Money Market Funds in the News

February 11, 2009
By Kevin Cafferty

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Here's some of the latest news involving money market funds:

From MSNBC:

Shares of investment manager Federated Investors Inc. fell nearly 10 percent Tuesday as other asset managers dipped with the markets generally. An analyst downgraded the company's rating concluding that managing money market funds is becoming increasingly risky.

From Smart Money:

The sweep problem isn’t limited to big, national brokerages. Independent financial planners often promote themselves as champions of the little guy. But critics say that they, too, often let their clients leave their money in low-paying sweeps. Every independent adviser uses a brokerage for client accounts, and Dennis Houlihan, a financial adviser in Fort Wayne, Ind., says his brokerage, TD Ameritrade, discourages him from using anything for cash other than its proprietary sweep account. Houlihan acknowledges that he could steer his clients’ cash to higher-yield accounts or funds outside the TD umbrella. But like many investors, he doesn’t want the logistical headache. “I’m managing wealth; I’m not managing money markets and checking accounts,” he says. “Besides, do you really want five statements coming to you?” Lately, for yield, he’s been putting his clients in short-term corporate bonds, including mortgage lender Countrywide’s.

From the Associated Press:

Rates on commercial paper — short-term debt companies sell to money market funds and other investors — have tumbled. The rate on 30-day paper sold by highly-rated financial companies was 0.42 percent last week, compared to over 4 percent late last year.