Money Fund Comeback

Physician's Money Digest, February28 2005, Volume 12, Issue 4

Tip:

At least one group of investors ishappy about the Federal Reserve's driveto bump up interest rates—those whohave substantial amounts in moneymarket funds. In the recent ultra-lowinterest rate environment, money fundswere yielding an anemic 0.50%, whichdidn't even match the inflation rate.Now, as short-term interest rates havegone up, money market yields havemoved up too, with the average yield ona taxable money market fund hitting amore respectable 1.67% in January.Market watchers expect yields to continuetheir advance, in lockstep withany fed moves to ratchet up interestrates. Picking funds with lowexpense ratios can boost your yield. Fora list of the highest-yielding moneyfunds, visit www.imoneynet.com.