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Vanguard, the mutual fund company, makes a good point in its comment letter to the SEC. Vanguard notes that money market mutual funds serve important investor needs, such as a diversifier in a portfolio of securities, a safe harbor during market volatility and an emergency fund to pay for unexpected expenses. For retail investors, the $1 share price is "a very highly valued feature."
As a result, Vanguard believes retail investors should continue to have the benefits of stable $1-per-share pricing, while institutional investors could work with a floating NAV.
The fluctuating NAV is only one aspect of the SEC proposal. To read it, go to the www.SEC.gov website and look in the "Money Market Funds" section.
The SEC has received more than 100 comment letters on the proposal, which you can find on the SEC.gov website at http://www.sec.gov/comments/s7-03-13/s70313.shtml
Julie Jason, JD, LLM, a personal money manager (Jackson, Grant of Stamford, Conn.) and award-winning author, welcomes your questions/comments (firstname.lastname@example.org).
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