Billionaire hedge fund manager Bill Ackman, known for bold macro calls and running Pershing Square Capital Management, recently weighed in on rising cash levels in the market.
In a post on X (formerly Twitter), Ackman responded to a Barchart update showing a record-breaking $7.4 trillion parked in money market funds by saying simply: “Bullish.”
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The logic behind his optimism is straightforward: Even with U.S. equities hovering near all-time highs, there’s still a massive pool of so-called “dry powder” sitting on the sidelines. Ackman believes that this cash may eventually rotate into risk assets like stocks, especially if interest rates are cut.
But not everyone sees it the same way. The same data point can support a more defensive interpretation. It is also likely that some investors are using money market funds as cash management vehicles due to their relative safety and liquidity.
These funds typically maintain a $1 net asset value, or NAV, per share and invest exclusively in ultra-short-term, high-quality fixed income, such as Treasury bills, repurchase agreements or commercial paper. That makes them a safe haven for capital preservation in uncertain environments.
Another factor behind the surge: attractive yields. Many money market funds are still offering yields above 4%, reflecting prevailing short-term interest rates. That far exceeds the average savings account, giving investors an incentive to move idle cash into these funds for better returns.
Finally, fierce competition among issuers has made these funds more accessible. Charles Schwab, for example, offers multiple money market options with no minimum investment on its investor share classes and expense ratios as low as 0.34%. For institutional investors with $1 million or more, ultra shares offer even lower expenses of just 0.19%.
Whether you see the rise in money market fund assets as bullish, cautious or simply opportunistic, the takeaway is clear: This corner of the fixed-income world has become a hotbed for both yield and capital preservation, even with the rise of competing exchange-traded funds, or ETFs.
Here are five of the best Charles Schwab money market funds to buy today:
| Fund | 7-Day SEC Yield | Expense Ratio |
| Schwab Prime Advantage Money Fund (ticker: SWVXX) | 4.1% | 0.34% |
| Schwab Government Money Fund (SNVXX) | 4.0% | 0.34% |
| Schwab U.S. Treasury Money Fund (SNSXX) | 3.9% | 0.34% |
| Schwab Municipal Money Fund (SWTXX) | 1.8% | 0.34% |
| Schwab California Municipal Money Fund (SWKXX) | 1.4% | 0.34% |
Schwab Prime Advantage Money Fund (SWVXX)
SWVXX is the flagship, all-purpose money market fund in Schwab’s lineup. It falls under the prime money market fund category. This means it’s legally permitted to invest in a wider range of short-term debt instruments, including corporate commercial paper and certificates of deposit rather than limiting itself to just government securities. The trade-off is that prime funds may carry slightly more credit risk.
SWVXX currently offers a seven-day SEC yield of 4.1%, which estimates the fund’s annualized income return based on the average income it paid over the last seven days, assuming earnings are not reinvested. This figure is net of fees, which for SWVXX are 0.34% annually. That yield could be higher, but fees drag it down slightly. For comparison, the institutional share class pays 4.3% due to its lower 0.19% expense ratio.
Schwab Government Money Fund (SNVXX)
“While all money market funds are generally considered low-risk, government money market funds are viewed as the most conservative option,” says Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors. “These funds must keep at least 99.5% of their assets in government securities or related repurchase agreements.” However, their yield potential is slightly lower.
In most market conditions, SNVXX behaves like a slightly lower-yielding version of SWVXX, maintaining the same $1 fixed NAV per share. Its seven-day SEC yield currently sits at 4%, versus SWVXX’s 4.1%, largely due to the stricter investment constraints. However, in the event of a credit crisis, SNVXX would likely be the safer option given its exclusive exposure to high-quality government-backed assets.
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Schwab U.S. Treasury Money Fund (SNSXX)
“For our multifamily office clients, we want a money market fund that is as safe as possible from disruption from pandemics, wars, strikes and other global macro events,” Schulman says. “In these cases, we often look to Treasury money market funds, which are considered flight-to-safety instruments and don’t have the spread-widening risk of corporate or foreign instruments.”
Unlike SNVXX, SNSXX excludes repurchase agreements. These are short-term lending arrangements where one party sells a government security with a promise to buy it back at a slightly higher price. Instead, SNSXX sticks strictly to U.S. Treasurys. That added security, however, comes with a trade-off: SNSXX pays a lower seven-day SEC yield of 3.9% due to the tighter portfolio constraints.
Schwab Municipal Money Fund (SWTXX)
“If tax efficiency is your primary focus, consider investing in a municipal money market fund, where most earnings are typically free from federal taxes,” Schulman says. “These funds generally invest in debt securities from local and state entities, like city hospitals, state colleges, power companies and transit systems, so in addition to receiving tax-advantaged income, you will be doing a social good.”
SWTXX is especially useful for high-income investors who have already maxed out tax-sheltered accounts like a Roth IRA or 401(k). Its 1.8% seven-day SEC yield may look low compared to taxable funds, but that income is exempt from federal income tax. For some investors, this may exceed the net yield received from a taxable prime money market fund like SWVXX, making SWTXX more attractive.
Schwab California Municipal Money Fund (SWKXX)
Most municipal money market funds pay interest that is exempt from federal taxes. But you’ll also find variants that are exempt from state-specific taxes for residents. Schwab caters to this with options for New York and California, and SWKXX corresponds to the latter. The fund holds high-credit-quality, ultra-short-term bonds issued by the state of California and its various municipal agencies.
The seven-day SEC yield is lower at 1.4%, but the correct metric is the tax-equivalent yield. This adjusts SWKXX’s yield to reflect what a taxable fund would need to earn to provide the same after-tax income. It differs based on your tax bracket, but you can find online calculators to run the numbers for your specific situation. Opting for the institutional share class with a minimum $1 million investment will boost yields slightly due to a lower 0.19% expense ratio.
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5 Best Schwab Money Market Funds originally appeared on usnews.com
Update 07/16/25: This story was published at an earlier date and has been updated with new information.
