A money market fund is a kind of mutual fund which invests only in highly liquid cash and cash equivalent securities that have high credit ratings. Also called a money market mutual fund, these funds invest primarily in debt-based securities which have a short-term maturity of less than 13 months, and offer high liquidity with very low level of risk.
We use money market funds within our separately managed investment accounts to capture dividends and interest for our clients. As a result, any cash is always invested and earning some interest. During times of high investment volatility, we may over allocate to money markets funds within our clients’ accounts to preserve principal.