Money market funds outlook stable through 2012, says Fitch

Fitch Ratings says that its outlook for money market funds in 2012 is stable, reflecting ongoing portfolio management that has left such products well positioned to managed ongoing problems of credit, liquidity and interest rates.

The outlook is specifically published for Fitch rated money market funds. The rating agency said that fund managers continue to position their portfolios defensively, which will help withstand the volatile credit markets, eurozone uncertainties, historically low interest rates, lack of short term money market instruments being issued, and ongoing regulatory reforms.

For example, Fitch says managers in the US have “reduced or eleminated their exposure to European financial institutions, while also increasing availabile liquidity and holdings of US Treasuries.”

European managers are focused on maintaining “short term primary liquidity in their portfolios against recession and eurozone soverign risks.”

The full 2012 Outlook: Money Market Funds is available at

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