Money market funds are investment funds that invest in the money market (within one year, with an average term of 120 days). Mainly invest in short-term monetary instruments, such as treasury bonds, large negotiable certificates of deposit, commercial bills, corporate bonds and other short-term varieties.

There are different types of money market funds.

If classified by sponsorship, it can be divided into company type and contract type. The company type absorbs public funds by issuing shares, and the investment income is reflected in the cumulative number of shares, not the change of net asset value. Most mutual funds in the United States fall into this category. Contract type means that investors sign contracts with fund managers and custodians and entrust them to manage on their behalf, and the investment income is reflected in the net value of the fund. For example, mutual funds in Britain belong to this category.

According to the classification of investors' attributes, general-purpose funds-funds come from ordinary investors; Funds for brokers-underwriters sell through brokers and brokers, and brokers sell to the public; Money market funds that invest in legal persons-funds mainly come from corporate and bank credit departments.

In addition, funds can be classified according to whether they pay taxes or not. Take the United States as an example, they are divided into: tax-based treasury bonds money market funds-mainly investing in short-term US treasury bonds and other short-term financial bonds issued or guaranteed by the US federal government or its subsidiaries; Tax-type non-government bond money market funds-mainly invest in short-term money market instruments, including time deposit certificates, commercial promissory notes and bank acceptance bills issued by large banks, with an average maturity of less than 90 days; The national tax-free money market fund-investing in the short-term government bonds issued by the municipal government, its income can be exempted from federal government tax; State tax-free money market fund-mainly invests in short-term bonds issued by a single state government, and residents living in the state are exempt from federal and state income tax on the income of the fund. Judging from the situation of American money market funds in199, the scale of funds reached161200 million dollars, of which tax money market funds accounted for the vast majority, accounting for1408 billion dollars; The tax-free money market fund is $204 billion.