tax-exempt money market fund

Tax-exempt money market fund

A money market fund that invests in short-term tax-exempt municipal securities.

Tax-Exempt Money Market Fund

A mutual fund that invests predominantly or exclusively in short-term municipal bonds. The returns on a short-term municipal bond fund derive from coupons on the municipal bonds, and are therefore tax exempt. The short-time frame of the bonds makes the fund quite liquid. As a result, these funds are beneficial for short term investors who wish to minimize their tax liability.

tax-exempt money market fund

An open-end investment company that invests in short-term tax-exempt securities. These funds usually pay relatively low current income (free of federal taxes) but are very liquid. They appeal to higher-income investors who seek a temporary investment. Also called short-term municipal bond fund.
References in periodicals archive ?
Securities and Exchange Commission, affirmed and simultaneously withdrawn the 'Ammf' rating assigned to Federated Municipal Obligations Fund, a U.S.-registered tax-exempt money market fund (MMF) managed by Federated Investment Management Company.
New York: Fitch Ratings has affirmed and simultaneously withdrawn the 'Ammf' rating assigned to Federated Municipal Obligations Fund, a U.S.-registered tax-exempt money market fund (MMF) managed by Federated Investment Management Company.
VRDOs, tax-exempt municipal securities issued by local governments to raise revenue, are primarily held by tax-exempt money market funds that are typically owned and managed by the defendant banks, according to a news release from the city.
Tax-exempt money market funds have recently showed renewed strength after several years of lackluster yields in a prolonged low-interest-rate environment.
The new rules also saw a sharp slide in the assets of tax-exempt money market funds, which contain securities issued by state and local governments.
Prime and tax-exempt money market funds that are sold to institutional investors must price their shares and transactions using a "floating" net asset value (NAV), rather than the stable $1 NAV that such funds have long maintained.
BofA Global Capital Management provides clients with access to a range of taxable and tax-exempt money market funds; a U.S.
* Tax-exempt money market funds invest in short-term municipal securities and must have average maturities of 90 days or less.
Tax-exempt money market funds and other tax-advantaged investments, such as municipal bonds, may be attractive options for corporate cash reserves.
"Otherwise, the interest from a national municipal bond fund may be subject to state and local income tax." Bolton says that there are also national and single-state tax-exempt money market funds that can provide tax-free interest on cash you're parking for the short-term.
Table 1 Average Percentage of AU Outstanding Bonds Held by Different Investors in Municipal Bonds, 1976-1992 Investors(a) 1976-1986 1987-1992 Commercial banks 36.90 12.83 Households individuals) 34.21 50.11 Property insurance companies 17.67 13.33 Tax-exempt mutual funds 2.04 10.40 Tax-exempt money market funds 1.88 10.38 (a) The balance of the market is comprised of purchases made by state and local governments, pension funds, savings and loan associations, mutual savings banks, life insurance companies, and brokers and dealers.
Similar rules are being studied for tax-exempt money market funds and a proposal may be forthcoming from the SEC in early 1992.