More about MMFs

Money market funds (MMFs) are mutual funds that invest in short-term money market instruments. These funds allow investors to participate in a more diverse and high-quality portfolio than if they were to invest independently. Like other mutual funds, each investor in a money market fund is considered a shareholder of the investment pool; a part owner of the fund.

Key differences between new European MMF types

New fund categories

Public Debt CNAV MMF

LVNAV MMF

Short Term VNAV MMF

Standard VNAV MMF

Fund type

Short Term MMF

Short Term MMF

Short Term MMF

Standard MMF

Eligible investments

99.5% public debt securities, reverse repo secured with govt securities, cash.

MMI, deposits, ABCP, securitisations, reverse repo, repo, derivatives, other short term MMF shares

MMI, deposits, ABCP, securitisations, reverse repo, repo, derivatives, short term MMF shares

MMI, deposits, ABCP, securitisations, reverse repo, repo, derivatives, MMF shares

WAM / WAL

60 days / 120 days

60 days / 120 days

60 days / 120 days

180 days / 365 days

Max maturity

397 days

397 days

397 days

2 years

Daily liquidity

10%

10%

7.5%

7.5%

Weekly liquidity

30%

30%

15%

15%

New fees and gates*

Yes

Yes

No

No

Asset valuation

Amortised cost

Amortised cost, except for assets over 75 days maturity or more than 10bp from market value

Mark to Market

Mark to Market

NAV Type

Constant NAV

Constant NAV

Variable NAV

Variable NAV

NAV particulars

To 2 decimal places (or equivalent), i.e. €/£/$1.00

Rounds to 50bp, i.e. nearest % point

To 2 decimal places (or equivalent), i.e. €/£/$1.00

Rounds to 20bp, otherwise Variable NAV applies

To at least four decimal places (or equivalent), e.g. €/£/$10,000.00

To at least four decimal places (or equivalent), i.e. €/£/$10,000.00

Shadow NAV calculation

Yes – daily Mark to Market

Yes - daily Mark to Market

N/A

N/A

Source: Regulation (EU) 1131/2017

*UCITS has long-standing provisions on fees and gates. This reference is to additional rules applying both discretionary and mandatory fees or gates to the Public Debt CNAV and LVNAV MMF types in prescribed circumstances. More information may be found in our May 2018 investor pamphlet on EU MMF reform.