United States Treasury Money Mutual Funds

AAA

DEFINITION of 'United States Treasury Money Mutual Funds'

An investment fund that pools money from investors to purchase short-term, low-risk securities. A United States Treasury Money Mutual Fund is a type of mutual fund that invests primarily or exclusively in U.S. Treasury bills and repurchase agreements secured by Treasury bills. Each of these investments must meet standards described by the Securities and Exchange Commission (SEC) for credit quality, liquidity and diversification. Most investors who participate in a U.S. Treasury Money Mutual Fund do so to preserve principal, or who need a place to invest cash temporarily.

INVESTOPEDIA EXPLAINS 'United States Treasury Money Mutual Funds'

Since a U.S. Treasury Money Mutual Fund is a low-risk investment, its yields are correspondingly low. Treasury bills are secured by the full faith and credit of the United States Treasury, and are considered very low-risk investments because of the country's history of economic and political stability. These mutual funds typically calculate net asset value (NAV) once per day, usually following the close of the U.S. financial markets. The funds are invested with a goal of maintaining a net asset value per share of one dollar. As of May 2010, 9% of all U.S. mutual funds are money market funds.

RELATED TERMS
  1. Bond

    A debt investment in which an investor loans money to an entity ...
  2. United States Longshore And Harbor ...

    A program administered by a division of the United States Department ...
  3. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  4. Credit Quality

    One of the principal criteria for judging the investment quality ...
  5. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with ...
  6. U.S. Savings Bonds

    A U.S. government savings bond that offers a fixed rate of interest ...
RELATED FAQS
  1. How is it possible for a rate to be entirely risk-free?

    It is not possible for a rate to be entirely risk-free. The risk-free rate of return is a theoretical construct that underlies ... Read Full Answer >>
  2. How is the risk-free rate of interest used to calculate other types of interest rates ...

    The risk-free rate for bonds is used for pricing the yield spread as the difference between the interest rate on a bond and ... Read Full Answer >>
  3. What can cause the rate of return to be negative?

    Several factors can cause an investment to have a negative rate of return. Poor performance of a company or companies, turmoil ... Read Full Answer >>
  4. What is the difference between a repurchase agreement and reverse repurchase agreement?

    A repurchase agreement, or repo, is a form of collateralized lending, while a reverse repurchase agreement, or reverse repo, ... Read Full Answer >>
  5. What information should I focus on in my mutual fund's prospectus?

    The U.S. Securities and Exchange Commission (SEC) requires investment companies to provide potential and current investors ... Read Full Answer >>
  6. Which asset classes are the most risky?

    Equities is the riskiest class of assets. Dividends aside, they offer no guarantees, and investors' money is subject to the ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    The Treasury And The Federal Reserve

    Find out how these two agencies create policies to stimulate the economy in tough economic times.
  2. Options & Futures

    Top 6 Uses For Bonds

    We break down the stodgy stereotype to see what these investments can do for you.
  3. Personal Finance

    Get A Short-Term Advantage In The Money Market

    This investment vehicle is often the perfect stop-gap measure for growing your money.
  4. Active Trading

    Buy Treasuries Directly From The Fed

    If you want government securities, go straight to the source. We'll show you how.
  5. Bonds & Fixed Income

    The Money Market: A Look Back

    Learn how past inflationary periods can predict future real rates of return for cash investments.
  6. Retirement

    The Money Market

    If your investments in the stock market are keeping you from sleeping at night, it's time to learn about the safer alternatives in the money market.
  7. Mutual Funds & ETFs

    Pros & Cons Of Bond Funds Vs. Bond ETFs

    Understanding the pros and cons of bond funds and bond ETFs will help you choose the instrument that is best for building your diversified bond portfolio.
  8. Mutual Funds & ETFs

    How Janus Capital Makes Money

    Before investing in Janus, it is prudent to understand how it makes money and what costs detract from shareholder wealth.
  9. Mutual Funds & ETFs

    Pros and Cons: Preferred Stock ETFs vs. Bond ETFs

    A look at the differences between preferred stock ETFs and bond ETFs and when you should invest in one over the other.
  10. Bonds & Fixed Income

    African Sovereign Debt: Risks and Rewards

    African sovereign debt offers high yields and upside — if one has the stomach for the risk.

You May Also Like

Hot Definitions
  1. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  2. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  3. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  4. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  5. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
  6. Marginal Utility

    The additional satisfaction a consumer gains from consuming one more unit of a good or service. Marginal utility is an important ...
Trading Center