Cash Management Trust (CMT) - A
pooled investment vehicle for investors who would
not individually have access to the professional money
market. By pooling funds from various sources, larger
volumes of higher yielding short-dated securities
can be purchased and the resulting higher returns
can then be returned to the trust members. CMTs generally
restrict themselves to negotiable instruments of a
duration of no longer than six months. As these securities
are highly liquid, a CMT can accommodate cash flows,
both in and out, on a daily basis, thereby offering
small investors a flexibility not present in a traditional
fixed rate term deposit.
