Caution and crunch (TT March08 p30-31)

Money market funds (MMFs) represent a cautious cash investment strategy with attractions when the outlook is hazardous. Bearing many of the characteristics of bank deposit accounts, MMFs have traditionally offered a high level of security, same-day access and the potential for higher returns. Volatility in global markets since the start of the decade has increased their appeal, a trend accelerated by the onset of the credit crunch. Corporate treasurers, traditionally the main users of MMFs, have now been joined by a wider range of investors including pension funds.