Money Market mutual fund

A money market mutual fund is a kind of mutual fund that invests in ultra-safe or low risk securities. The purpose of the fund is to conserve the capital of the fund and it is unusual to see the NAV of a money market mutual fund go below one. The NAV can go below one if the securities do badly but it is quite rare to happen.

A Money Market Mutual fund is meant for people who wish to maintain their capital and park their short-term cash into a safety that gives - stable but low returns. It is also used by citizens who want to balance their portfolio and build in some security. If you have a lot of stocks in your portfolio then money market funds can balance your overall portfolio by providing capital safety.

Money Market Mutual Funds present - securities of domestic and foreign issuers. They are securities that are naturally - high quality (low risk) short term securities that can have a fixed, floating or changeable interest rate.

A money market mutual fund in india usually invests in the following type of assets:

A money market fund is a mutual fund that invests solely in money market instruments. Money market instruments are forms of debt that mature in less than one year and are very liquid. Treasury bills make up the bulk of the money market instruments. Securities in the money market are relatively risk-free.

Money market funds are generally the safest and most secure of mutual fund investments. The goal of a money-market fund is to preserve principal while yielding a modest return. Money-market mutual fund is akin to a high-yield bank account but is not entirely risk free. When investing in a money-market fund, attention should be paid to the interest rate that is being offered.

See Also: Money Market Instruments

Types of Money Market Mutual Funds

Money market funds are of two types :

Special Features of Money Market Mutual Funds

There are different classes of money market funds based on where they invest their funds. Here is a list of some Money Market Mutual Funds