Managers of money-market funds scrambled Wednesday to reassure investors and disclose daily information on fund holdings after the nation's oldest money fund saw the value of its assets plunge from a soured investment that exposed customers to losses.
BOSTON — Managers of money-market funds scrambled Wednesday to reassure investors and disclose daily information on fund holdings after the nation’s oldest money fund saw the value of its assets plunge from a soured investment that exposed customers to losses.
Fearing investors would pull out en masse, several managers of the normally safe investment products issued statements noting their funds’ lack of exposure to troubled financial firms such as Lehman Brothers, the firm whose collapse spurred the Reserve Primary Fund to take a step known as “breaking the buck” by allowing assets to fall below the amount investors paid in.
OppenheimerFunds said it would post holdings of its three money funds daily on its Web site beginning today. OppenheimerFunds has previously reported money-fund holdings to federal regulators quarterly, and mailed customers semiannual money-fund reports.
Daily postings of fund holdings “will provide the transparency that shareholders want from their money-market funds,” OppenheimerFunds Chief Executive John Murphy said in a message on the firm’s Web site.
Most Read Business Stories
- 55,000 in Washington state may have to pay back thousands in jobless benefits
- 1 house, 45 offers: Homebuyers in Western Washington hard-pressed as supply remains scarce
- Boeing CEO gave up millions in pay; here's what he and other top execs earned
- Amazon's telehealth arm quietly expands to 21 more states
- Alaska Native group, Neiman Marcus settle lawsuit over coat
The firm said its money funds “do not have holdings of some of the companies currently in the news, nor do they have direct exposure to subprime-mortgage-related securities.”
Similarly, Invesco on Wednesday said it will post daily holdings updates, and said its U.S. money funds have no exposure to troubled financial-services companies.
Wachovia said three money funds offered through its money-management subsidiary Evergreen Investments did have exposure to Lehman Brothers, which filed for bankruptcy Monday after the government failed to bail out the investment bank.
The funds are Evergreen Institutional Money Market Fund, with 1.94 percent of total assets held in Lehman debt as of the close on Friday, before Lehman’s collapse; Evergreen Money Market Fund, with 1.66 percent; and Evergreen Prime Cash Management Fund, with 0.97 percent.
Wachovia said it “will support the value of Lehman credit held in the funds” by pouring cash into the funds from the parent company to ensure the funds don’t fall short of maintaining at least $1 for every dollar invested in them.
BlackRock, Legg Mason, Charles Schwab Corp. and Federated Investors were among other firms that reported their money funds have no Lehman exposure.
In case more money funds need cash infusions to avoid the Primary Fund’s fate, the Securities and Exchange Commission on Wednesday issued an accounting clarification to note that management companies providing support for their funds do not have to bring the funds’ assets on to their balance sheets.