Money market funds risk downgrade

Yields on many European-denominated money market funds will turn negative in the coming weeks, warns Moody's

Yields on many European-denominated money market funds (mutual funds invested in short-term, very liquid debt) will turn negative in the coming weeks, forcing fund managers to alter investment policies and risk a rating downgrade, according to Moody’s.

A report from the rating agency said that the "persistent low interest rate environment and the European Central Bank's decision to cut its deposit rate to -0.2% in September" have affected the returns generated.

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