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Retail Money Funds
Money funds can be purchased directly from mutual fund company or from a securities firm. Typically these funds hold short-term debt obligations and cash instruments such that the weighted average is 90 days or less. Yields vary based on portfolio holdings and market conditions. Historically money funds have been able to maintain a $1 net asset value by investing in highly-rated or government-backed financial instruments and prevent loss of principal, but investors have no guarantees or federal insurance against losses.
The following funds have reported assets over $100 million and expense ratios below 0.75%. The yield quoted is the 7-day effective yield net of expenses which includes the compounding effect of dividends and is a better direct comparision to the annual percentage yields (APYs) quoted by banks. Yields are not updated daily.Touchstone Money Market Fund 2.53%, minimum $2,500
AARP Money Market Fund 2.45%, minimum $100
TIAA-CREF Money Market Fund 2.44%, minimum $2,500
Fidelity Select Money Market Portfolio 2.44%, minimum $2,500
Fidelity Money Market Fund 2.44%, minimum $25,000
USAA Money Market Fund 2.44%, minimum $1,000, require USAA membership
Fidelity Cash Reserves 2.43%, minimum $2,500
Dreyfus BASIC Money Market Fund 2.38%, minimum $25,000
Western Asset Money Market Fund 2.38%, minimum $1,000
Harbor Money Market Fund 2.31%, minimum $1,000
PayPal Money Market Fund 2.31%, minimum $1
Schwab Value Advantage Money Fund 2.27%, minimum $25,000
Putnam Money Market Fund 2.26%, minimum $500
Dreyfus Liquid Assets Money Market Fund 2.26%, minimum $2,500
Thrivent Money Market Fund 2.25%, minimum $1,500
Vanguard Prime MMF 2.20%, minimum $3,000
GE Money Market Fund 1.93%, minimum $500
RBB Money Market Fund 1.83%, minimum $1
Money funds typically invest in U.S. Treasury securities, U.S. government agency securities, certificates of deposit, commercial paper, eurodollar CDs, corporate notes, and repurchase agreements. To date no investor has lost principal by purchasing a mutual fund money market which was registered with the SEC. The 7-day effective yields listed above are not updated daily, please visit the mutual fund company's site to receive the most current yield quote. Send your questions regarding money funds here.
MONEY FUND NEWS
Major companies like Bank of America Corp, Legg Mason, Inc., SunTrust Banks Inc., and Citigroup Inc. are reported to have been forced to invest funds into their own money market funds to prop up the net asset value at a stable $1 after incurring losses in a complex financial instrument called SIVs or Structured Investment Vehicles. Money fund managers have used SIVs to boost their yield, while other managers like those at Vanguard and Janus Capital Group have stated that their mutual fund company have not used SIVs in their money market funds.Posted 8/13/08