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Article: Money market failings send bond funds soaring
- Article from:
- The Boston Globe (Boston, MA)
- Article date:
- November 10, 1991
- Author:
CopyrightCopyright (null) The Boston Globe. Provided by ProQuest LLC. (Hide copyright information)
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In the mid-1980s, recalls Don Phillips, publisher of Morningstar
Mutual Funds in Chicago, yields on money market mutual funds dropped
below an important "benchmark" number: 10 percent. When that
happened, investors started scrambling to find alternative low-risk
funds that could keep their yields above the magic number. Many of
them went into Ginnie Mae funds of mortgages backed by the Government
National Mortgage Corp.
They got burned when homeowners refinanced mortgages and the
plunging share prices on these funds chewed up all the yields, and
then some.
Now, with money fund yields below another benchmark -- 6
percent, in the vicinity of passbook savings accounts -- investors
are once ...