The Financial Times continues its negative barrage against money market funds with "Low rates pressure US money market funds." It says, "US money market funds are struggling to make returns after short-term interest rates fell to record lows in the wake of regulatory changes and a big decline in Treasury bill issuance. The recent drop in rates has compounded the already low level of returns money market funds have made since the Federal Reserve set overnight rates in a band of zero to 0.25 per cent in December 2008." The FT quotes Bob Brown, president of Fidelity's money market business, "Every month feels like a dog year in terms of the rate environment and the regulatory focus." The FT adds, "The low interest rate environment means a growing number of funds are losing business and coming under mounting pressure to consolidate.... The Investment Companies Institute calculates that last year the industry waived $4.5bn of fees to maintain the fixed $1 per share net asset value of funds. The amount of cash invested in money market funds has fallen from its peak of $3,900bn in January 2009 when investors fled risky investments. It now stands at levels last seen in August 2007, ICI data show. The number of fund providers has also fallen -- from 200 a decade ago to 141, according to the ICI." See also, Bloomberg opinion piece, "Make Money Market Funds Go to Market: Business Class".
