But are they really so safe? According to Joe Morris for Ignites, several funds are being bailed out. Legg Mason says it’s spending more money on the funds to do so, while Bank of America’s Columbia unit is reorganizing one of its funds to protect investors from losses.
In spite of the woes, both Columbia and Legg say the funds are still reporting inflows. Columbia says its money fund assets hit $152 billion at the end of 2007, while Legg says its funds have garnered $11 billion in inflows.
While these firms are taking steps to protect investors, what if there was a big money market fund where the sponsor was either unable or unwilling to infuse cash?
It wouldn’t be pretty.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.