Money Market Mutual Funds
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Money Market Mutual Funds
Money market mutual funds invest in the short-term debts of corporations, federal and state governments, and their subsidiaries.
Things To Know
- Money market funds invest in short-term debts.
What money market funds invest in
They bring these investments to the small investor for an initial investment as low as $500 (depending on the fund). Money market funds invest in Treasury bills, commercial paper, banker’s acceptances, negotiable certificates of deposit, repurchase agreements, and short-term debts of US government agencies. A fund’s prospectus lists each investment and how much of it the fund has bought.
The returns on money market funds depend on the yields of their individual holdings. Money market instrument yields can fluctuate greatly. This causes the yields of money funds to fluctuate as well. Investors who hold money market funds can track the funds’ yield changes in the financial pages of most major newspapers.
An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
