Investing is a skill and a talent worth cherishing if one knows how to invest in a way so as no money is lost. The skill bearers are often blessed with an intuitive foresight that enables them to make decisions in their own benefits however, even those who do not possess the same skill need to invest their money in order to take part in their country’s economic growth. Now such people invest in the mutual funds as they provide safety assuring money return too. Amongst all the mutual finds, money market funds are the most preferred ones as till date their has been no investor who has faced a situation of loss by investing in them. Regulated under the investment company act of 1940, a money market fund has relatively lower risks attached to it besides it fetches dividends which generally reflect short term rates. As per the fund news, a majority of people go in for the money market funds as their portfolio combines of a host of features which encompass government securities, certificates of deposits, commercial papers of highly rated companies and other low risk securities in the stock market. Generally their investment is directed towards securities possessing high liquidity. While one aim remains to maintain the Net asset Value (NAV) intact, the money market funds derive yields which constantly go up and down.
Fund investing in India is rather a more or less of gambling though reasonable. And money market funds play a vital role to generate investing opportunities for those who are not ready to gamble with their fortunes as these funds are extremely liquid. No wonder, they are just like a safe-deposit in the bank that can be converted into cash any given point of time. This is what makes them a strong competitor to the banks. Even if we check the daily equity mutual fund news, we would come to know of the most common and safest money market fund, the treasury-only funds. The other type spells government-only funds and then many other types follow like prime funds, first-tier funds and so on