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Article: Banks Weigh Outsourcing Low-Yield Money Funds.(Brief Article)(Statistical Data Included)
- Article from:
- American Banker
- Article date:
- January 18, 2002
- Author:
CopyrightCOPYRIGHT 2002 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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As money fund profits fall with interest rates, banks with smaller money fund complexes are increasingly considering outsourcing their management to larger fund companies.
And some of these fund companies, such as Reserve Funds, Federated Investors Inc., and Nations Funds, are gearing up to grab a share of this subadvising business in 2002.
The current low-yield money fund environment -- early January's 1.54% annual yield average is the lowest in the product's 30-year history -- puts tremendous profit pressure on smaller money fund complexes, said Peter Crane, an analyst at Boston's Imoneynet Inc., which watches the money fund industry.
Banks ...