NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: U.S. Money Market Funds Sector Update: Q3 2011

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=653007

U.S. money market funds (MMFs) portfolios continued to move toward more conservative portfolio allocations during the third quarter of 2011, according to Fitch Ratings' U.S. Money Market Funds Quarterly.

Fitch believes rated prime MMFs have conservative positions with respect to credit, interest rate and liquidity risk as evidenced by the reduction in credit exposures, a high level of available liquidity and low weighted average maturity to reset date (WAMr).

Fitch-rated U.S. prime MMFs reduced their exposures to bank CDs, particularly those offered by European banks, in favor of U.S. securities and overnight timed deposits (TDs). As of Aug. 31, 2001, Fitch-rated MMFs allocated 13.8% of their total assets to short-term TDs, up 5.7% from May 2011. Investments in repurchase agreements (repos) stood at 15.6% of Fitch-rated prime MMF total assets.

Fund operators remain challenged by the prolonged low interest rate environment, forcing them to forgo fees to avoid negative yields. Evidence of this pressure is seen in increasing industry consolidation and/or outright fund liquidations.

Fitch's 'U.S. Money Market Funds Sector Update' is available a 'www.fitchratings.com'.

For more information regarding recent MMF sector regulatory developments, see Fitch's report 'U.S. MMF Reforms on the Horizon' dated Oct. 6, 2011.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'U.S. MMF Reforms on the Horizon', dated Oct. 6, 2011.

Applicable Criteria and Related Research:

U.S. MMFs: New Reforms on the Horizon

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=652686

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