Is your money fund safe?

Is your money fund safe?

The short answer is yes. But there are risky securities lurking in some portfolios.

(Fortune Magazine) -- Money market mutual funds are known for being both liquid and solid. Liquid because you can get your money out of them at any time; solid because they maintain a steady value of $1 per share. And they\\\'re popular because they tend to pay slightly higher rates than Treasury bills or bank savings accounts. Individuals and institutions alike use them to park cash they are waiting to deploy and to ride out market storms. Amid the turmoil of the past year, assets have soared 45%, to $3.5 trillion. But with the credit crunch casting doubt on many formerly safe-seeming securities, the big question for many investors has become, Is my money fund safe?

The short answer is yes, with some caveats: Money market funds have been around since the mid-1970s, and since then no retail investors have lost a cent in one. \\\\\\\"Money market funds have endured crises in the past and are still safe,\\\\\\\" says Alyce Zollman, a financial consultant at Charles Schwab. But investors are right to be concerned. \\\\\\\"There is so much less risk with money market funds relative to other funds that people view them as risk-free,\\\\\\\" says Robert Plaze, an associate director in the Securities and Exchange Commission\\\\\\\\\\\\\\\'s division of investment management. \\\\\\\"But they\\\\\\\\\\\\\\\'re not insured by the government. Saying there\\\\\\\\\\\\\\\'s no chance for problems is not accurate.\\\\\\\" The danger: A fund could suffer losses on its holdings and \\\\\\\"break the buck\\\\\\\" - see the value of a share fall below $1.

Money market funds typically hold a mix of short-term corporate bonds, Treasury bills, and other high-quality debt. But in recent years they also bought more exotic stuff: specifically, paper issued by structured investment vehicles (SIVs) - entities set up by banks to hold debt off their own balance sheets. \\\\\\\"Last August, over half of money fund managers were buying SIV-related debt, which amounted to about 5% of money market fund holdings,\\\\\\\" says Peter Crane, whose firm, Crane Data, tracks money market funds. Crane goes on to explain that when the market for a security dries up, as it did for SIV debt, the value drops, even if the risk of default hasn\\\\\\\\\\\\\\\'t increased. And in a fund where even 1% of the assets have no buyers, says Crane, \\\\\\\"the fund could break the buck.\\\\\\\"

Since last summer Crane has seen 13 asset-management companies buy securities from their portfolios or take other actions to prevent a share-price decline. Crane estimates that SIV-related paper now makes up less than 2% of money market fund holdings.

How can you protect yourself from dubious money fund holdings? The first thing to do is to make sure that you\\\\\\\\\\\\\\\'re invested in a true money market mutual fund and not some look-alike investment, such as a floating-rate bank loan fund or seven-day-paper fund. If you\\\\\\\\\\\\\\\'re in doubt, ask your broker or the fund sponsor whether the fund is registered with the SEC under the Investment Company Act\\\\\\\\\\\\\\\'s Rule 2a-7. \\\\\\\"Only funds that are 2a-7 compliant have to follow provisions put in place to keep a fund from breaking the buck,\\\\\\\" says Brian Reid, chief economist at the Investment Company Institute. The rules require funds to buy high-quality securities - and to ascertain that quality through their own due diligence, rather than relying only on credit ratings. Also, the funds are not allowed to invest more than 5% of their assets in the securities of any one issuer (unless that issuer is the federal government), and the weighted average maturity of all securities in the portfolio can be no longer than 90 days.

Once you\\\\\\\\\\\\\\\'ve established that what you have is a true money market fund, it\\\\\\\\\\\\\\\'s not realistic to think you can comb through the portfolio and detect dubious securities. So your best protection is to stick with funds operated by major companies such as Fidelity, Merrill Lynch (MER, Fortune 500), T. Rowe Price (TROW), and Vanguard. Although they are not compelled to do so, those companies are almost certain to step in to prevent any losses in their money market funds. It is not merely a matter of good citizenship, says Crane. The companies are much better off absorbing a small loss to avoid breaking the buck than suffering permanent harm to their credibility. Says Crane: \\\\\\\"If a run started, that would do more damage than that small loss, and the damage to reputation would be huge.\\\\\\\" .

