Education hub

A money market fund (MMF) is a type of mutual fund that invests in cash, cash equivalents and short-term debt securities. Think of MMFs as a cash management investment solution intended to offer portfolio diversification, liquidity and operational ease.

Every day investors evaluate fixed income, equity and alternative investment strategies for their portfolios. In addition to these strategies, we encourage investors to take a holistic approach to their cash and short duration investments.

With expectations of central banks lowering rates this year, we see an opportunity for investors to actively manage their operational, core and strategic cash balances in an environment still rife with economic risks and uncertainty.

After a sustained period of rising interest rates, we've reached a juncture where rates are at their peak, often referred to as “Terminal Rates.” This, combined with events in the first quarter of 2023, further reinforces the value of diversification in cash investing.

This document provides information about the way in which the funds in BlackRock Liquidity Funds (the “Trust”) are held.

Cash remains attractive amid a potential shift in rates. Money market funds will typically position their duration a little longer heading into a rate cut environment and will tend to outperform alternatives for overnight liquidity as a result.

The repurchase agreement (repo) market is one of the largest and most actively traded sectors in the short-term credit markets and is an important source of liquidity for money market funds (MMFs).

Unlike commingled mutual funds, separately managed accounts are segregated mandates comprised solely of one client’s assets. The investment strategy of the account is driven by the specific objectives and risk tolerances of the account owner, often dictated by their investment guidelines.

Variable Rate Demand Notes (VRDNs) are a critical asset class in the short term municipal market, representing the majority of the securities that comprise municipal money market funds in the U.S.

Neutral rates are defined as the level that neither encourages nor deters overall economy activity in a particular country.