MarketWatch writes "Money-market funds may reclaim waived fees". The story says, "With interest rates at historic lows, the money-market mutual fund industry has lost hundreds of millions of dollars in waived fees. But some of these funds are likely to want that money back. Many money-market funds have been waiving almost all fees since late 2008 because interest rates, and thus the funds' yields, have been so low that fee charges would have caused losses for shareholders.... But investors might not realize that the funds can raise their fees to reclaim lost revenues. And because of language inserted into fund documents, investors wouldn't receive notification of any attempts to recoup waived fees." The article continues, "Charles Schwab Corp. for instance, said because of fee waivers it lost about $224 million of income in calendar year 2009, and the firm estimates lost income in the first quarter of 2010 of about $125 million. Bank of New York Mellon Corp. is on track this fiscal year to lose more than $190 million in income, while Federated Investors Inc. could suffer lost income of nearly $45 million, according to estimates by analyst Rob Lee of Keefe Bruyette & Woods. Once rates rise, most firms will take steps to claw back these waived fees, Lee predicted." Lee wrote in a research note, "Our analysis suggests that virtually all the asset managers are poised to recapture most, if not all, of their money fund fee waivers following an increase in short-term rates, even if they suffer some incremental outflows." See also, The Arizona Republic's "Possible change to funds stirs worries".
