One in particular, the Royal London Short Term Money Market fund has been one of the most-bought funds for every month this year. So what are money market funds? Well, they’re effectively a cash savings account that you can own in an investment wrapper. So your General Investment Account, your ISA, or your SIP, and you’re paying a normally very low fee, can be 0.1% a year for a professional fund manager to deliver a cash like return for you.

Bull points

Returns around the current bank rate.

Tax free if held inside a tax free account.

Income either paid Monthly or an Accumulation unit available.

Bear points

Being a Unit Trust it only trades at noon, so a small wait for funds to be credited to your account.

When interest rates fall so will the money market returns, so one option if you think rates are going to fall is to lock in the rate with a Gilt purchase.

If held outside a tax free wrapper, easiest if the monthly income option is bought as there is a rather convoluted tax calculation for the accumulation unit.