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A short-term investment fund (STIF) is a pooled investment vehicle that primarily invests in short-term, low-risk instruments such as Treasury bills, commercial paper, and certificates of deposit. These funds aim to provide liquidity, capital preservation, and modest returns with minimal risk. STIFs are commonly used by institutional investors, such as pension funds or corporate treasuries, to park cash temporarily while maintaining quick access to their funds.
A corporate treasury department may invest in a short-term investment fund to safely store excess cash for a few months while earning a small return before deploying the capital elsewhere.
• Pooled investment vehicle focusing on short-term, low-risk assets.
• Provides liquidity and capital preservation.
• Often used by institutional investors for cash management.
They provide a safe place to store excess cash while earning modest returns and maintaining liquidity.
These funds usually invest in short-term instruments like Treasury bills, commercial paper, and certificates of deposit.
Both are low-risk, but STIFs may offer slightly lower returns due to their focus on ultra-short-term investments.
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