Money Market Executive writes "Investors Leave Money Funds for More Risk. The article discusses recent money fund outflows but says, "But it has been those money funds that have kept mutual fund investors appeased in the downturn. Safe investments like cash and money funds did a fantastic job of protecting assets during the recent bear market when the average equity fund lost more than 30%." The piece quotes Steve Meier, CIO for cash at State Street Global Advisors, "Investing in cash has become less satisfying for investors. The second quarter saw a tremendous reduction in risk aversion." It also quotes former Moody's analyst Steve Schoepke, now director of research at Financial Research & Analysis Associates, "How long will these firms be willing and able to subsidize money funds?" The article also quotes our Peter Crane, who counters, "A trickle out of the money market space tends to be a gusher in other asset classes.... The survivors of this bear market were the ones who kept their money market funds. The biggest winners in the mutual fund game had the broadest exposure in money funds. You've got to have money market funds to survive a bear market. Anybody exiting this space would be a fool." Finally, Crane tells MME, "The floating NAV does not even have a small likelihood of becoming a reality. It will be crucified during the comment period."
