Webull Moneybull allows you to potentially earn more on your idle cash without missing out on any trading opportunities.
Many investors have been looking for ways to make their spare cash work harder as interest rates have gone up.
In the past week, Webull launched Moneybull as an option for investors to explore outside of T-bills and Singapore Savings Bonds
Let's take a look at the Webull Moneybull to see whether it is a cash management account you should consider.
What is Webull Moneybull?
In case you are not familiar with Webull, it is a low-cost broker which launched in Singapore last year. Read our review here.
Moneyball is a wealth management tool that allows you to earn a yield on your idle cash.
The yield is generated by automatically investing your idle cash into underlying cash funds.
These cash funds are effectively mutual funds that invest in short-term debt securities that are seen to be low-risk.
What does Webull Moneybull invest in?
As of 28th March 2023, the Fullerton USD Cash Fund A generated a 7-day annualised yield of 4.73%.
The Fullerton SGD Cash Fund A generated a slightly lower 7-day annualised yield of 3.82%.
This is not surprising, since the investment objective of the Fullerton SGD Cash Fund A is to “provide investors with liquidity and a return that is comparable to that of the Singapore Dollar Banks Savings Deposits rate”
The USD fund generated a higher yield as the deposit rate in the U.S. has been higher than that in Singapore.
What are the advantages of Webull Moneybull?
#1 – Fund is held as bank deposits
Using the USD fund as an example, it holds US dollar deposits with eligible financial institutions.
Based on the fund’s latest factsheet, these US dollar deposits are held with financial institutions such as Saudi National Bank and Sumitomo Mitsui Trust Bank.
The placement period to maturity of these assets is generally very short term, with 99% of assets maturing within 4 weeks.
#2 – Relatively low cost
Webull does not charge any subscription and redemption fees for Moneybull.
The fee incurred lies mainly in the expense ratio of the funds. For example, the Fullerton USD Cash Fund an expense ratio of 0.12% as of February 2023.
#3 – Greater flexibility
You can continue trading with your Webull account even when your funds are in Moneybull.
You will receive 99% of the market value of your Moneybull position as your Buying Power for your trades.
When you do not have sufficient cash to settle your trades, the funds from your Moneybull position will be auto-redeemed.
What are the risks of Webull Moneybull?
#1 – Not capital guaranteed
While the money is put into US dollar deposits, they are not completely risk free.
Moneybull is not capital guaranteed. This means that there is still a possibility that you might lose your money.
For example, we have recently seen how the collapse of Silicon Valley Bank led to delays faced in the withdrawal of deposits before US regulators stepped in.
It might be worth knowing that deposits into Webull Moneybull is not insured under Singapore Deposit Insurance Corporation Limited (SDIC).
What would Beansprout do?
Webull Moneybull can allow you to earn a potentially higher yield on your idle cash as a money market fund.
If you are looking to take advantage of the feature, sign up with Webull and receive attractive welcome rewards from Webull.
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Set up a Webull account and receive free shares of up to US$5,000
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- Yield per annum*4.41%
*Interest rate calculated based on 7-day annualised return for the Fullerton SGD Cash “A” SGD ACC Fund. All investments carry risks. Past performance does not indicate future performance.
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