Glossary

A money market fund is a type of mutual fund that invests in short-term, low-risk debt securities, such as government bonds, treasury bills, and commercial paper. 💵

The primary goal of these funds is to provide investors with a safe place to park their cash while earning a modest return. Money market funds are considered highly liquid investments, allowing investors to easily withdraw their money when needed.

For example, an investor with idle cash in their brokerage account might choose to invest in a money market fund to earn some interest while maintaining easy access to their funds.

Fun fact: The first money market fund, the Reserve Fund, was launched in 1971 by Bruce R. Bent and Henry B. R. Brown. 🚀 It was designed to provide individual investors with an investment option that offered the same stability and liquidity as a traditional bank account, but with higher interest rates.