Money market mutual funds (mmmfs), Financial Management

Since the operations in the money market are dominated by institutional players, the retail investor's participation in the market seems to be limited. To overcome this limitation, the Money Market Mutual Funds (MMMFs) provide an avenue to the retail investor to invest in the money market. Retail investors normally deposit short-term surplus funds into a savings bank account, the returns from which are relatively low. The returns from MMMFs will be higher than the interest earned in a bank. Further, this provides adequate liquidity and the investor can plan for short-term deployment of funds. These funds have high safety levels since the investments are in high quality securities, i.e., government/bank/highly rated corporate securities. Thus, MMMFs represent a low-risk and high-return avenue to the retail investor in the money market.

Posted Date: 9/8/2012 5:36:11 AM | Location : United States







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