Money Market Funds: What You Need to Know Today

Timely money market insights and resources to keep you informed during these unprecedented times.

Fidelity is one of the largest and most trusted money market mutual fund providers in the industry. Our money market funds invest in high-quality money market securities and seek to provide safety, liquidity, and competitive returns for our customers.

"We can state unequivocally that the number one goal of Fidelity's money market funds and accounts is to provide security and safety for our customers' cash investments."
Money Market and the Low Rate Environment Webinar

March 17, 2020

Kevin Gaffney, Chief Investment Officer, Money Markets

Types of Money Market Funds

Fund Type Net Asset Value (NAV) Liquidity Fee Redemption Gate
U.S. Treasury* Stable No No
Government* Stable No No
Retail Municipal/Tax Exempt^ Stable Yes Yes
Retail Prime^ Stable Yes Yes
Institutional Municipal/Tax Exempt** Floating Yes Yes
Institutional Prime** Floating Yes Yes
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What You Need to Know Today

Federal Reserve Actions

The Federal Reserve has implemented a number of actions to alleviate stress in the financial markets and to support the broader economy.

  • Lowered the target range to 0.00% to 0.25% on March 15, 2020
  • Increased U.S. Treasury securities holdings by $500 billion
  • Increased agency mortgage-backed securities holdings by $200 billion
  • Lowered the rate for banks to borrow at the discount window to 0.25%
  • Introduced or enhanced facilities in reaction to the financial impact of the coronavirus pandemic
  • Commercial Paper Funding Facility (CPFF) was created by the Federal Reserve Board during the financial crisis of 2008 to improve liquidity in the short-term funding markets and reauthorized in March 2020.
  • Primary Dealer Credit Facility (PDCF) was created in March of 2008 in response to the severe strains in the tri-party repurchase agreement market and the resulting liquidity pressures faced by primary dealers and was reintroduced in March 2020.
  • Money Market Mutual Fund Liquidity Facility (MMLF) provides funding to U.S. financial institutions to finance purchases of high-quality assets from prime and municipal money market mutual funds under certain conditions.
  • The Primary Market Corporate Credit Facility (PMCCF) will serve as a funding backstop for corporate debt issued by eligible issuers.
  • Secondary Market Corporate Credit Facility (SMCCF) will serve to provide liquidity for outstanding corporate bonds.
  • Term Asset-Backed Securities Loan Facility (TALF) will serve as a funding backstop to facilitate the issuance of eligible ABS on or after March 23, 2020.
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Fidelity Money Market Fund Low Yields and Fee Waivers

  • Yields on money market mutual funds tend to follow short-term rates set by the Federal Reserve, although typically with a lag, which means that following a Fed rate cut yields on money market mutual funds will trend lower.
  • At Fidelity, we are closely monitoring the yields on our money market mutual funds. If they approach zero, we may consider waiving certain fund fees to help ensure a positive yield. Any such waiver would be voluntary and could be discontinued at any time. There is no guarantee that a fund will be able to avoid a negative yield.
As of March 19, 2020, Fidelity waived certain fees on the following funds
Fund Name Class Fund # Ticker
Fidelity Treasury Money Market Fund Daily Money Class 58 FDUXX
Capital Reserves Class 77 FSRXX
Advisor Class C 529 FDCXX
Fidelity Government Money Market Fund Daily Money Class 2740 FZBXX
Capital Reserves Class 2739 FZAXX
Advisors Class M 3018 FZGXX
FIMM Treasury Portfolio Class IV 2016 FTVXX
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  • In order to avoid a negative yield, FMR may reimburse expenses or waive fees of certain funds and/or the funds' distributors may waive all or a portion of the 12b-1 fees. Any such waivers or expense reimbursements would be voluntary and could be discontinued at any time. There is no guarantee that these funds will be able to avoid a negative yield.
  • * You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund's sponsor, have no legal obligation to provide financial support to any Fidelity money market fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
  • Fidelity's government and U.S. Treasury money market funds will not impose a fee upon the sale of your shares, nor temporarily suspend your ability to sell shares if the fund's weekly liquid assets fall below 30% of its total assets because of market conditions or other factors.
  • ^ You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund's sponsor, have no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
  • ** You could lose money by investing in a money market fund. Because the share price of the fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund's sponsor, have no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
  • Before investing have your client consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or a summary prospectus, if available, containing this information. Have your client read it carefully.
 
 

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