Mutual funds are a popular choice for investors who want to buy stocks but don’t want to take as much risk. Money market funds are different from money market bank accounts, which are a type of savings account that pays interest on deposits.
Instead of just keeping their money in cash, money market funds also spend some of it on low-risk securities. Because of this, money market funds are riskier than money market bank accounts. However, they are a more flexible way to spend, and they could give you a bigger return.
The most current report from the Securities and Exchange Commission says that money market funds earn about 5%. The Federal Deposit Insurance Corp. says that the average rate on a savings account is only 0.63%.
Top 5 Money Market Funds to Invest in August 2023
The best money market funds for August 2023 were looked into by GOBankingRates. The picks below are based on things like seven-day yields, costs and fees, minimum investments, and the lack of sales loads and redemption fees. They include famous picks from big fund families like Vanguard and Fidelity.
- The Vanguard Treasury Money Market Fund (VUSXX) invests in government bonds.
- Fidelity Government Cash Reserves (FDRXX) is a type of investment.
- Capital Preservation Fund (CPFXX) of American Century Investments.
- The JPMorgan Liquid Assets Money Market Fund (MJLXX) is a type of money market fund.
- Investor Shares of the Schwab Value Advantage Money Fund (SWVXX)
1. Vanguard Treasury Money Market Fund (VUSXX)
The Vanguard Treasury Money Market Fund only buys Treasury bonds and fully collateralized repurchase agreements, which are contracts to sell an asset at a certain price and buy it back later, usually at a higher price.
As of July 31, 34.30% of its exposure came from repurchase deals. It is an actively managed fund whose goal is to make money now and keep its net asset value at $1.
- Type of Fund: Government
- Yield in 7 Days: 5.16 %
- $57 billion in net assets
- Cost-to-income ratio: 0.09%
- The least you can invest is $3,000.
2. Fidelity Government Cash Reserves (FDRXX)
The goal of the Fidelity Government Cash Reserves fund is to provide a high amount of current income while keeping capital and liquidity safe. Even though the three-month Treasury bill is the main standard for the fund, T-bills make up less than 5% of the portfolio.
Most of the rest is made up of agency floating rate assets (20.84%) and U.S. government repurchase agreements (64.23%).
- Type of Fund: Government
- 4.98 percent in 7 days
- $217.9 billion in net worth
- Ratio of expenses: 0.4%
- The least you can spend is $0
3. American Century Investments Capital Preservation Fund (CPFXX)
The main goal of this carefully managed fund is to provide as much safety and cash as possible. Second, it tries to give shareholders the best rate of return possible while still being safe and easy to deal with. It does this by buying short-term Treasury notes, whose income is not taxed by the state.
- Type of Fund: Government
- Return in 7 days: 4.83%
- $2.29 billion in net assets
- Cost-to-income ratio: 0.48
- Minimum Investment: $500 with an annual investment of $100, or $2,500 without automatic investment
4. JPMorgan Liquid Assets Money Market Fund (MJLXX)
The JPMorgan Liquid Assets Money Market Fund invests in high-quality short-term assets like time deposits (13.6% of the portfolio), CDs (27.9%), and commercial paper from banking companies (14.9%).
The fund is managed by a team with a lot of experience. Together, they have 81 years of experience in the business and 43 years of experience managing this fund.
- Type of Fund: Prime
- Yield in 7 Days: 5.05%
- $49.59 billion in net assets
- Cost-to-income ratio: 0.59
- Minimum payment: $1,000 for the first payment, then $50
5. Schwab Value Advantage Money Fund — Investor Shares (SWVXX)
The Schwab Value Advantage Money Fund has a weighted average duration of just 21.9 days. This is because it is an actively managed fund. Its goal is to make as much money as possible right now while keeping cash and liquidity safe.
As of June 30, the Federal Reserve Bank of New York, J.P. Morgan Securities, and BofA Securities were three of the top 10 assets.
- Type of Fund: Prime
- Return in 7 days: 4.94%
- $135,18 billion in net assets
- Cost-to-income ratio: 0.34
- The least you can spend is $0
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