Money market funds (MMFs) are a type of mutual fund that invests in short-term, highly liquid, and low-risk financial instruments.
These funds aim to provide investors with a safe place to invest easily accessible cash-equivalent assets while offering a modest return in the form of interest income. They are ideal for preserving capital and providing liquidity.
Key Features of Money Market Funds.
1. Short-Term Investments.
Investment Horizon: MMFs invest in instruments that typically have maturities of less than one year, such as Treasury bills, commercial papers, and certificates of deposit.
Liquidity: Due to their short-term nature, these investments are highly liquid, allowing investors to access their funds quickly when needed.
2. Low Risk.
