Money market ETFs vs. active money market solutions: What companies should consider

Money market products have gained significant importance in recent years. While money market ETFs are becoming increasingly popular among private investors, a different picture emerges in the corporate and institutional environment: here, actively managed institutional money market funds have dominated for decades.

The reasons for this lie in higher profitability, better risk management, greater liquidity, and lower operational effort. For a long time, the middle market did not have access to these solutions. This is where UnitPlus Business comes in.

Different target groups, different solutions

Money market ETFs are primarily designed for private investors. Companies and professional treasury departments, on the other hand, rely on money market funds traded directly with the issuer, as used by banks, insurance companies, and large corporations. And there are good reasons for this:

1. Spreads reduce the yield of money market ETFs

When buying and selling ETFs, exchange spreads are incurred; that is, the difference between the bid and ask price. Especially with money market ETFs, these spreads can amount to 0.05% to 0.10% per transaction.

Actively managed money market funds, on the other hand, are traded directly with the issuer, not over the stock exchange. No spreads occur, which increases the effective return.

👉 UnitPlus Business uses exactly this institutional trading route, which is an advantage over ETF solutions.

2. Yield: Actively managed beats passive

The yield of money market ETFs is usually slightly below the ECB deposit rate. In addition, ongoing ETF costs of often 0.10% to 0.20% are incurred.

On the other hand, actively managed money market funds often achieve a return slightly above the ECB deposit rate after costs – through optimized terms, issuer selection, and active management.

👉 With UnitPlus Business, the return after costs is also above the ECB deposit rate.

3. Security through active risk management

Money market ETFs follow a passive approach: they invest in bonds from states and companies and generally hold them until maturity – regardless of market changes.

Active money market funds offer a significant advantage here: fund management can proactively sell issuers before the end of the term if risks become apparent – a particularly important factor in times of crisis. This active management makes institutional money market funds safer and more robust than passive ETF constructions.

👉 For this purpose, UnitPlus Business works with renowned institutional partners such as Goldman Sachs Asset Management and DWS.

4. Significantly lower operational effort

The purchase of money market ETFs in a corporate context is often associated with significant effort:

• Set up a corporate account

• Tax issues such as advance lump sum and capital gains tax

• Ongoing accounting and reconciliation processes

UnitPlus Business is specifically designed so that the entire process – including onboarding, investment, and liquidity management – requires less than one hour per year.

👉 With UnitPlus Business, companies can fully focus on their operational business.

5. Access to institutional economies of scale

Private investors neither have the necessary volume nor direct access to trade institutional money market funds with the issuer – which is why they resort to ETFs.

UnitPlus Business pools the liquidity of numerous corporate clients and invests this aggregated in institutional partners.

This creates scale effects that:

• reduce production costs

• pass cost advantages directly onto companies

6. High liquidity due to large fund volume

Although some money market ETFs have now reached billions in volume, they still remain significantly smaller than large institutional money market funds.

The funds utilized by UnitPlus Business jointly have a volume of approximately 40 billion euros.

The larger the fund volume, the:

• higher the market liquidity

• easier the daily redemption

• more stable the availability – even in times of stress

7. Faster availability of liquidity

Money market ETFs are subject to a settlement cycle of T+2 days.

This means:

• several days until crediting in the company account

• no interest payment during settlement and transfer

With UnitPlus Business, the payout usually occurs after 1 to a maximum of 3 business days – a crucial advantage for operational liquidity management.

Conclusion: Money market funds are clearly superior to money market ETFs

The overall picture is clear:

• No spreads

• Higher return after costs

• Active risk management

• Higher liquidity

• Faster payouts

• Minimal administrative effort

👉 Actively managed money market funds are clearly superior to passive money market ETFs in the corporate context.

With UnitPlus Business, these institutional advantages are now available to the middle market for the first time, easily and digitally. No complexity, but at the level of the most successful treasury departments in the world.