money fund: meaning, definition, pronunciation and examples
C1+Formal, Financial
Quick answer
What does “money fund” mean?
A type of investment fund that invests in low-risk, short-term debt securities and cash equivalents, designed to provide high liquidity and preserve capital.
Audio
Pronunciation
Definition
Meaning and Definition
A type of investment fund that invests in low-risk, short-term debt securities and cash equivalents, designed to provide high liquidity and preserve capital.
A professionally managed collective investment scheme that pools money from many investors to purchase safe, liquid, short-term financial instruments like treasury bills, certificates of deposit, and commercial paper. It is often used as a place to park cash temporarily, offering stability and easy access to funds.
Dialectal Variation
British vs American Usage
Differences
No significant difference in meaning. The term is used in both financial contexts. 'Money market fund' is equally common in both varieties.
Connotations
Identical connotations of safety, liquidity, and professional management in finance.
Frequency
Equally frequent in specialised financial discourse in both the UK and US.
Grammar
How to Use “money fund” in a Sentence
The company placed its excess cash in a [money fund].The [money fund] is offering a yield of 2.1%.Investors are fleeing equity markets for the safety of [money funds].Vocabulary
Collocations
Examples
Examples of “money fund” in a Sentence
verb
British English
- The firm decided to money-fund their short-term capital.
- We are money-funding our cash reserves for the quarter.
American English
- The treasury department will money-fund the excess liquidity.
- They are money-funding their operating cash.
adverb
British English
- The assets were invested money-fund style.
American English
- They managed the cash money-fund conservatively.
adjective
British English
- They opted for a money-fund investment strategy.
- The money-fund yield was surprisingly attractive.
American English
- The company has a money-fund allocation in its portfolio.
- She reviewed the money-fund prospectus carefully.
Usage
Meaning in Context
Business
A treasurer might move corporate cash reserves into a money fund to earn a small return while maintaining instant access.
Academic
The paper analysed the systemic risk posed by the run on prime money funds during the 2008 financial crisis.
Everyday
My savings account rate is so low, I'm thinking of putting some money into a money fund instead. (Note: Everyday use is rare and implies financial literacy)
Technical
The fund's weighted average maturity (WAM) must remain below 60 days to maintain its classification as a government money fund under SEC Rule 2a-7.
Vocabulary
Synonyms of “money fund”
Strong
Neutral
Weak
Vocabulary
Antonyms of “money fund”
Watch out
Common Mistakes When Using “money fund”
- Using 'money fund' to refer to any source of funding (e.g., 'The grant is my money fund for the project.').
- Confusing it with a 'mutual fund' (which is broader and can include stocks).
- Misspelling as 'monies fund'.
FAQ
Frequently Asked Questions
No. While both aim for safety and liquidity, a money fund is an investment product whose value can technically fluctuate (though it aims for a stable price), is not government-insured like a bank deposit, and may offer a different yield structure.
It is very rare but possible. Money funds aim to maintain a stable net asset value (NAV), usually £1 or $1 per share. However, they are not guaranteed, and in extreme financial stress (e.g., 2008), they can 'break the buck,' meaning the NAV falls below £1 or $1.
In modern financial terminology, they are effectively synonymous. 'Money market fund' (MMF) is the more precise and commonly used full name, while 'money fund' is a standard abbreviation.
They are used by individual investors seeking a safe place for cash, corporations managing treasury operations, institutional investors for cash sleeves, and financial advisors as a temporary holding position within client portfolios.
A type of investment fund that invests in low-risk, short-term debt securities and cash equivalents, designed to provide high liquidity and preserve capital.
Money fund is usually formal, financial in register.
Money fund: in British English it is pronounced /ˈmʌni fʌnd/, and in American English it is pronounced /ˈmʌni fʌnd/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “It's not a money fund, it's a money pit.”
Learning
Memory Aids
Mnemonic
Think of a **fund** for your **money** that's safe and always ready to use, like a high-tech piggy bank managed by experts.
Conceptual Metaphor
MONEY IS A LIQUID (Money funds provide a 'pool' of liquidity). SAFETY IS A HARBOUR (Money funds are a 'safe harbour' for capital).
Practice
Quiz
What is the primary characteristic of a money fund?