Note to Self: Money Market Funds Are Mutual Funds

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At the Morningstar Investment Conference held in Chicago last week, I learned that on about 300 instances, asset managers had to step in, voluntarily, to prop up their money market funds since the 1970s. Like auction rate securities, people get complacent. Remember: money markets are mutual funds.

The Wall Street Journal reports today that Moody's Investors Service downgraded debt securities issued by "38 closed-end mutual funds last week could ripple across financial markets, affecting a broad swath of municipal-bond and money-market-mutual-fund managers, analysts said." Guess who often buys variable-rate demand preferred shares? Yup, money market funds.

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