Definition of money market fund

Open-ended mutual fund that invests in money market instruments such as certificates of deposit, commercial paper, Treasury bills, banker's acceptances and repurchase agreements. [1]

Take short-term money from investors and buy commercial paper and other securities. When money was pulled out during the financial crisis, funds dumped assets and stopped buying more, leaving many corporates unable to roll over short-term borrowing. [2]

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Money fund

Interactive graphic: fear grips the money markets