Money market funds are a type of mutual fund that conservatively invests in short-term debt securities. They are designed to offer better returns than savings accounts while not taking on the risk and volatility of assets such as stocks. The primary things they are invested in includes US Treasury bill and commercial paper.
Money market funds were invented in 1971 by two financial industry veterans. They named their fund the Reserve Fund. Their fund was used by people and corporations who were primarily interested in preserving their wealth by investing safe assets that paid more than a basic savings account did. Eventually, with the success of money market funds, mutual funds overall started to be used more and more by people who wanted to limit their risk and increase their diversity by investing in as many companies as possible vs. investing in just one or a few companies.
Money market funds are regulated by the US Securities and Exchange Commission. They must follow strict rules in order to assure their safety. Among these rules is that no more than 5% of the money market fund can be invested in any one issuer with the sole exception of US Treasuries. They must also only buy debt that matures in less than 13 months. Another rule is that the weighted average maturity of their investments has to be less than 60 days.
Just like his father, Bruce Bent II is also in the financial industry. He is the CEO of Double Rock Corporation, one of the world’s largest providers of money market funds. He has been with Double Rock since 1991 and has also earned the positions of Vice Chairman of the Board and President.
As an entrepreneur, Bruce Bent II has innovated in the financial sector. He has created over 50 financial patents that he has used to create various types of funds at his company. Additionally, he also founded another financial company called B2 Consulting LLC where he offers his advice to other companies who need his experience to successfully navigate the financial marketplace.