What are Money Market Funds?
Money Market Funds (MMFs) are defined as a type of fund that offers investors an easily accessible way to manage their cash while preserving their invested capital. These funds primarily invest in risk-term financial instruments that are highly liquid. They are a choice, for individuals, businesses, and institutions who want to strike a balance between safety, liquidity, and earning an income in their investment portfolios. Money Market Funds have the objective of providing investors with a place to keep their extra funds while also ensuring liquidity and generating modest returns.
Key takeaways from Money Market Funds:
- Money Market Funds (MMFs) represent a vital component in the financial landscape, serving as an investment vehicle for individuals, businesses, and institutions seeking a secure and accessible method to manage their cash while preserving their invested capital.
- These funds primarily invest in short-term, highly liquid financial instruments, such as Treasury bills and commercial paper, with the goal of achieving a delicate balance between safety, liquidity, and generating modest returns.
- MMFs act as a haven for surplus funds, providing investors with a reliable and easily accessible platform.
Table of Content
- Features of Money Market Funds
- Types of Money Market Instruments
- How do Money Market Funds work?
- Purpose of Money Market Funds
- Who Should Consider Investing in Money Market Funds?
- Factors to Consider Before Investing in Money Market Funds
- Advantages of Money Market Funds
- Disadvantages of Money Market Funds