Money market funds have preservation of capital and the provision of liquidity as their primary objectives. The ratings process methodically assesses and weighs each fund in terms of its ability to deliver on these objectives.
Each credit rating agency has a unique set of rating criteria. Common themes are the characteristics of the assets in the portfolio, the composition of the portfolio and the legal and operational framework of the fund.
Fund providers are required to provide regular reporting to allow the credit rating agencies to undertake continuous surveillance of the ratings.
A comparison of different money market fund ratings has been compiled by the European credit rating agencies most involoved with MMF.