Mutual Funds Day 28: Money Market Funds
In the last Chapter, we learned about overnight and liquid funds. Money market funds are also fixed income instruments but quite different from normal debt funds. Debt funds and money markets are traded separately wherein the debt markets are open for retail participants whereas the money market is a wholesale marketplace.
Money market funds usually have a maturity period of up to 1 year and invest in the highest credit quality instruments (mostly AAA quality). Since money markets are traded as wholesale entities, the liquidity is very high. If you compare the liquid funds and money market funds, the latter gives you slightly better returns as the AMCs can invest in longer duration instruments — SDLs, government, or corporate bonds.
The factsheet of UTI money market fund is shown below. Notice the following highlighted details:-
- Credit quality = AAA
- Top holdings
- Number of equity holdings = 0, bond holdings = 23
- Weights of investments.
Examples of money market funds:
https://viswaram.com/mutual-funds-day-28-short-medium-and-long-term-bonds-e04dcc06a641
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