Short-Term Investment Fund (STIF)

What Is a Short-Term Investment Fund (STIF)?

A short-term investment fund (STIF) invests in short-term money market investments of high quality and low risk. This type of fund is viewed as perhaps of the most conservative investment in the investment market. Investors invest in short-term investment funds to safeguard 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 likewise generally viewed as liquid investments. As a matter of fact, some short-term investments funds furnish investors with checks that they can compose against the funds in their short-term investment funds, for straightforward entry to these funds. Most funds additionally give investors online access to put aside installments and withdrawals, or view month to month, annual, and quarterly statements. On account of their high degree of liquidity, investors can set aside installments and withdrawals to these funds at whatever point they need; many such funds promote 100% daily liquidity.

Understanding the Short-Term Investment Fund (STIF)

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

Short-term investment funds are additionally known for liquidity. These types of funds are frequently utilized by investors who look for a short-term holding before moving their investments to another investment that will give higher returns. These funds customarily have low management fees, generally well below 1% each year. They additionally regularly have low transaction costs.

Short-Term Investment Fund Managers

Money market funds are the most extensively realized short-term investment funds. Short-term investment funds can likewise invest in short-term bonds in different categories. Below are instances of investment suppliers that offer a wide exhibit of money market funds for investors.

Schwab: Schwab Purchased Money Funds are assembled into three categories: prime, government and treasury, and municipal. Investor share classes require a base investment of $1, with seven-day yields of between 0.77%-1.6%. Schwab's Variable Share Price Money Funds require a base investment of $1 million and offers seven-day yields of 1.6%.
Vanguard: Vanguard offers three taxable money market funds and various non-taxable municipal funds. Prices of the funds are $1. Expenses range from 0.09% to 0.16%. Average annual returns range from 1.45%-4.89%.
JPMorgan: JPMorgan offers around 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 December 31, 2019. The Fund's one year return is 2.17%. The Fund has an expense cap of 0.18%.
American Century: American Century offers five funds in its money market category. American Century money market funds offer free check composing for liquidity and simple accessibility. The Prime Money Market Fund (BPRXX) is one of the category's top entertainers. Its total year to date return as of December 31, 2019, was 1.68%. The Fund has more than $1.4 billion in total assets with an expense ratio of 0.57%.

Highlights

Short-term investment funds are generally high quality with low risk.
These funds are known for liquidity.
STIFs are the most conservative types of investments on the market.