Q: Hi team, I am a 65 year old dividend investor. I presently hold about 12% of my portfolio in Money Market Fund ZMMK while waiting to see what to buy next. I am wondering how this fund would react during a major market sell off. I know it is fairly safe but the fund has a short history. In your opinion how safe is ZMMK and during a sell off would funds gravitate towards it or would it sell off with the rest of the equity market? Thanks.
5i Research Answer:
In a market downturn/sell off, ZMMK should be relatively insulated. Investors may rotate out of higher risk investments into low risk options such as ZMMK. ZMMK should not be affected by a market downturn. The fund is very low risk only owning money market instruments. Securities are short term and very liquid. The fund has a 52-week high/low trading range of only $0.25 on a $50.07 unit price. We would consider it extremely safe and not likely to be correlated with the equity market in any way, but still without an explicit guarantee.