WEALTH PATH

Friday, October 01

6 advantages of investing in money market fund

Investing in money market fund is a profitable and relatively simple way to increase your savings. Money market fund are a collection of investment in stocks, bonds, and other securities. They are created when a company brings together a group of people and invests their money in a group of securities.

The money market fund performance is actively managed by professional fund managers and this important fact often eliminates the stress and time consumption of analysing balance sheets and financial statement yourself.

Here are 6 advantages of investing in money market fund:

  1. Beat inflation - Money market fund is an ideal investment option to place your savings for a long-term inflation adjusted growth and the buying power of your money does not plummet over the years.
  2. Expert fund managers - Supported by a dedicated research team, investors are offered with the services of experienced fund managers who make financial decisions to meet the objectives of the money market fund plan. They have real-time access to crucial market information and can execute trades on the most cost-effective scale.
  3. Diversification - Money market fund schemes help mitigate risks to a large extent by distributing investors’ funds across a diverse range of assets. It is advisable for investors with a limited investment capital to start investing in money market fund.
  4. Low cost - Money market fund is relatively affordable. Low investment cost is the biggest advantage of investing in money market fund. You can start investing in money market fund with as low as N2,000 depending on the fund manager. You can start with a low amount and receive the benefits of long-term equity benefits.
  5. Low risk & safety - Since they are so diversified in their selection of securities, investments in money market fund are low risk. If one stock within the fund is not doing well, the other stocks will continue to grow the portfolio.
  6. Liquidity - If you invest money in money market fund, you can withdraw your funds with a 24-hours’ notice. This is the advantage money market fund has over equity income fund, that is more long-term and has fixed maturity period.

Investing in money market fund will provide you with economies of scale as an investor. Since you are investing in a large pool of fund with fund managers, the risk of losing your investment is low. Click here to know about more benefits of investing in money market fund.