Money market funds (MMFs) are a vital element of a treasurer’s short-term investment toolkit. The security, liquidity, and yield offered by MMFs enable treasurers to look beyond bank deposits, while ESG MMFs can help support broader sustainability goals.
MMFs have long been a popular instrument for corporate treasurers to invest surplus cash. A critical reason for this is that the funds offer diversification and daily liquidity without notice.
Sandrine Rougeron, Global Head of Corporate and Corporate Pension Fund Clients, Amundi, comments: “Today, corporate treasurers are investing more in MMFs to diversify their surplus cash allocation. They are also increasingly referencing and using MMFs to allocate their surplus cash, showing renewed interest in MMFs invested in government debt to de-risk from banks.”
MMFs offer several benefits for corporate treasury investors. They provide daily liquidity by investing in highly liquid short-term debt issued by governments, banks, and corporations. Through this high-quality universe of short-term debt instruments, MMFs also give treasurers security for their cash.
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