Money Market Funds - meaning of NAV set to one currency unit

vandhana.gopalakrishnan
Posts: 5
Joined: Tue Jul 17, 2012 12:31 pm

Money Market Funds - meaning of NAV set to one currency unit

Postby vandhana.gopalakrishnan » Sun Aug 19, 2012 1:38 am

What does it mean to say "NAV's are set to one currency unit" or "money market funds maintain a NAV of $1.00 per share" ?

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content.pristine
Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Re: Money Market Funds - meaning of NAV set to one currency

Postby content.pristine » Fri Nov 02, 2012 6:11 pm

Hi,

In the United States, money market Mutual Funds are set to 1 and reset to 1 everyday. The daily interest earned by the fund is paid back to the investor on a daily basis to keep the NAV at 1. That way, the fund manager is not responsible for reinvesting small amounts of money.

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