What is a 'Short-Term Investment Fund - STIF'

A short-term investment fund (STIF) invests in short-term investments of high quality and low risk. This type of fund is considered to be one of the most conservative investments in the investment market. Investors invest in short-term investment funds to protect capital. Short-term investment funds are generally expected to keep pace with inflation and earn marginally higher returns than a standard personal savings account. Short-term investment funds are also generally considered to be liquid investments.

BREAKING DOWN 'Short-Term Investment Fund - STIF'

Short-term investment funds offer investors the opportunity to protect capital while earning a marginal rate of return. Many short-term investment funds benchmark their fund returns to a Treasury bill index. Short-term investment funds typically include cash, bank notes, government bills and conservative bond holdings characterized as safe short-term debt instruments.

Short-term investment funds are also known for liquidity. These types of funds are often used by investors who seek a short-term holding before moving their investments to another investment that will provide higher returns. These funds traditionally have low management fees, usually well below 1% per year. They also typically have low transaction costs.

Short-Term Investment Fund Managers

Money market funds are the most broadly known short-term investment funds. Short-term investment funds can also invest in short-term bonds in various categories. Below are examples of investment providers that offer a wide array of money market funds for investors.

Schwab

Schwab Purchased Money Funds are grouped into three categories: prime, government and treasury, and municipal. Investor share classes require a minimum investment of $1.

Vanguard

Vanguard offers three taxable money market funds and numerous non-taxable municipal funds. Prices of the funds are $1. Expenses range from 0.09% to 0.16%.

JPMorgan

JPMorgan offers approximately 60 money market funds. JPMorgan money market funds have a net asset value of $1. The JPMorgan Prime Money Market Fund (CJPXX) has the best one year return as of October 31, 2017. The Fund’s one year return is 1.03%. The Fund has an expense cap of 0.18%.

American Century

American Century offers five funds in their money market category. American Century money market funds offer free check writing for liquidity and easy accessibility. The Prime Money Market Fund (BPRXX) is one of the category’s top performers. Its total year to date return as of December 1, 2017 was 0.52%. The Fund has over $1 billion in total assets with an expense ratio of 0.58%.

RELATED TERMS
  1. Breaking the Buck

    Breaking the buck occurs when the net asset value (NAV) of a ...
  2. Short-Term Debt

    An account shown in the current liabilities portion of a company's ...
  3. Fund

    A fund is a source of money that is allocated for a specific ...
  4. New Fund Offer - NFO

    A new fund offer is the first subscription offering for any new ...
  5. Family of Funds

    A family of funds includes all the funds managed by one investment ...
  6. Global Fund

    A global fund is a fund that invests in companies located anywhere ...
Related Articles
  1. Investing

    Preserve Money With These Low-Risk Investments

    Short-term bond funds may provide low returns, but they also preserve capital and may provide peace of mind for those seeking low risk and guaranteed protection against loss.
  2. Investing

    The 5 Best American Funds

    Discover five of the best-performing mutual funds offered by American Funds, based on the funds' five-year average annualized returns.
  3. Investing

    Introduction To Money Market Mutual Funds

    Learn about the easiest way to benefit from money market securities.
  4. Financial Advisor

    5 Characteristics of Strong Mutual Fund Shares

    Discover some of the basic characteristics shared by good mutual funds that investors can use to help them in selecting funds.
  5. Financial Advisor

    Fidelity Money Market Funds Overview

    Learn key information about the wide variety of money market mutual funds that Fidelity Investments offers investors seeking minimal risk and guaranteed income.
  6. Investing

    Trading Mutual Funds for a Living: Is It Possible?

    Find out why trading mutual funds for a living isn't your best bet, including how funds discourage short-term trading and which options may better serve you.
  7. Investing

    The Top 5 Short-Term Bond Funds for 2016

    Learn how short-duration bonds can add value to an asset allocation strategy, and discover the top five short-term bond funds for 2016.
  8. Investing

    3 Best High-Yielding Short-Term Bond Mutual Funds

    Learn about the three best high-yielding short-term bond mutual funds and how your portfolio can potentially benefit from investing in them.
  9. Financial Advisor

    The 4 Best U.S. Equity Index Mutual Funds

    Find out which four index mutual funds are among the best U.S. equities index mutual funds for core holdings in your investment portfolio.
RELATED FAQS
  1. Which financial instruments have par values?

    Understand the difference between short-term investments and marketable equity securities, and learn the importance of short-term ... Read Answer >>
  2. What typically comprises a money market fund?

    Learn about the basic types of money market funds and discover how they are characterized by the types of investments that ... Read Answer >>
  3. What are some examples of money market funds?

    Learn more about different types of money market mutual funds, including those that invest in government paper versus commercial ... Read Answer >>
  4. Mutual funds vs. money market funds

    Learn what a mutual fund and a money market fund are, understand the differences between each, and how they serve various ... Read Answer >>
Hot Definitions
  1. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  2. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  3. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
  4. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
  5. Limit Order

    An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.
  6. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
Trading Center