Money market fund

The term money market fund refers to a type of investment fund that invests in short-term and comparatively safe money market instruments. These instruments include government bonds, corporate bonds, treasury bills and bank certificates.

Money market funds generally offer a high level of liquidity, as investors can buy or sell shares at any time. They are also considered to be relatively low-risk as they invest in high-quality, short-term investments. However, the returns are generally lower than for shares or bonds. The income derives from the interest on the underlying securities.

These funds often have lower management fees compared to other types of funds as they invest in less volatile instruments. They are considered suitable for investors who want to protect their capital while achieving a certain return. They are also suitable as a form of holding while waiting for other opportunities to invest in available funds.