Mapfre AM Eurocash, or how to generate returns with money market funds

How long will this tense calm reigning over the markets last? This question is on every investor’s mind, and for now, there seems to be no clear answer.

The uncertainty and volatility triggered by geopolitical conflicts remain ever-present. Moreover, U.S. President Donald Trump recently announced a new across-the-board 10% tariff to replace those struck down by the Supreme Court. Yet barely 24 hours later, Trump himself raised this tariff to 15%, a move that added even further confusion.

Faced with this situation, it’s only natural that more conservative investors seek “refuge” in more stable investment vehicles. Among these are money market funds, which have emerged as a clear alternative to deposits, Treasury bills, and checking accounts, while offering daily liquidity, diversification, and security.

Why are investment funds interesting right now?

Money market funds regain prominence when short-term interest rates rise, as they offer exposure to very short-duration fixed-income instruments and thus benefit from the yields offered by money markets without taking on the volatility of long-term fixed income.

They are also a natural tool for managing liquidity because they combine immediate availability with a capital preservation policy.

In a scenario where the returns on deposits and Treasury bills are improving, money market funds act as a flexible bridge between bank liquidity and somewhat more profitable alternatives.

Likewise, money market funds are a particularly practical alternative when an investor has divested from an asset and has not yet determined their next move. During this interval, allocating the proceeds to a money market fund allows for preserving liquidity, taking the necessary time to analyze new opportunities, and simultaneously preventing the money from sitting idle in a checking account without generating returns.

What are the main advantages of money market funds?

• High liquidity: Most allow redemptions with immediate availability.
• Low volatility and capital preservation: They invest in short-maturity, high-credit-quality assets, which reduces the risk of price fluctuations.
• Short portfolio duration: The average duration is typically kept low, limiting exposure to sharp interest rate movements.
• Diversification relative to deposits or treasury bills: By investing in a basket of instruments (Treasury bills, short-term corporate debt, repos, etc.), they offer internal diversification that does not exist in an individual bank account.
• Alternative to deposits and treasury bills: When rates rise, money market funds can offer returns comparable to or higher than deposits or checking accounts, with the added benefit of active management.

These characteristics make money market funds a particularly attractive product for conservative profiles who value both security and efficiency in cash utilization.

And the drawbacks?

• Limited returns: They typically offer lower returns than other alternatives, such as medium-term fixed income or certain bank deposits with attractive promotional rates.
• Inflation risk: If the increase in prices exceeds the return obtained, the investor may see their purchasing power reduced.
• Not risk-free: Although they are considered very conservative products, they maintain exposure, albeit limited, to market, credit, and liquidity risks, something that is important to keep in mind whenever investing.

Mapfre AM EUROCASH: A key money market fund for investors

In this spirit, and with the goal of capitalizing on the favorable moment these vehicles are experiencing, Mapfre AM has launched its first money market fund, Mapfre AM EUROCASH. It is designed precisely to offer a liquidity management solution adapted to the current environment.

Álvaro Anguita, CEO of Mapfre AM, noted that the fund seeks to provide “a safe and efficient solution for managing liquidity” in a volatile environment, thereby underscoring the strategic role of this type of product for conservative investors.

The fund, domiciled in Luxembourg, offers an alternative to deposits and Treasury bills, with daily liquidity and a focus on capital preservation. Mapfre AM EUROCASH offers a return that will depend on the evolution of short-term interest rates in the eurozone.

How will it achieve this? By investing in euro-denominated fixed-income instruments (both government and corporate debt) and limiting portfolio duration to maintain low sensitivity to interest rates; the duration will not exceed six months, and the maximum average maturity is set at one year.

Mapfre AM EUROCASH also carries a risk level rated as 1 out of 7 (the minimum according to CNMV criteria), positioning it as an ideal vehicle for conservative investors seeking to earn a return on their liquidity without taking on unnecessary risks.

Management is active and aims to adapt the fund's composition to market conditions, taking advantage of short-term opportunities without compromising the objective of safety.