Fidelity says investors can choose between ‘investment style’ money market funds, which take a level of risk to seek an investment return and ‘treasury style’ money market funds, which principally seek capital preservation.
Treasury style money market funds tend to be AAA rated products that invest in high-quality short-term money market instruments, structured so that they are well insulated from market volatility with a stable net asset value, according to Fidelity.
Fidelity International group leader short term bond funds Marc Wait says investors who have decided to allocate more to cash need to think about how much risk they want to take and what type of cash fund they want.
He adds: “The Fidelity range of treasury style money market funds do not have direct exposure to the US sub prime asset class, nor do they hold any types of collateralised debt obligation investments.
“Treasury style money market funds have gained wider acceptance from corporate treasurers, pension funds, local authorities, charities, insurance companies and other financial institutions, and during times of market volatility are often used as a low risk alternative to other investment types.”