Money Fund Yields to Remain LowJanuary 05, 2010 Posted by: Minh Trang
As we enter 2010, fixed-income investments in the short end of the yield curve are trading at levels near historic lows. Even money fund investors are now facing yields hovering just above zero. This downward pressure has been caused by several factors.
First, yields on most sectors have been on the decline throughout the year. Second, the demand for short-term investments has remained strong as the supply of money market instruments has decreased. Finally, the possibility of more government regulatory changes in financial services has kept cash managers cautious.