Tuesday, September 30, 2008
One less reason to worry. Yesterday Treasury announced that participating money market funds will now be covered under its new guarantee program. Funds can participate by paying a nominal fee of 1 or 1.5 basis points, and that guarantees that their funds will never "break the buck;" which in turn means investors can count on redeeming their shares at $1.00. This makes money market funds virtually as safe as T-bills. It's reasonable to think that almost all funds (except those that invest in only Treasury securities) will participate, if only to maintain their competitive advantage.
Posted by Scott Grannis at 1:14 PM