WSJ's "Low Yields Dog Money Funds"
The Wall Street Journal writes "Low Yields Dog Money Funds as Guarantee Is Set to Expire". It says, "The government guarantee for money-market fund investors expires Friday, but plenty of worries remain for the industry. Fund managers complain of rock-bottom yields that are pinching profits and regulatory uncertainty. Moreover, the end of the guarantee program may spur investors to switch funds. A year ago, the federal government was forced to step in after Reserve Primary Fund 'broke the buck,' or dipped below the $1-per-share level typically maintained by these funds, sparking withdrawals. The government stabilized the situation by guaranteeing shareholder balances in participating funds as of Sept. 19, 2008." The Journal adds, "Until now, some investors may have been reluctant to sell participating money funds because they didn't want to lose the guarantee, said Peter Crane, president of Crane Data, which tracks the money markets. While some funds are keeping extra cash on hand this week to handle any increase in redemptions, many managers said they are largely unconcerned about the guarantee's expiration." See also, USA Today's "Money market mutual funds remain at risk of 'breaking the buck'".
