Filling the Gaps: Money Market Funds

Mark Allen, Head of EMEA Cash Sales, Goldman Sachs Asset Management

The financial crisis has transformed corporate perceptions of liquidity and risk, and treasurers are now seeking more secure, diversified and liquid investments for their short-term cash flow. Mark Allen explains the new industry proposals for complete transparency over what a Money Market Fund comprises and why MMFs are potentially the ideal replacement for short-term deposits.

The article also describes why the proposals are needed, and how they aim to both strengthen the resilience of MMFs in a crisis and ensure fair treatment of investors whilst still providing historically reliable and convenient means for them to achieve their security, liquidity, and yield demands. Additionally, the differences between 'Short-term' MMFs and 'Regular' MMFs under the new proposals are analysed in order to show how the proposals will make it easier for investors to make informed investment choices.