Money market funds and sometimes referred to as money market mutual fund are a mutual fund that invests in the short-term debt securities market. Money market funds are seen as secure as bank deposits, but with a higher yield. Money market funds are regulated in the United States under the Investment Company Act of 1940 and the Securities and Exchange Commission (SEC) and have become an important component to provide liquidity to financial intermediaries.
Such funds are designed to minimize losses because of fractures in credit and the financial market and liquidity risks. Funds are able to pay dividends because the goal is to maintain a stable value per share. The securities include commercial paper and US Treasury Bills, short-term bonds and repurchase agreements.
Money market funds are designed for investors who want to invest with minimal risk, but with some level of rate of return. Such funds are the ideal vehicle to achieve those goals. Investors make a dollar back for every dollar invested.
They were designed for investors who were looking to preserve their cash while earning a small rate of return. With the establishment of several other funds, the market grew significantly.
Money market funds were responsible for popularizing mutual funds in general. One of the more important details is that it gave rules and the result is a financial market that is worth more than $3.0 trillion American dollars and serves millions of investors.
Bruce Bent II is an exepert in the financial sector. In fact, his father was the founder of the very first money market fund. This gave Bent II an inside view in to the financial industry. Bent II attended Northeastern University and earned a Bachelor’s Degree in Philosophy. Since then he has made quite a name for himself with his financial techniques and his business skills. He now works for the Double Rock Corporation where he holds the positions of vice chairman and president.
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