MutualFundWire from Schwab IMPACT
The MutualFundWire.com writes from Schwab IMPACT on "The Future of Money Funds" panel. See also, WSJ's "Money Funds Prepare For Guarantee's End", James Stewart's "A Year Later, How Safe Is Safe?", and WSJ's "Lehman's Demise Hit Repo Market With A Lag". The first WSJ story quotes Peter Crane, president of Crane Data LLC, which tracks money-market fund assets. "It's as if a tsunami went through, and then washed out so fast that it did damage to the population, but all the structures and such dried out so fast that, amazingly, it may end up that we go back to where we were before September 2008." The article continues, "Money-market funds held about $3.58 trillion in assets just before the Reserve news hit and dipped to $3.46 trillion late last September before investors regained their composure, according to the Investment Company Institute. Assets in the funds had surged to $3.9 trillion by March of this year and have now slipped back to about $3.5 trillion, according to the ICI. The Securities and Exchange Commission proposed reforms for money-market funds in early July. Some had hoped those would be in place before the guarantee program expired, but that's highly unlikely. Crane notes that, through other government programs, about 80% of the securities money-market funds invest in are supported until Feb. 2, 2010. Looking ahead, Crane said money-market fund yields will be reduced by anywhere from two to three basis points to 20 to 30 basis points, likely in the five- to 10- basis-points range."
