Is there any kind of mutual funds which can never have a loss, like maybe a currency fund?
asked Jun 24, 2020 at 14:01
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1 Answer
Money market funds are mutual funds that invest in very safe cash, cash equivalents, and short-term debt. Although it is possible for a money market fund to lose value (“breaking the buck”), it is very rare for these funds to do so.
Of course, the trade off is that money market funds also have an extremely low rate of return. For example, the Vanguard Prime Money Market Fund (VMMXX) currently has a 10-year average annual return of 0.63%.
If you are looking for an investment that is guaranteed by the government never to lose money, you’ll need to be in an FDIC-insured bank account, with even lower rates of return.
answered Jun 24, 2020 at 14:10
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2US Treasury Bills would be another option here... Does not make a lot of money, but if they lose value because the US gov't has failed, well, then there are probably bigger things to worry about than the loss of some money. treasurydirect.gov/indiv/products/products.htm and if OP is insistent on buying mutual funds, there are fund that are made up almost wholly of US Treasury Bills. money.usnews.com/funds/mutual-funds/rankings/long-government Commented Jun 24, 2020 at 14:51
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3@R.Hamilton treasurys have virtually no credit risk but they can still lose market value due to rising rates or lower demand Commented Jun 24, 2020 at 17:38
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There are FDIC insured savings account that are currently at 1.35% and were much better than that the past couple of years before the Fed started to drop rates. Doesn't help if the funds are in an IRA but worth mentioning as these accounts easily beat the 0.63% rate you quoted. Commented Jun 27, 2020 at 1:40
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@0xFEE1DEAD Unless you bought the bond on the market, I don't think you really need to care about the market value.– chepnerCommented Oct 13, 2020 at 19:20