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Article: Low yields prompt a caution call; Money market: Experts say short- term bond funds not a cash substitute
- Article from:
- Telegraph - Herald (Dubuque)
- Article date:
- May 26, 2002
- Author:
CopyrightCopyright 2002 Telegraph - Herald (Dubuque). Provided by ProQuest LLC. (Hide copyright information)
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A lot of money market mutual fund owners are feeling frustrated
these days. Fund yields are at some of the lowest levels ever - as
little as 1 percent in some cases - and many shareholders are looking
for alternatives.
One possibility is bond funds, specifically those tagged as "ultra-
short" or otherwise implying a short-term focus. Indeed, many of the
funds in this category boast higher yields or better returns than
money market funds, making them especially attractive.
But there are significant differences between money market and
short-term bond funds, and financial advisers caution against using
them interchangeably.
"We don't really look at short-term bond funds as a cash
substitute, ...