Barron's writes "How Much Risk Is Worth Higher Yields? Watch Those ‘Floating’ NAVs". It says, "Allowing money markets to float their net asset values rather than forcing them to maintain a steadier state would likely spark a run on such funds, asserts David Hirschmann, CEO of the Center for Capital Markets Competitiveness. A floating NAV -- still being considered by regulators -- is a "blunt instrument" to solve the possibility of a fund "breaking the buck," he told Dow Jones Newswires.... His message to regulators: define the problem clearly first, decide whether the changes already made have worked and proceed with caution. If he's right that investors won't see much value in money markets if NAVs are allowed to float, then ultra-short bond funds like the Pimco Enhanced Short Maturity Strategy ETF (MINT) would likely be a prime beneficiary. As noted earlier, Legg Mason has filed with the Securities and Exchange Commission to launch its first exchange-traded fund. Its mandate appears to closely resemble that of MINT's. Still, some analysts are preaching restraint. Anything yielding more than 1% under current conditions is taking oversized risks, asserts Peter Crane, whose Crane Data research firm specializes in tracking money markets." Crane says, "The search for more income at the shorter-end of the (yield) curve tends to attract the wrong type of crowd at this stage in the cycle. Some short-term bond funds could be a wreck waiting to happen." See also, WSJ's "Bank-Run Risk in the Shadows".
