Comparing Floating NAV and Stable NAV Money Market Funds
Institutional investors have traditionally utilized 2a-7 money market funds to invest cash in a diversified portfolio that seeks to maintain principal and provide daily liquidity while receiving competitive returns. Floating NAV (Floating Net Asset Value) money market funds now require investors to consider a fund's price movement in addition to income. Floating NAV funds may offer the potential for attractive total returns over stable NAV funds that could compensate investors for the small fluctuations in a fund's price over a short investment horizon. The below interactive calculator helps investors understand how yield and net asset value (NAV) movements in a Floating NAV money market fund vs. stable NAV money market fund could impact total returns. It allows investors to input various yield and NAV movement parameters, including a mixed allocation to both Floating and Stable funds, to determine if the total return potential outweighs the income within a stable NAV fund.
Total Return
| Initial Investment ($) | NAV Movement ($) | Income ($) | Total Return ($) | |
|---|---|---|---|---|
| Stable NAV Investment | {{ initialInvestment().toLocaleString() }} | 0 | {{ stableNavIncome().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} | {{ stableNavInvestment().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} |
| Floating NAV Investment | {{ initialInvestment().toLocaleString() }} | {{ navMovement().toLocaleString() }} | {{ floatingNavIncome().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} | {{ floatingNavInvestment().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} |
| Mixed NAV Investment | {{ initialInvestment().toLocaleString() }} | 0 | {{ mixedNavIncome().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} | {{ mixedNavInvestment().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} |
| Stable NAV Investment | |
| Initial Investment ($) | {{ initialInvestment().toLocaleString() }} |
|---|---|
| NAV Movement ($) | 0 |
| Income ($) | {{ stableNavIncome().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} |
| Total Return ($) | {{ stableNavInvestment().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} |
| Floating NAV Investment | |
| Initial Investment ($) | {{ initialInvestment().toLocaleString() }} |
| NAV Movement ($) | {{ navMovement().toLocaleString() }} |
| Income ($) | {{ floatingNavIncome().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} |
| Total Return ($) | {{ floatingNavInvestment().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} |
| Mixed NAV Investment | |
| Initial Investment ($) | {{ initialInvestment().toLocaleString() }} |
| NAV Movement ($) | 0 |
| Income ($) | {{ mixedNavIncome().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} |
| Total Return ($) | {{ mixedNavInvestment().toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) }} |
| {{ daysFloatingNavToReturnInitialInvestment() }} | Days for a Floating NAV Investment to Return to Initial Investment |
| {{ daysFloatingNavToMatchTotalReturnofStableNav() }} | Days for a Floating NAV Investment to Match the Total Return of a Stable NAV Investment |
| {{ daysFloatingNavStableNavToReturnInitialInvestment() }} | Days for allocation of floating NAV and stable NAV to Return to Initial Investment |
This tool is provided for illustrative purposes only. The output provided is hypothetical and based on the information you have provided and not meant to depict the actual performance of specific investments.
There can be no assurance that the hypothetical investment scenarios shown will be attained.
Investors should consider the investment objectives, risks, charges, and expenses of a money market fund carefully before investing. To obtain a prospectus, or summary prospectus, if available, that contains this and other information about the fund, contact your financial professional or visit dreyfus.com. Read the prospectus carefully before investing. The fund’s prospectus includes important information about its principal investment strategy including, if applicable, how environmental, social and governance (“ESG”) factors may be considered as part of the fund’s securities selection process and the risks related to incorporating ESG considerations in the fund’s investment approach.
Floating NAV
You could lose money by investing in a money market fund. Because the share price of the fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
Stable NAV
You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
This has been provided for informational purposes only and should not be used as the primary basis for any investment decision. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Please consult a legal, tax or financial professional in order to determine whether an investment product or service is appropriate for a particular situation. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. BNY Mellon Investment Adviser, Inc. and BNY Mellon Securities Corporation are subsidiaries of BNY Mellon.
©2022 BNY Mellon Securities Corporation, Distributor, 240 Greenwich Street, 9th Floor, New York, NY 10286.
CIS-238926-2022-01-14
