Money Market Fund
- MMFs invest in short term bills to ensure liquidity.
- It stabilizes its price per share to one unit of currency. If it appreciates, it simply gives you more dividends or more shares.
- MMFs still have managers. But their role is to ensure there are enough maturing bonds for you to cash out.
- Types
- Government MMFs: short-term T-bills and Fed Repos (overnight lending)
- Prime MMFs: lending to companies for a short time.