What's an MMF? And Applying For Credit Cards

💳 Card Hack of the Week

You want the latest and greatest air miles credit card but your annual salary doesn’t seem to make the cut? Don’t worry about that and just give it a go.

Many people decide not to apply to a credit card because of an annual salary requirement in the fine print. One example of this is the UOB Lady’s Solitaire Card, which technically has an annual income requirement of S$120,000.

However, there have been stories of people making around S$100,000 or less being able to get the card.

The thing is, it’s up to banks to decide whether you’re creditworthy and – while your salary of course makes up a big part of the data on that decision – it’s not the only factor at play.

Whether you pay off your existing credit card bills on time and maintain a solid credit rating can also be a factor on whether banks approve a credit card application.

So, don’t get downbeat about certain limitations on your salary and if you are close to meeting an income requirement, then it’s worth giving it a shot and applying anyway.

🎯 Personal Finance Quick Action

What is a money market fund (MMF)? We see a lot of products out there in the marketplace that advertise “cash management” but is it really cash?

As the Chocolate Finance saga in Singapore demonstrated, a lot of people may be unaware exactly what they’re investing into.

Generally, the term MMF can refer to short-term investment grade (IG) bond funds or savings products (that invest into fixed income).

For the avoidance of confusion, I personally view MMF as something more safe than short-term IG bond funds – which are already very low risk – but slightly more “risky” than something risk-free, like a Singapore T-bill or Singapore Savings Bonds (SSBs).

What would that? It would be something that invests into short-term fixed deposits and the biggest fund out there that does that is the Fullerton SGD Cash Fund. There will likely be similar products to this in each market, say a HKD Cash Fund in Hong Kong.  

In the Singapore case, the Fullerton SGD Cash Fund invests into short-term SGD fixed deposits (FDs) at various financial institutions. They are very short-term in nature and, therefore, reflect the reality of FD yields on the ground.

If you look at the particular of the fund, you can see that over half of the holdings are in FDs that have a maturity of 4 weeks or less, which is ultra short term. The takeaway? A fund like this would be used for short-term cash needs, given its liquidity, but do remember (because of its unit trust structure), it’s not SDIC-insured.

And you do also have to pay Fullerton a 0.15% annual fee for managing the fund for you. The upside? You get liquidity and an easy way to manage your cash that is competitive with short-term FD yields you’d find at any bank.

For a more detailed breakdown, check out my TikTok post on this topic here. And check out how I view cash rates in Singapore here.

📈 Market Money Moves

Shares of Pop Mart International (HKEX: 9992) hit a record high on Thursday as the company behind the viral Labubu doll saw its net profit nearly triple in 2024. 

With its surprise blind box collectibles sparking a dedicated following, Pop Mart shares are now up over 400% in the past year.

Tim’s Take: The Labubu dolls have taken off in a big way and the catalyst for this? The viral moment can be attributed to Blackpink’s Lisa showing off some of these mystical creatures on her bag back in 2024.

Of course, Pop Mart International’s business has crushed it (as the latest results demonstrate) and shareholders haven’t done so bad either. If they’d held shares of the “blind box collectibles” firm over the past year – the stock is up a whopping 413% during that time.  

The big issue for shareholders, longer term, is whether Pop Mart can keep the buzz surrounding Labubu going. As part of the a Nordic-inspired series of characters called “The Monsters”, Labubu has been the standout item with its mischievous-looking smile and sharp teeth.

Surprisingly, Pop Mart isn’t a one-hit wonder The Monsters; the company has three other series of collectibles (Molly, SkullPanda, and CryBaby) that generated over RMB 1 billion (US$138 million) in revenue in 2024.

Indeed, The Monsters made up around 23% of Pop Mart’s overall revenue of RMB13 billion – significant but not exactly dominant. Having said that, The Monsters did see revenue growth of over 720% year-on-year last year, highlighting its growing importance to the company.

For income investors, there was also a nice surprise amidst Pop Mart’s latest earnings – a dividend of RMB 0.2821 per share, up over 300% year-on-year from the dividend paid out for 2023. Despite yielding less than 0.6%, it’s still nice to see growth companies return cash to shareholders.

Can the sizzling growth of Labubu continue though? That’s the bigger question for investors looking to ride on Pop Mart’s extraordinary story so far.

👋 How I Can Help

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