Money Market Funds
A money market fund is a type of mutual fund that invests in short-term, high-quality debt securities. These funds are designed to offer investors a safe place to invest in easily accessible, cash-equivalent assets.
Additionally, a money market fund is a low-risk investment that aims to preserve capital and provide modest income by investing in instruments such as Treasury bills, certificates of deposit, and commercial paper.
Key Features of Funds
Low Risk
Considered one of the safest investment options.
Liquidity
Funds can usually be withdrawn quickly, similar to a savings account.
Stable Net Asset Value (NAV)
Typically aims to maintain a NAV of £1 or $1 per share.
Modest Returns
Offers lower returns compared to stocks or bond funds, but higher than a regular savings account.
Types of Bond Funds
Government Money Market Funds – Invest in government securities.
Prime Money Market Funds – Invest in corporate debt and other instruments.
Municipal Money Market Funds – Invest in tax-exempt municipal securities.
