Top 3 Myths about Money Market Funds

Money market funds have become increasingly popular in recent years because of their high liquidity and low cost of borrowing. This has led to a rise in popularity among investors who want to diversify their portfolios with low-risk investments that don't require any additional analysis or research. Some people think that money market funds are too risky to invest in. They are also probably unaware that they can be incredibly profitable and might not know why. 

We are here to help! In this article, we will bust three of the most common myths about money market funds:

Myth 1: Money market funds are the same as savings accounts.

Money market funds are not savings accounts. A money market fund is a mutual fund that pools investor money to buy securities. The value of the shares of a mutual fund can fluctuate based on the performance of its investments and other factors. This makes them like stocks in that they are subject to price swings. But unlike stocks, there is no guarantee that their value will keep pace with inflation or maintain their current buying power over time.

Myth 2: Money market funds have no return on investment.

The second myth is that money market funds do not have a return on investment. This is true, but it is also important to remember that these funds are low risk and usually guaranteed by the government (the Securities & Exchange Commission). So if you are looking for a safe place to keep your money, consider this option!

Myth 3: Money market funds are insured against loss by the FDIC.

Money market funds are not insured by the FDIC, meaning you cannot claim your money if it is lost. However, this is not to say that all money market funds are uninsured. Some companies offer FDIC-insured CDs (certificates of deposit) and CDs insured by the Securities Investor Protection Corporation (SIPC). Money market mutual funds also protect against loss through low-interest rates and other features like liquidity requirements for redemption. But these protections do not apply to individual investors who buy shares directly from a fund manager rather than through an intermediary like an investment advisor or broker-dealer.

Should You Invest in Money Market Funds?

Money market funds offer investors a way to get exposure to the economy without dealing with the volatility of stocks or bonds. So should you invest in them? It depends on your goals and risk tolerance. If you are considering a low-risk investment, you should consider AXA Mansard's Money Market Fund.

Our team of experienced professional asset managers makes the best investment decisions with your funds. Some of the benefits you enjoy include:

• Liquidity
• Affordability
• Professional Management
• Performance Monitoring
• Accessibility

And the best part? There is no heavy lifting on your part. Simply create a profile, buy credits from your dashboard and watch your nest egg grow.