Fitch: Investors Accept Negative Euro MMF Yields; VW Exposure Cut

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Fitch Ratings says that investors are accepting negative euro money market funds’ yields as they face the lack of low-risk alternatives and amid heightened risk aversion at a time of market stress, as was the case over the summer. In its latest quarterly report on European MMFs, Fitch highlights:

  • Outflows from euro CNAV halted in 3Q15 despite their negative yields, in line with short-term euro market rates.
  • Fund managers made active adjustments to their modest Volkswagen exposure.
  • Financial issuers reach new lows in European MMFs after two years of steady decline.

More information available in Fitch’s European MMF Quarterly 3Q15 report (registration required).