A money market fund is a type of mutual fund focused on short-term securities. It consists of short-term debt that is arranged through mutual funds, broker-dealers, and investment banks. A money market fund earns interest for the investor while maintaining a minimum base value called the net asset value. It is considered an excellent alternative for those looking for low-cost, low-risk and high-yield investment opportunities.
Some of the securities in a money market fund include treasury bills, bonds, certificates of deposit and corporate commercial paper among others. A money market fund is highly liquid and can be easily traded. It is also referred to as “cash-equivalent” because the portfolio quickly converts to cash. A money market fund usually attracts a high demand and can be traded quicker upon request than regular stocks.
It does not attract entry or exit fees for investors. It is considered to be safe since it offers higher yields and is not affected by volatility in the stock markets. Money market funds provide an excellent option for people who wish to park huge sums of money for short periods of time while earning a reasonable rate of return. Bruce Bent II is credited with establishing the first money market fund in 1971.
Since then, they have become popular alternative investment options and increased the uptake of regular mutual funds. The segment has grown to a multi-trillion dollar industry with a permanent spot on trading floors globally. Bruce Bent II is currently working as the Vice Chairman and President of Double Rock Corporation, an investment management and financial technology solutions company serving brokerages, investment banks, institutional investors and retail markets among others. He is providing capital strategy advisory and operational management at the group.
Some of the group’s subsidiaries and affiliates include Access Control Advantage, a loan outsourcing solutions firm and LIDS Capital, an insured deposit provider to brokerages and clearing agencies. The group also operates Island Intellectual Property, an intellectual property company with a focus on the financial services industry, and Landing Rock Group, a financial services company with a focus on deposit insurance and cash management services. Bruce Bent II is also associated with Young Presidents’ Organization, Scenic Hudson, The Reserve and Hallmark First Mutual Fund among many other organizations.
For more information follow Bruce Bent II on Twitter @ bbentii