What are the major similarities and differences among money market mutual funds and bond and/or equity (stock) mutual funds?
Money market, bond, and equity mutual funds are diversified investment portfolios developed to meet specific objectives. A money market mutual fund’s objective is capital preservation and safety of principal while the investment objective of a bond and/or equity (stock) mutual fund is typically income, growth, or growth and income. To achieve its objective the money market mutual fund may invest in short-term debt obligations such as T-bills, and other government securities. To achieve its income objective, a bond mutual fund may invest in short, medium, and/or long-term debt obligations such as government and/or corporate bonds.
