Short-term fund

Short-term fund

Lending to firms for one to three years is done via short-term debt funds. These funds normally only invest in trustworthy companies with a track record of promptly repaying loans and sufficient operating cash flow to support loan payback. 

What is a short-term fund? 

Marketable assets, transitory expenditures, and other similar terms all refer to monetary investments which can be quickly transformed into cash, usually within five years. 

A lot of short-term stakes are liquidated or turned into cash in just a few years. Bonds issued by the government, bills from the Treasury, money markets, certificates of deposit, and accounts with high yields are a few typical examples of investments for the future. The property or vehicles for investment used in these sorts of investments are typically of excellent quality and liquidity. 

Considering a few more qualifications, the term “short-term investments” can also refer to corporate-owned financial holdings. In this sense, short-term loans are expenditures a firm has made that are anticipated to be repaid within a short period of time and are documented in an independent account and included in the present-day liabilities area of the business balance sheet. 

Understanding short-term funds 

  • Securities with marketability, commonly referred to as investment options or investments for a short period of time, are monetary investments which can be quickly transformed into cash, usually within five years. 
  • The assets a business holds but plans to dispose of within a year are also referred to as investment portfolios. 
  • CDs, money-market funds, high-yielding deposits, sovereign bonds, and Treasury securities are typical examples of investments for brief periods. 
  • Although short-term investments frequently have a reduced rate of return, they are comparatively adaptable and give investors the ability to move cash quickly if desired. 
  • The earnings report of a business for that period directly reflects any improvements or losses in the worth of its investment portfolio. 

Working on short-term funds 

The objective of a short-term loan is to help businesses as well as for private as well as institutional financiers. Its purpose is to safeguard investment while producing a return akin to that of a US Treasury bill index trust or other comparable reference. 

The short-term capital account is going to show on the financial balance sheet of businesses with ample liquidity. As a consequence, the business is able to put the extra money to work in bonds, stocks, or other investments that yield greater returns than a usual savings account. 

A corporation must meet two fundamental criteria before classifying a wager as temporary. It must initially be diversified, such as shares traded often on a large market or bonds issued by the US.  

Benefits of short-term funds 

The benefits of a portfolio of investors can be grounded by making investments that are short-term. These are extremely volatile investments which provide buyers with the freedom to make money which they may immediately take if required. Even if they normally yield a smaller rate of interest over time than purchasing an index fund. 

  • The profit reports quickly reflect profits from investments made for a short term. 
  • Short-term investments are generally safer choices because they carry less risk. 
  • Investments for a short time can help diversify sources of income, especially in the case of financial turbulence. 

Example of a short-term fund 

Examples of a short-term fund are: 

  • Banks provide certificates of deposit (CD) savings, which lock up money for a predetermined amount of time and often pay higher interest rates. These times often range from a few months to a decade or more. They have a maximum of US$250,000 in FDIC insurance coverage. 
  • Money market accounts, or MMCAs, are FDIC-insured funds that offer higher returns than deposit accounts, although they do need an initial commitment. Note that financial marketplace accounts are different from equity mutual funds, and these cannot be FDIC-insured. 
  • Treasuries include a number of various government-issued securities, including points out, bills, floating-rate states, and Federal Inflation-Protected Instruments.  
  • Bond mutual funds are such funds, which are provided by experienced portfolio managers/investment firms, are preferable for a shorter duration and can provide superior returns with the potential for risk. 

Frequently Asked Questions

  • High-yield savings accounts: Keeping money in a debit card, which normally pays relatively low returns on deposits, is not a good idea. Instead, open a savings account with a high yield with a financial institution or financial institution. Regular interest payments from a financial institution will be made to accounts for savings. 
  • Business bond funds for short-term projects: Large companies issue corporate debt to finance their stakes. They normally pay income at scheduled intervals, possibly monthly or once a year, and are regarded as secure investments. 
  • Money market accounts: A different type of bank funds, such accounts normally pay greater interest rates than ordinary savings accounts but also frequently have higher initial investment requirements. 
  • Cash management accounts: Similar to an umbrella account, a cash administration account lets users deposit funds in a number of short-term assets. 

Short-term financial products include bills from the Treasury, government securities, money-market funds, certificates of deposit, and high-yielding deposit accounts. Although investments for a brief period often provide a reduced rate of the process, they are very liquid and enable buyers the freedom to swiftly transfer funds if necessary. 

Short and long investments employ a method of investing that aims to buy undervalued companies and sell short overvalued ones. Long/short investment aims to supplement conventional long-only investment by profiting from stocks that are both inexpensive and overpriced. 

Open-ended securities with a 15–91 day expiration range are known as short-term bond funds. According to the expiration term of the underpinning tools, these funds‘ time frames change. These kinds of funds focus their investments mostly on excellent, safe assets. 

  • Type of loan: One must first pick what kind of mortgage is required. Then you must provide for collateral instalments for a short-term individual loan. Otherwise, one will need to provide the company’s documents and statements of earnings.  
  • Interest rates: One should evaluate them before applying for an emergency loan. Many financial institutions and other financial institutions provide various interest rates, but they may charge customers more in interest if their credit score is low.  
  • Loan terms: Since borrowers are unwilling to pay ongoing Installments and interest, they opt for short-term financing. They simply request the loan, use the money for their intended use, and finally pay it back within a year, at most. 

    Read the Latest Market Journal

    Weekly Updates 4/3/24 – 8/3/24

    Published on Mar 4, 2024 17 

    This weekly update is designed to help you stay informed and relate economic and company...

    Weekly Updates 26/2/24 – 1/3/24

    Published on Feb 28, 2024 61 

    This weekly update is designed to help you stay informed and relate economic and company...

    All-in-One Guide to Investing in China via ETFs

    Published on Feb 27, 2024 401 

    Start trading on POEMS! Open a free account here! Why China? In the vast landscape...

    Navigating the Post-Inflation Landscape in 2024: Top 10 US Markets Key Events to Look out for

    Published on Feb 23, 2024 419 

    Start trading on POEMS! Open a free account here! In 2023, the United States experienced...

    From Boom to Bust: Lessons from the Barings Bank Collapse

    Published on Feb 23, 2024 62 

    Barings Bank was one of the oldest merchant banks in England with a long history...

    Decoding FX CFD 2.0

    Published on Feb 20, 2024 70 

    This article is aimed at availing information and knowledge essential to intermediate forex traders. It...

    Weekly Updates 19/2/24 – 23/2/24

    Published on Feb 19, 2024 89 

    This weekly update is designed to help you stay informed and relate economic and company...

    Unlock Prosperity with 5 Sure-Fire Financial Instruments!

    Published on Feb 14, 2024 200 

    In Singapore, the concept of guaranteed returns may evoke the spirit of prosperity, reminiscent perhaps...

    Contact us to Open an Account

    Need Assistance? Share your Details and we’ll get back to you


    This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

    An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

    Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

    Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

    The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <> for more information in relation to the dividend distributions.  

    The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

    The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

    This advertisement has not been reviewed by the Monetary Authority of Singapore.  


    Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
    250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
    Tel: (65) 6230 8133 Fax: (65) 65383066