Master Fee

Money Market vs Revenue Fund

Money Market Fund fund managers specialize in placing clients' funds in the best possible terms at institutions that want to borrow money for a short period of time. Access to wholesale markets allows money market funds to offer higher returns than trafficking banks. Money Market Fund Managers may invest in interest-bearing instruments only with a maximum of 90 days term. Money market fund price per share does not vary, it stays R1.00 per unit. Money market funds vary the interest rate and not the capital value. Return on money market fund varies daily. Clients who want to avoid risk invest in Money market funds. Interest received from this is income taxable. Money market fund returns do not really beat inflation. income Funds Portfolio managers of income funds invest in short-term securities, cash and money market funds. Their main purpose is to generate income from the composition of interest rates of the specific fund. Fund managers are restricted by legislation and funds may not be exposed to long-term securities, thus protecting investors from excessive risks.

​Income fund managers therefore focus on short-term instruments - with a maximum term of two years. It is therefore much longer than the 90 days of a money market fund. Such a longer term gives the fund a better chance of capital growth, while also earning an income. An income fund is thus a crossing of bonds and money market funds. Risk is slightly higher than money market funds because it is exposed to state and commercial effects. Income funds pay interest quarterly. Income from income funds is income taxable.