Investment constraints hinder performance yet margin between top and bottom funds is 3.8% over 3 years to May 2001Money markets fails to match peers

Money market funds are able to deliver positive returns year on year but struggle to differentiate from their peers in performance terms. Outperformance relative to the peer group is particularly difficult to find as the number of investment strategies open to cash fund managers is limited by stringent regulations. While money market funds are more immediately affected by changes in interest rates than equity funds, diversity in performance is always going to be less because of the very nature of the underlying assets' volatility. Over three years to end of May 2001, the average mon...