The fidelity investments money market treasury portfolio is one of the most popular money market mutual funds offered by Fidelity Investments. As one of the largest asset managers globally, Fidelity Investments offers a wide range of investment products, including mutual funds, ETFs, and cash management accounts. The fidelity investments money market treasury portfolio stands out for its focus on highly liquid, high-quality short-term Treasuries, making it an ideal place to park cash for the short term. This article will dive into the details and benefits of investing in this fund.
The fund invests exclusively in short-term U.S. Treasuries
The fidelity investments money market treasury portfolio, as the name implies, invests entirely in short-term U.S. Treasury securities. The fund’s holdings have an average maturity of less than 60 days, giving it an ultra-short duration profile. By investing exclusively in obligations backed by the full faith and credit of the U.S. government, the fund provides unmatched credit quality. The treasury portfolio’s conservative investment approach makes it a lower-risk option compared to prime and municipal money market funds offered by Fidelity and other asset managers.
It offers higher yields than a typical savings account
While money market funds are not insured by the FDIC like bank savings accounts, the fidelity investments money market treasury portfolio offers significantly higher yields in most interest rate environments. As of February 2023, the fund offers a 7-day SEC yield of 3.15%, much higher than the average yields on savings accounts and CDs from brick-and-mortar banks. The fund distributes income on a monthly basis, providing a steady stream of interest income for investors parking excess cash there. The higher yields and liquidity make it an attractive option versus traditional bank products for cash reserves.
The fund has a stellar track record and low expense ratio
As one of the pioneers in money market mutual funds, fidelity investments has a long track record of managing these portfolios prudently. The fidelity investments money market treasury portfolio has delivered consistent returns in line with its benchmark over time. The fund charges a very low expense ratio of just 0.42% annually, ensuring more of the returns flow through to investors. The combination of Fidelity’s scale and expertise helps the treasury portfolio keep costs down without sacrificing credit quality or liquidity.
It provides quick access to cash when needed
The fidelity investments money market treasury portfolio offers complete liquidity to investors. It has no redemption fees or withdrawal limits. The fund typically pays out redemption proceeds 1 business day after receiving a request, providing quick access to your cash. This high degree of liquidity makes the fund suitable for short-term cash parking needs, such as accumulating funds for a near-term expenditure. The treasury portfolio can serve as a high-yield, low-risk alternative to traditional savings accounts for short-term cash management needs.
For investors looking for a safe place to park cash they may need access to in the near future, the fidelity investments money market treasury portfolio stands out as an attractive option. By investing exclusively in short-term U.S. Treasuries, the fund provides principal preservation, daily liquidity, higher yields than cash savings, and IRA/401k eligibility in a low-cost vehicle. The fund’s conservative approach, stellar track record, and low fees make it a compelling cash management solution for both retail and institutional investors.