Money market mutual funds are also known as principal stability investments and they are controlled by the Securities and Exchange Commission. They operate in such a way that they limit losses that are as a result of credit, market and liquidity instabilities. They have the highest rated debt in the United States and they come in the form of government securities and purchases agreement, short-term bonds among others.
Money market mutual funds are common with many banks in the United States. The banks normally offer high returns compared to other investment companies. They also provide liquidity and primary preservation which then translates to longer maturity, lower rated bonds and foreign currency denominated debt. Longer preservation means that the risk involved is much lower.
There are many different types of money market mutual funds. They include retail money fund, which are primarily offered to individuals and they hold about 35% of all money market investments. These investments deal with short-term debts, for example the US treasury bills and commercial paper. They are further sub-divided into government-only, non-governmental and tax-free investments. their advantage is that they bring along higher returns than most others.
Institutional money investments is another category which is characterized by high minimum investment and low expenses. They are commonly invested in by government corporations and fiduciaries. The largest institutional money investment companies include JPMorgan, BlackRock, Western Asset, Columbia, Dreyfus, AIM and Evergreen (Wachovia). To make a decision on which one to buy the investments from, you are advised to compare their rates of performance so as to make an informed decision.
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