Euro Money Funds Preparing for Yields Below Zero, Fitch Reports
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More than half of the euro funds represented by the Institutional Money Market Funds Association are changing share structures so they can operate if yields fall below zero, Fitch Ratings said.
Funds with almost 50 billion euros ($67 billion) of assets have adopted, or said they will adopt, changes that allow them to pass losses to investors by reducing the number of shares they own, according to Fitch. Without the change, record-low yields on the debt the funds buy will threaten their fixed-share price and force them to shut.