Since my asset allocation plan calls for 5-10% exposure to cash, I’ve been investigating the different options available to me. In particular, I investigated money market and T-bill funds offered by the big banks. (For the purposes of this post, I am excluding “premium” funds that require a minimum investment of up to $250,000).

The expenses for these funds average about 1%. In an environment where the Bank of Canada benchmark rate is 2.5%, the expenses of these funds are an outrageous 40% of returns. Exactly what insight and expertise these fund managers are providing beyond buying and selling T-bills is completely beyond me.

Compared to the sorry lot of money market funds offered by the banks, Altamira’s T-Bill Fund is a great alternative. The fund is no-load, its MER averages about 0.39% and requires a minimum of $1000. Unless, there are other cheap money market funds available, the Altamira T-Bill Fund is a no-brainer choice for the cash portion of the portfolio.