Kiplinger's Personal Finance Magazine notes that with interest rates near record lows, money market funds are employing several techniques to increase yields.
With yields on short-term Treasury bills stuck near 0%,
money-market funds that hold these securities are struggling to keep
their returns positive, after fees.Some funds are investing in longer-term securities, which extends the
average maturity of the fund and garners a little extra yield without
compromising safety.[Some have] closed to new investors or limited deposits.... It's easier
to maintain yield without dealing with heavy cash flows in and out of
the fund.
The article also says about 60% of money-market funds are waiving a portion of their fees and that others may soon follow.
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This post is used with permission of Sound Mind Investing, America's best-selling Christian financial newsletter. SMI, published by investment advisor Austin Pryor, has been Crown's primary investing resource for nearly 20 years. More than 14,000 families rely monthly on SMI's step-by-step investment advice. Visit Sound Mind Investing to learn more.
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