This Is When Your MMF Type Matters.

MAKNYC
  |     |   324 posts since 2015

Given the unprecedented speed of the failure of Silicon Valley Bank (Top 20 U.S. bank a few days ago), and to a lesser extent Silvergate this is one of those rare times when one should pay attention to their brokerage MMF types. Many of these increase their returns by broadening the universe of what they buy, including commercial paper and time deposits at banks. Well, if they owned any with Silicon Valley Bank, they could have actual losses, or at a minimum significantly delayed access. Investing in a MMF that restricts itself to treasuries, or possibly ‘government’ issued securities insures higher confidence in continued liquidity, although those funds will probably show accelerated rate declines versus the others given current developments. The broader funds are more likely to have gates and/or redemption fees in times of extreme stress. READ YOUR PROSPECTUS.



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