The London-based Institutional Money Market Funds Association recently issued a document entitled, "Statement: IMMFA Money Market Funds." It says, "A money market fund is a mutual fund which invests in high-quality short-term debt instruments. The money market funds represented by IMMFA should not be confused with other funds which are available. IMMFA represents only triple-A money market funds which value assets on an amortised basis. This allows the fund to maintain a constant net asset value of, for example, L1 or E1." The IMMFA statement continues, "There is a weekly comparison with the mark-to-market value of instruments and the fund to ensure there is no material (i.e. 50 basis points or more) variance between the two values. If there is, the fund is said to have 'broken the buck' and loses its constant net asset value. The funds must have a maximum weighted average maturity of no more than 60 days, and may invest in no instrument which has a residual maturity of more than 397 days.... Only IMMFA members' funds seek to maintain a constant net asset value through utilisation of amortised accounting, as permitted by European directive. Others funds may seek to provide capital security, but must value assets solely on a mark-to-market basis. The concept of breaking the buck is only applicable to those money market funds which maintain a constant net asset value through amortisation."

Email This Article




Use a comma or a semicolon to separate

captcha image

Daily Link Archive

2024 2023 2022
March December December
February November November
January October October
September September
August August
July July
June June
May May
April April
March March
February February
January January
2021 2020 2019
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2018 2017 2016
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2015 2014 2013
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2012 2011 2010
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2009 2008 2007
December December December
November November November
October October October
September September September
August August August
July July July
June June June
May May May
April April April
March March March
February February February
January January January
2006
December
November
October
September