How to Find Capital Gains on FDLXX Investment?
Main Problem:
- The user, 93Bones, is uncertain about how to track gains or losses from shares purchased in a money market fund (FDLXX) and suspects that the purchase may not have been completed properly, as their cash balance has not decreased.
Provided Solutions:
- eli. explains that FDLXX is a money market fund that maintains a stable value of $1.00 per share, meaning there are no capital gains, but it will accrue interest paid out at the end of the month.
- FidelityEmilio clarifies that cash deposited in the Fidelity account is automatically allocated to a core position, which earns daily interest credited monthly. He provides a link to a video explaining how the core position works.
- FidelityEmilio also mentions that interest rates for money market funds are updated weekly and provides details about the 7-Day Yield, which indicates the average return over the previous week.
The information helped 93Bones understand how to monitor interest earnings from their investment.
Here’s the full thread
I have a position in FDLXX. I bought these shares in 3/11/2024 and it shows I indeed own and shows a value of my owned shares. At what point will I know how much I’m gaining or making a loss to reflect on my account since it has been almost two weeks. Is it something I have to wait or did I not purchase correctly? My account has been made this month and my cash has not gone down after purchasing those shares which makes me believe I didn’t actually buy those shares. Any help would be appreciated!
thats a money market fund which stays at $1.00/share, so there is no capital gains but will accrue interest and be paid out end of month
Oh okay so basically sit back and let it accrue. How or where will I know how much I’ve made in interest?
Hey @93Bones, I’m happy to chime in here and add to eli’s answer. Money deposited into your Fidelity account will automatically be allocated to the core position. The core position is where un-invested cash sits while it awaits investment or withdrawal. There are two categories for core positions: a money market mutual fund or an FDIC-Insured Deposit Sweep core. As a result, the core position accrues interest daily, which is credited to the account at the end of the month. Learn more about how the core works by watching the video below:
What is a core position?: https://www.fidelity.com/learning-center/investment-products/mutual-funds/core-position-video
Interest rates for money market mutual funds are updated weekly and are referred to as the 7-Day Yield. The 7-Day Yield is the average income return over the previous seven days, assuming the rate stays the same for one year. It is the Fund’s total income net of expenses, divided by the total number of outstanding shares, and includes any applicable waiver or reimbursement.
Let us know if you have any other questions, we’re happy to help. 🟢
I see. Thank you both for the help. This answered my question and any side questions I had as well
Hey, @93Bones. You’re very welcome!
On behalf of @FidelityEmilio, we are glad we could help.
Drop by anytime you need our assistance. That’s what we’re here for! 🟢