Wednesday, September 17, 2008

We Can See Clearly Now: Money Market Funds Go Transparent

To following should be read while humming the notes from the Johnny Nash song:

I can see clearly now, the rain is gone,
I can see all obstacles in my way
Gone are the dark clouds that had me blind
It’s gonna be a bright (bright), bright (bright)
Sun-Shiny day.

I think I can make it now, the pain is gone
All of the bad feelings have disappeared

In the wake of problems at Reserve Primary Funds, because of holdings of Lehman debt that had to be markdown to zero, some money market funds are announcing that they will list on a daily basis the securities they hold.

Oppenheimer Funds Inc. said it would start posting holdings of its three money funds daily on its web site beginning Thursday.

Daily postings of fund holdings "will provide the transparency that shareholders want from their money market funds," OppenheimerFunds Chief Executive John Murphy said in a message on the firm's Web site.

The firm said its money funds "do not have holdings of some of the companies currently in the news, nor do they have direct exposure to subprime mortgage-related securities."

Invesco Ltd. said today it will start posting daily holdings updates, and said its U.S. money funds have no exposure to troubled financial services companies.

BlackRock Inc., Legg Mason Inc., Charles Schwab Corp. and Federated Investors Inc. were among other firms today that reported their money market funds have no Lehman exposure.

Wachovia money market funds do have exposure to Lehman bad debt, see story here.

-Robert Wenzel

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