"Money Funds Come Out of the Shadows" writes Bloomberg BusinessWeek. The article, written by Chris Condon, says, "Investors in U.S. money market mutual funds, whose shares they expect to stay steady at $1, will see something new beginning the week of Jan. 31 -- and it has fund companies nervous. Under rules passed last year, the U.S. Securities and Exchange Commission will disclose, with a 60-day lag, a measure of each fund's worth known as "shadow" net asset value, or shadow NAV. Money funds, unlike other mutual funds, book the value of holdings at the price paid for them. They also round collective holdings to the nearest penny, so even a realized loss of less than half a cent goes unnoticed. Beginning with data for last November, shadow NAVs will show holdings at market prices and to four places past the decimal, revealing fund values typically ranging from $0.9995 to $1.0005." It adds, "To educate consumers, fund companies such as Vanguard and BlackRock put articles on their websites and sent them to customers. Fund trade group Investment Company Institute also released a paper and held a press seminar. Their message: Don't worry -- a shadow NAV slightly above or below $1 is normal. According to [iMoneyNet's Mike] Krasner and Peter Crane, president of money fund research firm Crane Data, companies are right in most cases to tell investors not to fret." "Anything below $0.999 will be an outlier," Crane says.
