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Simple English definitions for legal terms
money-market fund
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A quick definition of money-market fund:
A money-market fund is a type of mutual fund that invests in low-risk government securities and short-term notes. It is a way for people to invest their money and earn a small return without taking on too much risk. Unlike other mutual funds, money-market funds aim to maintain a stable net asset value of $1 per share. This means that investors can buy and sell shares at any time without worrying about fluctuations in the fund's value. Money-market funds are a good option for people who want to keep their money safe and easily accessible.
A more thorough explanation:
A money-market fund is a type of mutual fund that invests in low-risk government securities and short-term notes. It is a way for investors to earn a small return on their money while keeping it safe. Money-market funds are considered to be very safe investments because they invest in short-term debt securities that are issued by the government or by corporations with high credit ratings.
- Vanguard Prime Money Market Fund
- Fidelity Government Money Market Fund
- Schwab Value Advantage Money Fund
These examples illustrate the definition of a money-market fund because they are all mutual funds that invest in low-risk government securities and short-term notes. They are designed to provide investors with a safe place to park their money while earning a small return. Money-market funds are a good option for investors who want to keep their money safe and liquid, but still earn a small return.