Money Markets
Money Markets may be broadly defined as a framework within which large financial institutions fulfill their short term monetary needs by trading in fixed income securities such as government bonds, corporate bonds, fixed deposits etc.
Such instruments bear lesser risk as compared to investments in equities and pose no liquidity constraints.
Given that most money market trades take place in large denominations retail investors cannot directly participate in the same, however mutual funds in India have begun to offer schemes that invest in money market instruments, these may be employed by retail investors with equity heavy portfolios for the purpose of diversification.
Tags: Daily Funda