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Article: Money market and bond funds may be more risky than you think
- Article from:
- The Scotsman
- Article date:
- November 19, 2005
- Author:
CopyrightCopyright 2005 The Scotsman. Provided by ProQuest LLC. (Hide copyright information)
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SCORES of investors in money-market and bond funds - theoretically
safer bets than equities - could be assuming more risk than they
think, according to Standard & Poor's.
The ratings service claimed the low interest-rate environment was
encouraging some fixed-income managers to take on more risk to try to
add yield.
Many fund managers were switching from gilts into corporate bonds
and, to a lesser extent, more sophisticated structures, such as
credit derivatives, resulting in the potential for greater risk and
volatility, S&P said.
High yield funds that invest more than 50 per cent of their assets
in sub-investment grade securities have seen a surge in asset size
over the past five years ...