The Zedcrest Money Market Fund is a Mutual Fund that invests in short-term high quality debts instruments such as Treasury Bills, Commercial Papers, Certificates of Deposits etc.
The Zedcrest Money Market Fund is designed to provide investors with a safe place to invest cash, offering higher yields than a traditional savings account while maintaining low risk. These funds are generally invested in highly liquid, short-term instruments with low credit risk, making them a stable and reliable investment option.
Why should you invest in the Zedcrest Money Market Fund?
Over the years, our Money Market Fund has topped the Fund Managers Association Nigeria(FMAN) lists. Making it among the top 3 of the best performing mutual funds in Nigeria.
1. Safety and Stability: One of the main reasons investors choose the Zedcrest Money Market Fund is the safety they offer. Since these funds primarily invest in government securities and high-quality corporate debt, they are considered low-risk. Although they are not entirely risk-free, the chances of losing your principal are minimal.
2. Liquidity: Money market funds are highly liquid, meaning you can easily convert your investment into cash whenever you need it, often without penalty. This makes Zedcrest Money Market Fund an excellent option for those who may need quick access to their funds but still want to earn a modest return.
3. Higher Yields Than Savings Accounts: While Zedcrest Money Market Funds are low-risk, they often provide higher returns than a traditional savings account or a checking account. This makes them an appealing choice for investors looking to earn a bit more on their idle cash without taking on significant risk.
4. Diversification: For investors with a broader portfolio, money market funds can offer an additional layer of diversification. Because they invest in short-term debt instruments across a variety of issuers (government, corporate, etc.), they can help mitigate the risk of a specific asset class.
How does the Zedcrest Money Market Fund work?
Money market funds pool money from multiple investors to purchase short-term securities that pay interest. The value of the Zedcrest MMF is typically expressed as a “net asset value” (NAV), which is usually maintained at 1 naira per share. The NAV may fluctuate slightly based on interest rates, but it rarely deviates significantly from this value.
Investors in Zedcrest MMFs earn income in the form of dividends, which are usually paid out monthly or quarterly. The return on an MMF is influenced by prevailing interest rates in the market, when interest rates rise, the yields on MMFs typically increase, and when interest rates fall, the yields tend to decrease.
Who should invest in the Zedcrest Money Market Fund?
Money market funds are ideal for:
- Conservative Investors: If you’re risk-averse and prioritize the preservation of capital over high returns, MMFs provide a stable and safe place to park your money.
- Short-Term Investors: If you’re saving for a specific goal in the near future, such as a vacation or a down payment on a house, MMFs can offer a safe option for preserving your capital while earning a return.
- Emergency Fund Holders: Many financial planners recommend investing in a money market fund for your emergency fund since these funds provide liquidity and security.
- Investors Seeking Diversification: MMFs can be a useful tool for diversifying a portfolio that includes riskier investments like stocks and bonds.
Conclusion
The Zedcrest Money market funds are a valuable tool for investors seeking low-risk, liquid investments with modest returns. They offer a safe place to park your cash while earning more than a savings account. However, they are not suitable for long-term wealth-building, so it’s important to understand their role within your overall investment strategy.
If you’re looking for a short-term, stable investment option, the Zedcrest Money market fund could be the right choice for you.
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