WSJ "Money Funds Again Take On Risk"
Today's Wall Street Journal writes "Money Funds Again Take On Risk: Low Supply Causes More Boldness" saying, "Faced with a dearth of high-quality, short-term liquid investments in which to invest and low yields, some money funds are moving into longer-duration instruments, boosting their risk. It's a notable reversal as many money-market funds had shifted to shorter-term investments in the grip of last year's panic." The piece echoes a Crane Data News article ("Wells Fargo Talks Supply, ABCP, Support Programs in PM Commentary") and quotes Peter Crane, "The pendulum has never swung so quickly from greed to fear and back again." It adds, "Average maturities for money funds came down last fall, although perhaps not as dramatically as some would have expected, after the industry was shaken by a fund that failed to keep its dollar par value. The average weighted maturity of the 100 largest money-market funds was 47 days in August 2008, then dipped to 43 days for two months, according to Crane. By February it was back up to pre-crisis levels and, currently, the weighted average maturity of the 100 largest money-market funds is 52 days. That's the highest since April 2006, when Crane began tracking it, he said." The article also quotes Wells Fargo's David Sylvester, Goldman Sachs' Dave Fishman, and Federated's Debbie Cunningham.
