F206. Money Market Fund Shares

Federal Reserve definition for F206 flow of funds table

Money market mutual fund shares are 'obligations' issued by money market mutual funds, which are open-end investment companies that invest in short-term, liquid assets, including short-term municipal securities.

The funds began operating in the 1970s and quickly became popular with investors as a higher-earning alternative to deposits.

The shares may be redeemed at any time, although funds usually require that a minimum balance be retained in each account.

Money market mutual fund shares may be used in carrying out transactions — the funds often allow shareholders to write checks against individual account balances — and the value of retail, or individual investor, money market mutual fund shares is included in the M2 monetary aggregate; the value of all such shares is included in the M3 aggregate (the monetary aggregates are measures of the national money supply published by the Federal Reserve System).

Holdings of the households and nonprofit organizations sector are the residual after the holdings of all other sectors have been subtracted from the total share value.

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