BlackRock partners with Richard Branson-backed platform to launch money market funds

investmentweek.co.uk:

The funds aim to maintain a net asset value of $/€/£ 1 per share while any excess earnings generated through interest on the portfolio holdings will be distributed to investors via dividends.

The three distributing money market funds, denominated in USD, GBP and EUR will come with low, transparent pricing. Lightyear fees start at 0.09% and go to a maximum of 0.3% — with no high barrier to entry. 

The funds aim to maintain a net asset value of $/€/£ 1 per share, while any excess earnings generated through interest on the portfolio holdings will be distributed to investors via dividends.

Meanwhile, investments will include highly liquid, short-term debt instruments. They will trade and are priced daily directly with BlackRock. Customers will receive a daily return, paid into their Lightyear account on the first of every month.

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This development allows UK retail investors to make the most of global high interest rates with 4.5% interest on uninvested GBP. BlackRock's GBP MMF currently returns 5.14% per year (gross yield and subject to daily fluctuations and fees). 

For UK investors, such products have traditionally been difficult to access, with options usually only available for high-net-worth investors who can buy in with a £1m minimum investment. 

Martin Sokk, Lightyear co-founder and CEO, said: «When we think about the next product to bring to the market, we consider a lot of things. But this one was a no-brainer: a low-cost way for our customers to diversify their portfolio and earn a steady, high yield. 

»The problem was that everyone else requires an extremely high minimum investment, or they force customers to lock away their funds for set periods of time. 

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