Published on: 2026-09-17
Source: Moscow Exchange –
An important disclaimer is at the bottom of this article.
Kirill Kashtanov
The number of investors in money market funds on the Moscow Exchange has exceeded 3 million people, increasing 13 times over three years. Among corporations, the number of holders of such shares has grown 22 times over the same period, reaching 1.2 thousand. About why investors are increasingly choosing this instrument, how it works, and whether it is an alternative to deposits, in an interview for the ProDengi project, the “Russian Gazette” explained Director of Money Market Development at the Moscow Exchange Dmitry Danilenko.
What are money market funds?
Dmitry Danilenko: Money market funds are a type of investment instrument in the form of mutual funds that invest money in the money market (mutual funds – a portfolio of a specific set of assets controlled by a management company (MC). A security confirming an investor’s share in the property of a mutual fund, called an investment unit, – editor’s note ProDengi).
The collective investment market features various funds named after the primary type of assets they invest in: bond funds, equity funds, precious metals funds.
You mentioned investments in the money market. What is it about?
Dmitry Danilenko: Money market funds invest funds in the money market, where major market participants and their clients place and attract money at interest. Usually, such transactions are concluded for a short term—from one day to one year.
Every day on the Moscow Exchange’s money market, banks, corporations, and financial companies collectively execute deals averaging 7 trillion rubles. These are mostly repo transactions, the economic purpose of which is lending money secured by securities. In other words, an investor lends money for a certain period at an interest rate, and the borrower provides securities as collateral for that time. Thus, the investor gains additional protection against credit risk.
I have often noticed how banks have started actively promoting funds in their apps. Why?
Dmitry Danilenko: The first money market funds appeared in the last five to six years. Their popularity sharply increased with the rise of the key interest rate. For banks, money market funds are a convenient way to expand client options and offer them a competitive product with potentially higher expected returns than other instruments.
Competition for investors among management companies and brokers is only increasing. This competition leads to lower rates and improved customer service. As a result, the entry threshold for such funds (that is, the cost of one share – ed.) is currently extremely low and starts from two rubles.
Do many people invest in such funds?
Dmitry Danilenko: Over three years, the volume of investments in money market funds has increased 48 times, reaching more than 2.5 trillion rubles. The number of investors who purchased these instruments on the Moscow Exchange exceeded 3 million people, increasing 13 times over the same period. Private investors earned 525 billion rubles from money market funds over three years.
Why is the popularity of money market funds increasing?
Dmitry Danilenko: In recent years, investors have become more attentive to the liquidity of their portfolios, opting for the possibility of quick access to their funds and effective liquidity management.
At high interest rates, the yield of funds becomes more attractive, which has also led to increased interest. Besides that, money market funds are one of the most understandable, simple, and relatively conservative market instruments. We see great potential for their further development as well.
For example, currently private investors’ investments in these instruments account for only about 3-4% of the entire retail deposit base in the banking sector. As the products and the collective investment industry continue to develop, investor awareness of money market funds increases, and positive investment experience accumulates, money market funds may pose significant competition to traditional bank deposits.
How is the yield of money market funds formed? What does it depend on?
Dmitry Danilenko: Interest rates on transactions depend on the supply and demand for money on any given day. The higher the demand from participants for money, the higher the rates. If the supply of money exceeds demand, interest rates decrease. But usually, the yield hovers around the Bank of Russia’s key rate: sometimes slightly lower, sometimes higher – depending on the market situation on each particular day.
Money market fund management companies daily place investors’ funds in repo transactions with the Central Bank and earn yields close to the key rate. They also reinvest previously earned interest by investing it in the money market, creating an additional compound interest effect from the reinvestment of accumulated interest for their clients.
How much does the yield of such funds correlate with the key interest rate?
Dmitry Danilenko: This can be seen on the comparison chart of the RUSFAR index, which reflects the fair value of secured money in the Russian market and represents the weighted average rate on money market transactions, calculated by the Moscow Exchange, and the key rate of the Bank of Russia.
One of the main advantages of ruble money market funds is the predictable yield, close to the key rate of the Bank of Russia. It does not depend on changes in the value of the underlying asset, unlike, for example, equity or bond funds, whose prices can sometimes fall and be subject to high market volatility. Therefore, money market funds are often called “evergreen instruments.”
Are money market funds an alternative to a bank deposit?
Dmitry Danilenko: Private investors use money market funds in different ways. Many place funds in them for the long term, using them as an analogue to a bank deposit but with more flexible terms. After all, money market funds can be bought and sold on any trading day on the exchange without losing the accumulated yield.
Some of the more active investors use funds to “park” money in them for short periods while waiting for the right moment to enter other investment ideas.
Moreover, investors often use the money market as a stabilizing part of their investment portfolio, preferring a conservative instrument for diversification and risk reduction.
Is it necessary to pay taxes when investing in funds? Are there any fees, and if so, which ones?
Dmitry Danilenko: Since money market fund shares are securities, they are subject to the tax features and preferences that apply to securities.
Profit from transactions with shares is subject to personal income tax, but tax benefits apply if the securities are held for more than three years. In addition, investors can purchase shares through individual investment accounts (IIS) and use tax deductions.
What should be considered when choosing a money market fund?
Dmitry Danilenko: Currently, there are 27 money market funds (interval and open-end mutual funds) from 16 management companies. They all use a similar investment strategy – investing in repo transactions on the Moscow Exchange money market. Therefore, the returns of such funds are generally similar. When choosing funds, investors should consider management fees as well as brokerage tariffs, which may vary depending on the fund.
For which investor are money market funds suitable?
Dmitry Danilenko: Money market funds suit investors with different levels of risk and investment horizons. Among those who buy shares of such funds are not only beginner investors but also experienced market professionals.
Money market funds are predominantly invested in by individuals; however, we are seeing growing interest from companies in the real sector of the economy as well. In particular, the number of legal entities that invested in money market funds has increased 22 times over three years, reaching 1,200 companies. Link
Please note; This information is raw content obtained directly from the source of information. It is an accurate report of what the source claims and does not necessarily reflect the position of MIL-OSI or its clients.