Bloomberg writes in the St. Louis Post-Dispatch "Money-market funds are getting another look by investors. They tell us, "Money-market fund returns and other cash equivalents haven't looked this attractive since before the global financial crisis. That has some investors rediscovering the once popular destination for parking money during times of uncertainty, especially now with equities flirting with record highs and the Federal Reserve committed to raising short-term interest rates even more. No greater authority than BlackRock Inc.'s Larry Fink pointed out during a Bloomberg Television interview that cash equivalents are an attractive place to camp out. Whether that proves enough of an impetus remains to be seen, according to Peter Crane, who has been following the sector for decades and serves as president of Westborough, Mass.-based Crane Data LLC. The highest-returning funds are yielding about 2.2 percent, compared with about 5 percent before central banks in the U.S., Europe and Japan slashed borrowing costs to zero to revive growth in 2008." The piece quotes Crane, "To hold an allure to cash, 5 percent had been a big psychological level in the past and a lot of investors -- and old guys in Florida and retirees with cash -- are looking at 2 percent and still saying, 'This sucks.' ... They remember that it wasn't long ago that it was 5 percent and their stocks are still doing well. It's coming but it will take more time." The piece adds, "The highest-yielding money-market fund tracked by Crane is the DWS Variable NAV Money Fund, or VNVXX, at 2.2 percent. But with more Fed rate hikes on the horizon, fund yields should top 2.5 percent by the end of the year, he said. Money funds stand to have sizable cash injections over the second half of the year, as later months historically see the biggest inflows, he said." Crane also tells Bloomberg, "People need to be reminded of risk and they haven't been yet.... You still have a broad de-sensitivity to rates on cash, because they were so low for so long that it will take a while for the ostrich to pull its head out of the sand."

Email This Article




Use a comma or a semicolon to separate

captcha image

Daily Link Archive

2024 2023 2022
November December December
October November November
September October October
August September September
July August August
June July July
May June June
April May May
March April April
February March March
January 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