I decided to put a few USD (in my Rakuten-sec account) into some *low-risk* fund. I bought ノーザン・トラスト・米ドル・リクイディティ・ファンド(楽天・米ドルMMF) (Northern Trust USD Liquidity Fund) a few months ago when it was yielding close to 5%. Now I notice that the investment value is down 12.1% I had been thinking the YIELD would drop when the FED lowered rates, but it seems the PRINCIPAL drops.
So is the lesson here that MMF funds are not low-risk?
Are there any "low-risk" funds in Rakuten?
Thanks for opinions.
by hoseiit
3 comments
The yen went from 160 to 142 to the US dollar. While does have something to do with interest rates, it’s not related to the fund yield.
The yen value of a money market fund that invests in a currency other than JPY will change with the exchange rate between yen and that currency. The USDJPY exchange rate has fallen 11.5% since 3 months ago.
>Are there any “low-risk” funds in Rakuten?
It really depends how you want to measure risk. If you measure risk *in JPY*, then the lowest risk funds will be very different to the lowest risk funds for people who measure risk in some other currency. Unfortunately, failing to measure risk *in JPY* seems to be somewhat common among foreigners living in Japan.
If you measure risk in JPY, there tends to be only two options for people with relatively low risk tolerances: global index funds (low-medium risk) and JPY cash deposits (low risk). I suppose you could include JPY-denominated investment-type insurance products as well, but those tend to be just global index fund-type returns with much, much higher fees and very slightly lower risk.