Bruce Bent’s Career in the Money Market Fund Industry of the United States

A money market fund rewards the investor with interests from shares that maintain a net asset value of $1 each, such as the commercial paper or US treasury bills. This investment falls into the category of one of the safest due to its small risks. It is typically short term with high-quality securities, liquidibility, and budgetary tools. The best candidates for this stock are people looking for retirement plans with funding from the employers. They have regulations from Investment Company Act of 194 and are available through banks, mutual funds, repurchase agreements, short-term bonds and brokerage firms. The regulations require the money fund to purchase the highest rated debt which matures in less than 13 months. With the exception of repurchase agreements and government securities, the investment’s portfolio ought to have a weighted average maturity of 60 days maximum and have less than 5 percent of investments.

The first money market fund in the United States, Reserve Fund was set up by Bruce Bent and Henry B.R Brown in 1971. It allowed clients to save cash and earn a small interest return. Bruce Bent change the game for money market funds by enacting regulations that prospective entrepreneurs in the sector picked up. The industry has a current value of $3 trillion and serves tens of millions of clientele due to Bruce Bent’s measures. Reserve Fund earned recognition from Smithsonian Institution for its grand effect on the United States’ money market. Peter Lynch writes about Bruce and Henry in his book, “One Book Up on Wall Street” and cites that the two ought to receive honors with the enactment of a monument.

As stated on Wikipedia, he began his career on Wall Street working as a managing partner at LF Rothschild and Company. After two years, he joined TIAA-CREF. He set up Brown & Bent in 1968 in partnership with Brown. The firm launched Reserve Fund in 1970 to offer clients with a dollar for every dollar they deposited in its account. Reserve Fund managed to garner an impressive number of customers without advertisements or a sales team. After Brown left the firm in 1985, Bruce bought his shares in 1999 and assigned part of the managerial roles to his sons.

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