imageShort-Term Funds

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

 

Risks to be considered:     

  • The repayment of the nominal amount and ongoing interest payments depends on the issuer's credit rating
  • Despite generally exhibiting low levels of fluctuation, the net asset value can fall (particularly in times of rising interest rates)
  • Depending on the category there may also be foreign currency risks (such as US dollar money market funds etc.) that could have an impact on the net asset value