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KIC000145 - " Money Market Funds(cont'd Composition of...

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Unformatted text preview: " Money Market Funds (cont'd) Composition of Money Market Fund mm In Amman! “we .. Money Market Funds (cont’d) ‘ I Risk of money market funds D Credit risk is low. with the exception of commercial paper defaults D Money market securities are not too sensitive to movements in market interest rates El Expected returns on MMFs are low because of: . Low credit risk - Low interest rate risk n Consistently positive returns Money Market Funds (oont'd) - Management of money market funds . El The MMF portfolio manager maintains an asset 3 ‘ portfolio that satisfies the underlying objective of the fund I Manager: may change the asset composition if economic conditions change - Managers may Influence performance by changing the maturitiasnt' the semrttiee in vmtdi they invest El Some MMFs have little flexibility to change their portfolio composition because of their stated objectives : -* -- :>.‘ area «.397 __ MWA..4._.A, 'z , ,,_ "”1158? . 16 ‘l ...
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