BlackRock has collaborated with investment platform Lightyear to introduce three money market funds (MMFs) for individual investors.
The money market funds, available in USD, GBP and EUR denominations, will feature “transparent and low” pricing.
Lightyear, a fintech startup in the UK that offers commission-free trading on US and European stocks, has established a fee structure ranging from 0.09% to a maximum of 0.3% with easy entry requirements.
The primary objective of these funds is to maintain a net asset value of one US dollar/euro/sterling pound per share. Any additional earnings resulting from interest on the portfolio holdings will be distributed to investors as dividends.
The investments will primarily cover highly liquid, short-term debt instruments and will be directly traded and priced daily through BlackRock. Customers will receive daily returns credited to their Lightyear accounts on the first day of each month.
The development allows retail investors in the UK to leverage higher global interest rates, offering a 4.5% interest on uninvested GBP, said BlackRock. BlackRock’s GBP MMF currently yields 5.14% annually.
Historically, such products have been complex for UK investors to access, usually limited to high-net-worth individuals willing to invest a minimum of £1 million.
Lightyear expanded its operations into Europe last year, raising $25 million in funding. This round of funding included prominent backers like the Virgin Group, owned by British billionaire Richard Branson.
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