Could money-market mutual funds yield LESS than zero?
*Bloomberg, by Christopher Condon, December 10, 2008:
"Money-Market Fund Yields May Fall to Less Than Zero, Crane Says
Investors in money-market mutual funds that focus on U.S. Treasuries
may lose money for the first time if the Federal Reserve cuts interest
rates next week and yields become too small to cover expenses.
Record-low yields on government debt have already led money-market
funds to waive fees to keep returns positive. If the Federal Open
Markets Committee, as expected, cuts its target rate, some Treasury
funds may allow returns to turn negative, said Peter Crane, president
of Crane Data LLC, a money-fund research firm in Westborough,
Massachusetts.
'No one has ever paid above and beyond their interest income to be in a
fund,' Crane said. 'But if we see another cut, we’ll likely see
negative yields.'"
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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