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 |
What You Need to Know
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.
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 |