I choose "guaranteed" supernormal profit over risk while waiting for the dust to settle
TLDR: Getting up to 20% annual returns on low risk instruments by using Moo Moo fund coupon with $Fullerton SGD Cash Fund(SG9999005961.MF$. That is better return than $S&P 500 Index(.SPX.US$, $Dow Jones Industrial Average(.DJI.US$, $Nasdaq Composite Index(.IXIC.US$ and $FTSE Singapore Straits Time Index(.STI.SG$.
Story time
In this volatile time, where we are experiencing numerous black swan events and there are so much more uncertainties ahead, investors prefers to take less risk. In this current market, the risk reward equation is going haywire. Even investment grade bonds are not safe as when interest rate rises people demand higher returns on bonds which causes the bond price to fall.
Take for example, $Astrea VI3%B310318#(6AZB.SG$ bond that is backed by $Temasek Holdings(BK2536.US$. This bond is investment grade yet it is trading at a discount because no one wants a 3% return anymore. Every investor is expecting higher yield such as >4% that can be gotten from $Astrea7A1 4.125%320527#(V7AB.SG$bond.
It is very difficult to find low risk investment that provides high rewards. But in $Futu Holdings Ltd(FUTU.US$ Moo Moo there is a little golden nugget that gives a "low risk, high reward". That is using Moo Moo's 10 to 20% fund coupon and using it on $Fullerton SGD Cash Fund(SG9999005961.MF$. This combination give you a supernormal yield on a investment grade money market fund.
$Fullerton SGD Cash Fund(SG9999005961.MF$ never had a negative return since its inception in 2009, and it does looks like a safe fund that gives us tiny returns. However, if we use Moo Moo's fund coupon on it, we will get "supernormal" yield of 10%, 15% and even 20% for a few days. Do note that the 10% yield is an annual yield, not daily yield. So unless you have enough coupons to keep using for 365 days, otherwise the yield is pro-rated into daily yield. However, having the opportunity of getting such high yield, even though it is only for a few days, is still amazing.
So once the fund coupon is used up, I just withdraw all my money from the fund, and then put it in again to use the next coupon, to continue getting the high yield.
Sadly, I only found out of this "hack" on 29 Aug 2022, because of that I had wasted the opportunity to use17 fund coupons which had expired ![]()
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. So right now I'm on my 5th fund coupon and still got 3 more coupons left to milk this supernormal profit in such uncertain times ![]()
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. I had gotten $25.07 in coupon reward, and $10.08 in funds capital gain in less than a month. Given that the median capital I put in to milk the coupon is about $5000, that is close to 1% return in a month.
That is some amazing returns while I'm saving up more capital to buy the dip when the time is right. So currently I only have 3 coupons left to use that will allow this supernormal yield to continue for another 8 days, so hope that Moo Moo will be giving more coupons so that I can continue this profitable strategy known as "milking Moo Moo coupon". ![]()
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sociable Dingo_8604 : Eye opener. Good read. But if you withdraw or redeem from the fund and then subscribe in again using coupon, wouldn’t it lessen your daily yield from cashplus? Wondering if this method works out..
doctorpot1OP sociable Dingo_8604: I just checked and it seems like there is no gap in the yield for withdrawing and resubscribing. so I'm getting both coupon yield and fund yield all the time
doctorpot1OP doctorpot1OP: Those days without any returns are Saturdays and Sundays.
sociable Dingo_8604 doctorpot1OP: Interesting, this method will ensure you get the coupon yield and yet no additional cash needed. Do I have to ensure my existing coupon duration end first before I attempt redemption?
doctorpot1OP sociable Dingo_8604: I usually wait for this line to disappear before redeeming and resubscribing again using another coupon. I try my best to maximise the coupon as there are max amount the yield can be applied to. Usually 5k is the max but some can go as high as 20k
Shuseido doctorpot1OP: Great sharing as always.
I think the Sat & Sun also got returns but add onto Tues. Coz I noticed Tues return is about 3x of other days.
doctorpot1OP Shuseido: Great observation
might be might be, I'll monitor for a while and update again hehehe 
Shuseido : Really love the fund coupons.. boost up the returns much higher.. Great motivation to keep investing in cash management.. keep it coming Moomoo! @moomoo SG