Yatırımcı.AI

Money Market Fund

A money market fund is a low-risk fund investing in highly liquid deposits, repos and short-term debt instruments with at most 184 days to maturity. Money market funds, also called liquid funds, are used for cash management and short-term parking.
Contents
  1. 1.Key points
  2. 2.How it works
  3. 3.Interpretation
  4. 4.Pitfalls
  5. 5.Frequently asked questions

Key Points

  • The portfolio’s weighted average maturity cannot exceed 45 days and it is priced daily.
  • Its advantage over deposits is flexibility: you can exit on any day without waiting for maturity.
  • return can lag inflation, so a real loss is possible.

How It Works

the fund settles same day; units bought in the morning trade at that day’s price and sale proceeds are credited the same day. Return accrues daily into the price with very low fluctuation. Yatırımcı.AI lists money market funds with daily and annual returns.

Interpretation

Its return largely tracks the CBRT policy rate and deposit rates.

Its advantage over deposits is flexibility: you can exit on any day without waiting for maturity. Gains are subject to withholding tax when units are sold. In a high-rate environment annual return stays close to the policy rate.

Pitfalls

return can lag inflation, so a real loss is possible. Management fees differ across funds and directly determine net return. Rate cuts lower the return quickly; there is no guaranteed yield.

Pages Where This Term Appears

Related Terms

Frequently Asked Questions

A money market fund is a low-risk fund investing in highly liquid deposits, repos and short-term debt instruments with at most 184 days to maturity.

the fund settles same day; units bought in the morning trade at that day’s price and sale proceeds are credited the same day. Return accrues daily into the price with very low fluctuation. Yatırımcı.AI lists money market funds with daily and annual returns.

Prepared by: Yatırımcı.AI Research TeamLast reviewed: Method: MethodologyEditorial policy