Money Market Funds

5 Best Charles Schwab Money Market Funds

February 20, 2024 —

Running Point and I were cited yesterday by U.S. News & World Report in an article — by reporter Tony Dong, MSc, CETF®, “5 Best Charles Schwab Money Market Funds” — regarding efficient and effective money market funds on the Charles Schwab platform.

Quoted article excerpts are below:
“Ask whether you’re seeking to maximize yield from your money market fund and therefore are comfortable with it investing in more exotic short-term asset-backed securities and commercial paper, or want to focus on a ‘risk-off’ style safety with a concentration on U.S. government-backed securities,” says Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.

“Consider what is inside your money market fund — i.e., what the money market invests in,” Schulman says. “For example, Treasury bill income is not subject to state income tax, whereas some of the higher yielding money market accounts that invest in short-term corporate securities will be, which can make a noticeable after-tax income difference for people in high tax states like hashtag#California or hashtag#NewYork.”

“If paying taxes is the main concern, then you may want a municipal money market fund where the majority of income won’t be subject to federal income taxes,” Schulman says. The Schwab fund to pick for this role is SWTXX, which like the previous options also charges a 0.34% expense ratio, but otherwise differs in notable ways when it comes to tax efficiency.

#investing #moneymarket #schwablife #taxes #income
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