The Development Of Money Market Funds

The money market fund has rapidly changed the former mode of the American mutual fund trade , since its appearance in 1970's . Before 1970's it was the stock market fund that dominated the American mutual fund market. But in the 10 to 20 years that followed , the money market fund developed very quickly . In 1980 , the number of the money market fund had reached 106 , and rose up to 959 in 1990 , the climax in its history , accounting for 24.1% of the total amount of the US mutual funds . While at the beginning of the twenty-first century , the boom of the money market fund has been held down, but still retained the level.From December 2003 , when China issued its the first money market fund -Hua An Cash Fu Li .On 12th May , Zhong Yin International MMF was sold through the Bank of China in China publicly . It meat that the first MMF of Banking appeared . Except the Bank of China , Zhong Yin International MMF would be sold by Industrial and Commercial Bank of China on 18th May . To March 2006 , China had issued over thirty money market funds ,and achieved excellent achievements . A variety of signs show that the development of China's money market funds is in the ascendant . The MMF of China was in the stage of developing .In the step it is important for the development and soundness of the market itself. The government should try its best to avoid to interfering with the development of the MMF ,and make a moderately loose space for it .On the other hand , drawing lessons of the advanced strategy of investment and experience of management from abroad , the government should cultivate some fund companies with good credit and enough capital which will impetus the rapid and healthy development of the whole MMF market.This paper attempts to conduct the studies on the money market fund from the followings five parts :Part One introduces the reason why selecting this subject as topic and some documents about the MMF . Part Two gives a general account of MMF, including the investment objects , risk, the different types of MMF and the characteristics .Part Three firstly reviews the occurrence and the development of MMF of China since 2003 , and analyses the characteristics of it .Secondly it analyses the main reasons that restrain the developing of MMF in China .including the low efficiency of the money market ,the institution and level of settlement of money market needs to improve ,and it exists risk in the money market itself. Thirdly it deems that there is possibility to develop MMF in China in mathematic way.Part Four reviews the development of MMF in USA, and the inspiration to the development of MMF in China from it.Part Five introduces the suggestion about developing MMF in China . It takes three aspects into consideration , firstly it should consummate the money market of China including constructing the objects and subjects of money market , consummating the regulations of operation , enhancing the construction and development of the second-class money market; secondly it should encourage the commercial banks to participate in the issue of MMF , impetus the development of MMF.