货币基金安全吗？

你的货币基金安全吗？

简单的说，是的。但是在一些投资组合里隐藏着有风险的证券。

（作者）Katie Benner

（财经杂志）货币基金因流动性和稳定性而闻名。流动性是因为你可以在任何时候把它变现。稳定性是因为每份基金经常保持在稳定的1元附近。他们受到欢迎，还因为他们的回报要比政府债券或银行储蓄的利率要高一点。个人或机构喜欢使用货币基金来保管需要进行配置的现金，能够回避大的市场波动。在近几年的动荡里，资产价值暴涨了45%，达到3.5兆美元。但是，带着信用危机给以前看似安全的有价证券造成的疑虑，对多数投资人而言，‘我的货币基金安全吗？’成了大问题。

简单的说，是安全的。要知道，子20世纪70年度中期以来，没有一个投资人损失过一分钱。Charles Schwab公司的金融顾问Alyce Zollman说，货币基金在过去熬过了危机，在将来仍然是安全的。在美国证券交易管理委员会的投资管理部门任联合董事的Rober Plaze认为，相对于其他证券更低的风险，它被称作零风险基金，但是政府并不为此担保，说没有问题是不准确的，投资人仍然应该被关注。危险是，一只基金在持有期间可能承受损失，并且会跌破净值。

货币基金通常是一个短期企业债券、财政债券、及其它高等级债权的组合。但是，近年来，货币基金开始买入更多的境外资产，特别是结构性投资工具（SIVs）签发的票据——银行打包的资产用来平衡资产负债表上的快到期负债。“去年的八月，超过半数的货币基金经理都在买SIVs相关的债券，总计达到货币基金持有资产的5%”，Peter Crane说（他的公司Crane Data收集货币基金的数据）。Crane继续解释说，当基金市场对证券的渴求到极致时，正如对SIV债券那样，即使预期风险没有增加，资产价值也下降了。一只基金即使有1%的资产没有买家，这个基金也会跌破净值。

去年夏天以来，Crane看到13个资产管理公司在他们的证券组合里购买证券或者采取其他方式去阻止资产价格下滑。Crene估计与SIV相关的票据在基金持有资产的比例不到2%。

怎样来保护你远离那些可疑的货币基金呢？首要的事情是，确保你投资的是一只真正的货币基金而不是那些看起来类似的基金，比如浮动利率银行贷款基金或者周交易票据基金。如果你不清楚，可以向你的经纪人或者基金发起人咨询，这个基金是否是按照投资公司法的2a-7规则设立并在SEC（证券交易所）登记。“只有符合2a-7条款的基金保持减值准备来预防跌破净值”，投资公司学会的首席经济学家Brian Reid说。这个规则要求基金购买高等级的证券，并且是根据自己的勤奋工作来稽查证券的质量，而不仅仅依赖于信用等级。另外，基金不允许在任何一个发行商（除非发行商是政府）哪里购买超过5%的资产，而且，投资组合中所有证券的加权平均到期时间不能超过90天。

当你确认了你所拥有的是真正的货币基金，就认为你可以在繁杂的投资组合里去辨认出不可靠的证券是不现实的。你最好的保护措施是，坚持持有由主流公司操作的基金，比如Fidelit、Merrill Lynch、T.Rowe Price和Vanguard公司。尽管没人去强迫他们这么做，他们总是必然的采取步骤来防止他们货币基金的损失。Crane说，这不仅仅是一个良好的公民品行问题。这些公司宁愿承受小的损失而避免跌破净值，而不愿对他们的信用造成永久的伤害。他继续说：“一旦开始冒险，可能带来比小损失更大的伤害，而对商誉的伤害则会更大”。