United States Treasury Money Mutual Fund

What Is a United States Treasury Money Mutual Fund?

A United States Treasury money mutual fund is a mutual fund that pools money from investors to purchase low-risk government securities. A United States Treasury money mutual fund is a type of mutual fund that invests essentially or only in U.S. government debt, for example, Treasury bills and repurchase agreements. U.S. Treasury money mutual funds are a leading investment for investors seeking to preserve principal or invest cash briefly.

Figuring out a United States Treasury Money Mutual Fund

U.S. Treasury money mutual funds are one of the industry's best low-risk investments. These mutual funds commonly invest in U.S. Treasury bills and are profoundly stable and liquid. These funds are generally classified as either money market funds or found in low-risk fixed income categories. Treasury bills are secured by the full faith and credit of the United States Treasury, which assists with making these portfolios reliable wellsprings of low-risk returns due to the nation's developed economy and political stability.

U.S. Government Money Market Funds

Money managers across the industry offer money market mutual funds that fully invest in U.S. Treasuries. U.S. government money market mutual funds follow standard accounting principles that assistance to keep their net asset value at $1 per share at amortized cost as opposed to market value. These funds register as money market funds and are represented fundamentally by Rule 2a-7 of the Investment Company Act of 1940.

The rule specifies the type of quality the funds can invest in, guaranteeing that unquestionably the most elevated appraised debt is incorporated. Rules cover the maturity, credit quality, and liquidity of the securities invested. Under the rule, with respect to maturity, the average dollar-weighted maturity can't surpass 60 days. Under liquidity rules, 10% of assets must have the option to be changed over into cash in no less than one day, 30% in something like five days, and something like 5% can be held in securities that take more time than seven days to change over into cash.

Rules and regulations for money market funds have been updated to give even greater security to investors since the 2008 financial crisis when the famous Reserve Primary Fund broke the buck by falling below its $1 net asset value.

Frequently, U.S. government money market funds managed by brokerage service suppliers will be offered as cash sweep options or no-transaction-expense funds. Probably the most famous U.S. government money market funds include:

Vanguard Treasury Money Market Fund (VUSXX)

Fidelity Treasury Only Money Market Fund (FDLXX)

American Century Capital Preservation Fund (CPFXX)

U.S. Government Mutual Funds

Numerous investment managers across the industry additionally offer U.S. government mutual funds that are not characterized by the money market assignment but rather offer a significant number of similar benefits. These funds can offer marginally higher returns than money market funds with generally a similar risk. U.S. government mutual funds can incorporate short, intermediate, and long-term durations, with longer-term durations possibly offering enhanced returns. The absolute most famous U.S. government mutual funds include:

Eaton Vance Short Duration Government Income Fund (EALDX)

Commerce Short Term Government Fund (CFSTX)

United Hermes Total Return Government Bond Fund (FTRGX)

Fidelity Intermediate Treasury Bond Index Fund (FUAMX)

Vanguard Extended Duration Treasury Index Fund (VEDTX)

Fidelity Long-Term Treasury Bond Index Fund (FNBGX)

Features

Money mutual funds are regulated by the Securities and Exchange Commission (SEC), which specifies rules in regards to maturity, credit quality, and liquidity of securities.
These funds are great for investors seeking stable investments that preserve invested principal.
A U.S. Treasury money mutual fund invests in low risk and exceptionally liquid investments like U.S. Treasury bills.