Bloomberg writes "Euro Money Funds Preparing for Yields Below Zero, Fitch Reports". The article says, "More than half of the euro funds represented by the Institutional Money Market Funds Association are changing share structures so they can operate if yields fall below zero, Fitch Ratings said. Funds with almost 50 billion euros ($67 billion) of assets have adopted, or said they will adopt, changes that allow them to pass losses to investors by reducing the number of shares they own, according to Fitch. Without the change, record-low yields on the debt the funds buy will threaten their fixed-share price and force them to shut. JPMorgan Chase & Co. (JPM) said in October it was replacing two stable net asset value euro money-market funds with variable share classes. RBS Asset Management Ltd. is adopting the changes for funds with 9.8 billion pounds ($15.4 billion) under management while Morgan Stanley (MS) has also announced similar structures." Fitch comments, "Investors have been accepting of this. We expect more fund complexes will follow suit." Crane Data's Money Fund Intelligence International shows the 65 Euro money market funds yielding 0.03% on average (Crane Euro MMF Index 7-Day Yield) and holding 90.7 billion in Euro as of Jan. 30. See also, ICI's latest weekly "Money Market Mutual Fund Assets".
