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Published on Thursday, October 09, 2008
By LA Daily News Staff Writer
Nearly all the $3.4 trillion in money-market mutual funds is expected to be federally guaranteed for at least the next three months, now that all the major fund providers signed up to participate by a deadline that passed Wednesday.
The universal participation means investors won't have to stay up at night worrying whether their fund family is taking part.
But the protection comes at a cost, with the higher fees that investors will pay for federal guarantees slightly eroding the already-modest yield that money-market mutual funds generate.
And beware of shifting money from one fund to another. The guarantees apply only to assets held in funds as of Sept. 19, so new share purchases since that date aren't covered, including instances in which an investor pulls money from one fund and puts it in another
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