Saturday, December 25, 2010

Cash Fund

A cash fund is a fund that invests in cash and cash equivalents (e.g. money market deposits, short term notes, commercial paper, time deposits). A cash fund is able to generate returns similar to bank deposits, or higher in some cases as specialist managers seek to add value; cash funds will likely also hold a large amount of securities and instruments, thus presenting diversification benefits. Cash funds are sometimes marketed as a cash management account or a cash management fund, and sometimes will provide holders checking and transaction facilities (similar to a bank account).

Synonyms: Cash management account, Cash fund, Money market account
 
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