IMMFA Publishes Investor Insights
The London-based Institutional Money Market Funds Association, or IMMFA, announced the publication of "a series of investor 'Insights', designed to provide useful information to investors on key matters which influence investment decisions." IMMFA's website explains, "This series of one page documents currently covers Selecting a Money Market Fund, Comparing CNAV and VNAV Funds, Managing and Mitigating Credit Risk, and Investing in an IMMFA Money Market Fund." (The site and IMMFA member funds are geared towards European institutional investors.) The Selecting a Money Market Fund piece advises, "There are two principal types of money market fund available: (a) Constant Net Asset Value; and (b) Variable Net Asset Value. The two types may have different accounting and taxation treatments, so you should check local rules before investing. You should also consider the types of securities held by the fund. 'Prime' money market funds can invest in all types of money market securities, from deposits to short dated asset-backed securities, whereas 'Government' money market funds only invest in government debt. If you are looking for a lower risk investment, you might want to consider Government funds." The Investing in an IMMFA Money Market Fund brief says, "Since 2003, IMMFA members have adhered to a Code of Practice. The IMMFA Code is designed to deliver best practice standards in the management and operation of money market funds. These requirements aim to provide investors with a product that is resilient and able to effectively manage and mitigate risks."
