Lightyear partners with BlackRock to bring high yield money market funds to retail investors in the UK

Today, investment platform Lightyear announces a major product update with the launch of Money Market Funds (MMFs), in collaboration with BlackRock, the world’s largest investment company (by assets-under-management).¹

Launching MMFs is a step change for the investment platform, which in addition to 4.5% interest on uninvested GBP, now has a strong product for UK retail investors to make the most of global high interest rates. BlackRock’s GBP Money Market Fund currently returns 5.14% p.a (gross yield, subject to daily fluctuations and fees).

For UK investors, Money Market Funds have traditionally been difficult to access, with options in the market reserved for high net worth investors who can buy in with a £1 million minimum investment.² On top of the high entry barrier, asset managers often charge sky-high fees for these instruments.

Together with BlackRock, Lightyear is launching three distributing Money Market Funds, denominated in USD, GBP and EUR. Like other assets in Lightyear, MMFs come with low, transparent pricing – Lightyear fees start at 0.09% and go to a maximum of 0.3% – and no high barrier to entry. The funds aim to maintain a net asset value of $/€/£ 1 per share. Any excess earnings that are generated through interest on the portfolio holdings are distributed to investors in the form of dividend payments. Customers will be acquiring a return daily, paid out to their Lightyear account on the first of every month.

Money Market Funds invest in highly liquid, short-term debt instruments and are required to maintain a high level of liquidity. Compared to exchange traded funds (ETFs), Money Market Funds aren’t traded actively on the stock exchange throughout the day, but instead once a day. MMFs are mutual funds, meaning they trade and are priced daily directly with BlackRock.

Taavet Hinrikus, co-founder of Wise and Lightyear user, adds: “Lightyear is giving retail investors across major European countries access to a low risk, high yield product that’s previously been something only those with $1 million or more can get their hands on. The word ‘democratisation’ is thrown around a lot – but in this situation, the team at Lightyear have built the technology and the partnerships to bring something amazing to the mass market of investors at a low cost.”

Martin Sokk, Lightyear’s co-founder and CEO says: “When we think about the next product to bring to the market, we consider a lot of things. But this one was a no-brainer: a low cost way for our customers to diversify their portfolio and earn a steady, high yield. The problem was that everyone else requires an extremely high minimum investment, or they force customers to lock away their funds for set periods of time. We wanted to build something low cost where you have easy access to your money and the added bonus that it’s being held in an institution as trusted as BlackRock. We’re proud to get this product out there, and we’ll be working on making it available in all our countries next.”

New business accounts mean freelancers can invest and earn interest on company money

As well as launching BlackRock MMFs today, Lightyear is also announcing its new business accounts. With another interest rate hike on the horizon, these will help freelancers and sole director companies make the most of their company funds, ensuring that excess corporate cash isn’t eaten up by inflation while sitting in bank current accounts, but rather can earn interest or be invested.

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