Have you heard about mutual funds? These are the funds that are managed by professional, full-time money managers. A mutual fund is a collection of money (including your money and others) that is used to purchase a variety of assets. In return, the profits are distributed back to the investors. With its low cost and great gains, investing in mutual funds can be a good start in the world of investments.

There are many types of securities. One of them is the money market. You can be rest assured of its performance as they are monitored by not only one, but multiple investment advisors. They are also known as portfolio managers or fund managers. They also have their assistants to help them stay sharp in making good financial decisions.

Currently, statistics have shown that money market funds make up to 30 percent of the mutual fund assets in the United States of America. They often attract the least risk possible. Of course, by having the least risk, its rate of return are also lower if compared to other investments.

These funds can also go liquid within a short period of time. However, it is not a bank account savings either. Investments do have their fair share of risks. They too, can lose in value over time.

What is money market fund? It is a type of mutual fund. Its main role is to invest in short term debt securities. Why money market fund? Is it safe? This type of fund is regulated and controlled very much by the ‘SEC’ (Securities and Exchange Commission). The value of this money market fund is worth trillions of dollars in between hundreds of such funds. General-purpose money market funds invest in safe, short-term bank certificates of deposit, US Treasuries and corporate commercial paper. These are issued by the most trustworthy companies.

How long have they been around in existence? The answer is sine 1970s. It is extremely safe. If you compare with a bank account, the difference when it comes to risk is zero. There is not much risk at all. Ask any investors that go into these funds and they will all tell you one thing. Their principal value (the original invested amount) is never lost.

This is because money market fund investments can only exist in trustworthy companies. They must have an average maturity of less than 120 days. Even if loss does occur, the mutual fund company that is responsible will almost certainly cover the loss.

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