Cash is king in 1994.

That means the low-profile money-market fund, a leader in the world of short-term liquid "cash" investments, aims to reclaim its throne.Investment strategists worried about the stock and bond markets have been gradually boosting the cash portion of their model portfolios. While the cautious 40 percent position recommended by Prudential Securities is extreme, 25 percent is common.

With $600 billion in assets, money-market funds are a growing force. As interest rates moved up in the past year, the number of available money-market funds increased by 36 to total 632.

Still, they long ago surrendered the dominance they enjoyed in the early 1980s, when returns had shot beyond 20 percent. Despite recent increases, today's yields remain modest. It's likely only disasters in financial markets or a dramatic rise in rates could ignite money-market frenzy again.

Since these growing money-market funds aren't supposed to lose money, the Securities and Exchange Commission wants to make sure they don't. It recently ordered portfolio managers to weed speculative derivative securities out of their holdings.

That was prompted by Bank of America having to bail out two of its money-market funds in order to maintain their stable net asset value of $1 a share. Losses from risky derivative plays, especially so-called "range floaters" securities that don't pay interest if rates move beyond a certain range, threatened to slice investor asset value.

"If money-market funds were to breach the $1 a share rule, it would breach their trust level to a tremendous degree," observed John Markese, president of the 175,000-member American Association of Individual Investors based in Chicago. "But their asset quality and maturity are being carefully regulated by the SEC."

This "parking lot" is, after all, supposed to reduce portfolio risk and provide liquidity.

"No one's lost money in a modern money-market fund, and Bank of America pumped $69 million into those institutional money-market funds to make sure that remained the case," noted fund-tracker Bill Donoghue, publisher of Donoghue's Moneyletter in Ashland, Mass. "The SEC and the funds' independent directors maintain necessary pressure on funds."

Convenience, services and placement of other investments play roles in selecting a money-market. Though no yields are high-flying, there are differences.

Top-performing taxable money-market funds over the past year, according to Donoghue's Moneyletter, were:

- Olde Premium Plus Money Market Series, Detroit; $275 million in assets; $25,000 minimum; recent rate 4.54 percent; one-year return of 3.57 percent.

- Aetna Money Market Fund, Hartford, Conn.; $183 million in assets; $1,000 minimum; recent rate 4.28 percent; one-year return of 3.52 percent.

- Dreyfus Basic Money Market Fund, New York; $1.6 billion in assets; $25,000 minimum; recent rate 4.29 percent; one-year return of 3.50 percent.

- Jackson National Money Market Fund, Lansing, Mich.; $7.8 million in assets; $1,000 minimum; recent rate 4.53 percent; one-year return of 3.46 percent.

- United Services Government Securities Savings Fund, San Antonio, Texas; $626 million in assets; $1,000 minimum; recent rate 4 percent; one-year return of 3.40 percent.

"We've seen assets grow 40 percent this year as individuals watched short-term rates rise a bit and also got concerned about investment safety," said Christian Thwaites, a vice president with Aetna, whose fund invests in commercial paper, corporate notes and some government securities. "We dropped our average maturity to a short 38 days the end of the first quarter, which helped the return as rates rose."

Best returns in tax-exempt money-market funds available nationally were:

- Dreyfus Basic Municipal Money Market Fund, New York; $985 million in assets; $25,000 minimum; recent rate 2.76 percent; one-year return of 2.53 percent.

- Strong Municipal Money Market Fund, Milwaukee, Wis.; $1.4 billion in assets; $2,500 minimum; recent rate 2.52 percent; one-year return of 2.52 percent.