Short-term or money market funds invest in government or corporate bonds with variable interest rates or fixed interest rates and short remaining terms to maturity.
The benefits of short-term and (near-)money market funds:
- No maintenance required by the investor. Cash managed by the fund manager. In the event of the repayment of bonds or coupon payments, the money is reinvested "automatically"
- Securities are selected by experts
- The risk is split between several issuers