Money Read Time: 2 min

Understanding Money Market Funds

A money market fund, not to be confused with a money market account, is a type of mutual fund that invests in instruments like cash equivalents and short-term debt-based securities, which can also include U.S. Treasury Bonds.1

Safety First
These funds are designed to be easily accessible and are often considered cash equivalents. Their primary role in a portfolio is to preserve capital while maintaining liquidity. Financial professionals use them as a place to hold cash for an investor or as a place to "park cash" temporarily while they evaluate new investments. In fact, the core value of money market funds lies in their stability and liquidity, making them one place where investors can build an emergency fund.2

Asset Value
Money held in money market funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Money market funds seek to preserve the value of your investment at $1.00 a share. However, it is possible to lose money by investing in a money market fund.

Money market mutual funds are sold by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.

Preserving Capital
Money market funds can play a role in an investor's portfolio by providing a high-liquidity, low-risk investment choice that is designed to preserve capital. They can play a central role in managing an investment portfolio.2

1. Medicare.gov, 2023
2. Medicare.gov, 2023

Have A Question About This Topic?

Thank you! Oops!

Related Content

The Three Keys to a Great Password

The Three Keys to a Great Password

Have fun and learn how to craft the perfect password with the help of this highly engaging infographic.

4 Steps to Protecting a Child with Disabilities

4 Steps to Protecting a Child with Disabilities

Planning for a child with special needs can be complicated, confusing, and even overwhelming.

A Penny Saved is Two Pennies Earned

A Penny Saved is Two Pennies Earned

Here are some simple and inexpensive energy-saving tips that may help you save money.