This weekend's Wall Street Journal writes "Euro Pain Hits Money Funds". It says, "The European debt crisis has rippled into one of the last redoubts of safety for U.S. investors: money-market funds. Money funds are thought to be low-risk because they invest in high-quality short-term debt issued by governments and big corporations. But many funds are holding big slugs of European bank debt. As of March 31, nine of the top 10 corporate issuers of short-term debt held by Moody's-rated U.S. prime money funds were big European firms. Yet that doesn't mean investors in money funds should rush for the exits, say analysts. Some funds are trimming their European holdings and changing the types of securities they buy in an effort to make their portfolios safer. Meanwhile, there might even be a silver lining from the crisis: improved yields." The article adds, "So far, investors haven't panicked. The funds attracted inflows in the week ended May 25, according to iMoneyNet. Inflows are 'a reassuring occurrence, because they're not forced to sell anything,' says Peter Crane, president of Crane Data LLC, which tracks the funds. The European debt crisis may even have a silver lining: It has prompted upticks in the London interbank offered rate, or Libor. Increases in Libor, a rate that banks charge one another to borrow, help push up money-fund yields, which lately have been close to zero. The 100 largest taxable money funds now have an average yield of 0.07%, up from 0.04% in January, according to Crane Data." In other news, see also, Investment News' "Advisers make a mad dash for cash", Boston Herald's "Money funds not worth owning", and Fidelity Investments' "Seeking Higher Yields?".

Email This Article




Use a comma or a semicolon to separate

captcha image

Daily Link Archive

2024 2023 2022
March December December
February November November
January October October
September September
August August
July July
June June
May May
April April
March March
February February
January January
2021 2020 2019
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2018 2017 2016
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2015 2014 2013
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2012 2011 2010
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2009 2008 2007
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2006
December
November
October
September