of the portfolio holdings is 54 days.

As of May 2021, the funds top holdings included the following:

  • U.S. Treasury Bills
  • Agency Fixed-Rate Securities
  • U.S. Treasury Coupons

The fund has an annual expense ratio of 0.42% and a dividend yield of 0.01%. Its one-year total return is 0.00%. This fund is well suited for investors who prefer its broad range of investments.

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What Is A Money Market Fund

A money market mutual fundoften referred to as a money market fundis a low-risk investment vehicle that provides both a modest return on your money and a high degree of liquidity. That means you can easily and quickly move cash in and out of a money market fund without fees or penalties.

Money market mutual funds were first developed in the 1970s before bank money market accounts came on the scene, as an alternative to low-yielding savings accounts. As its name suggests, a money market fund is a type of mutual fund, which invests its shareholders money in short-term, high-quality debt. This makes a money market fund much less risky than mutual funds that buy stocks or even longer-term bonds.

Money market funds can be categorized into three groups: prime, government and tax-free.

  • Prime money market funds are typically invested in short-term corporate and bank debt securities.
  • Government money market funds invest at least 99.5% of their funds in government-backed securities, making them extremely safe investments.
  • Tax-free money market funds are invested primarily in municipal bonds or debt issued by other entities whose interest payments are exempt from federal income taxes.

Spaxx Vs Fdic: Picking The Right Fidelity Core Position

  • Reading time:11 mins read

We Compare SPAXX vs FDIC:

In the world of investment, idle money is almost a crime you shouldnt have any cash sitting around. Fidelity has made it easy to have your uninvested cash put into something until youre ready to buy stocks, bonds, etc., and thats your Fidelity core position.

Put another way your Fidelity core position is where your idle cash goes.

Fidelity provides you with several options for your core position thats where SPAXX and FDIC come in.

But, of course, a savvy Fidelity investor will want to consider all available options and find out their pros and cons to optimize their investment, and thats okay.

Heres the difference between the two Fidelity core positions in a nutshell.

SPAXX offers you better interests, while FDIC provides you better safety for your money.

This SPAXX vs FDIC analysis makes your choice process less difficult by extensively assessing the two.

  • SPAXX vs FDIC Winner
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    Money Market Funds With Low Costs And High Returns

    We noticed a few patterns when comparing the best money market mutual funds on our list.

    First, when it comes to expense ratios, many of the funds with the highest fees also require very significant minimum deposits. The one exception: Fidelity Money Market Fund , which is the only one on this listing with no minimum deposit requirement.

    The reality of the current low-rate environment is that money market fund yields are minimal. When it comes to the funds on our list, few offer a seven-day yield that much above zeroall but one yield less than 0.10%.

    Theres just one money market fund that stands out in terms of cost, yield and minimum investment: Invesco Premier Portfolio Fund . If you can meet the $1,000 minimum investment size, IMRXX offers a combination of relatively high returns with low expenses.

    What Do The Different Account Values Mean

    SPAXX
    Balance

    Total account value

    Total account value The total market value of all positions in the account, including core, minus any outstanding debit balances and any amount required to cover short options positions that are in-the-money Real-time
    Cash Account settlement position for trade activity and money movement. Executed buy orders and cash withdrawals will reduce the core, and executed sell orders and cash deposits will increase the core. Overnight
    Cash credit/cash debit A cash credit is an amount that will be credited to the core at trade settlement. A cash debit is an amount that will be debited to the core at trade settlement. Intraday
    Held in cash The total market value of all long cash account positions. This figure is reduced by the value of any in-the-money covered options and does not include cash in the core position. Real-time

    Cash available to withdraw

    Cash available to withdraw Amount collected and available for immediate withdrawal. This balance includes both core and other Fidelity money market funds held in the account. This balance does not include deposits that have not cleared. Sell orders are reflected in this balance on settlement date and buy orders are reflected on trade date. Intraday
    Cash Account settlement position for trade activity and money movement. Executed buy orders and cash withdrawals will reduce the core, and executed sell orders and cash deposits will increase the core. Overnight

    Options balances

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    Fzfxx Fidelity Treasury Money Market Fund

    You may encounter FZFXX as an option in your taxable account. Its basically the same as SPAXX and FDRXX except it does not have the 10% or so in agency securities. This one is entirely U.S. Treasury securities. In that sense, it is slightly more tax-efficient and thus may appear as a choice for your taxable brokerage account with Fidelity. However, while its yield is the same as SPAXX, its net expense ratio is still a bit higher at 0.08%, so Id still go with SPAXX over FZFXX

    Their Holdings May Include Debt Issued By The Likes Of Bear Stearns Freddie Mac And Some Other Less

    In stressful times, you may hear advisers and strategists recommend that investors raise their allocations to cash. There are two reasons for doing so. First, cash, which is presumably risk free, protects your portfolio from losses. Second, raising cash builds reserves you can use to buy stocks, junk bonds or other assets at lower prices once the backdrop brightens.

    But just what is cash? And is it as safe as it appears to be?

    In finance, cash is more than the green paper you carry in your wallet. The financial worlds definition of cash sometimes its referred to as cash equivalents is any investment with a fixed value that is easy to buy and sell.

    This includes Lincolns and Hamiltons as well as savings and checking deposits and shares of money-market mutual funds. Short-term certificates of deposit and U.S. Treasury bills also count. The bedrock assumption is that if you invest $1 in any of these forms, your investment is worth $1 anytime, no questions asked.

    But financial engineers have also invented all sorts of other cash equivalents. These are short-term interest-earning investments that are designed to maintain a stable value thats behind the comparison to cash but that are not necessarily liquid and not guaranteed by the government.

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    Are All Of Fidelitys Products And Services Available To Customers Residing Outside Of The United States

    No, our product and service offerings for customers and prospective customers who reside outside of the United States are limited. While the questions below provide a general overview of those limits, because so much is dependent on the particulars of your specific situation, we suggest you call us at 800-343-3548 to learn about how they apply to you. If you are calling us from outside the United States, please visit Fidelity Phone Numbers, For Customers Traveling Abroad to see a list of available international phone numbers available.

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