Like many in 2003-2004, the Financial Times confuses the remote possibility of a money fund "breaking the buck" with the potential for negative yields due to sub-one percent yields in Treasury money market funds in its article, "Money market funds face new pressure". The FT evidently doesn't realize that money market prices (like bond prices) go up when yields go down. The piece says, "With short-dated Treasury yields falling to less than 1 per cent, there is increasingly little room for managers to manoeuvre. Further pressure on the razor-thin margin of yield means funds would come perilously close to offering no return at all, or even allowing investors' money to fall below its value." However, to correct FT, fund yields and NAVs are separate issues. There is a theoretical chance of a negative yield, where a fund would charge investors instead of paying. But we're still nowhere near the lows of 2003-4 (when no fund yields went negative), and the NAV would still be $1.00. So no funds would "break the buck".

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