audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Right, thanks, it’s not a floating NAV for retail funds, the distinction is the liquidity restrictions and whether a fund can disallow folks from withdrawing funds during times of stress or impose a redemption fee (from Fidelity):No money market mutual fund can guarantee that it will maintain $1. All contain a disclaimer that it might break the buck. I believe you may be confusing this with the recent SEC rule changes.
Those rule changes allow an institutional MM fund's NAV to float but people invest in "retail" funds which are exempt. The rule change that applies to people are the liquidity restrictions on non-government (prime) money market funds.
I was referring to the latest SEC changes and that there was a material difference between the two classes of MM funds available to the retail investor, and when comparing yields the difference should be noted. I just forgot that the floating NAV was confined to non-retail MMs.Specifically, if a fund’s weekly liquid assets were to fall below 30%, the board of directors of a prime (general purpose) fund or a municipal fund may either charge a liquidity fee of up to 2% on shareholder redemptions or impose a halt on all shareholder redemptions (known as a “gate”) for no longer than 10 days. Additionally, if weekly liquid assets were to fall below 10%, a prime or municipal fund must impose a liquidity fee of 1%, unless the fund’s board determines that such a fee is not in the fund’s best interests. These liquidity fee and redemption gate requirements apply to both retail and institutional funds. Government and U.S. Treasury money market mutual funds will not be subject to liquidity fees or redemption gates.
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