40% of US Money Funds Post Zero Return: Lipper

[EV_Ares]

More than 40 percent of U.S. taxable money market mutual funds posted zero return Thursday amid persistent turmoil in the credit markets, fund tracker Lipper said Friday.

Lipper said 560 of the 1,263 classes of taxable money funds it tracks earned no return Thursday. This compared with 73 classes that posted zero return Wednesday and 63 Tuesday.

A lot of taxable money mutual funds "put up big fat zeros yesterday," said Jeff Tjornehoj, senior research analyst at Lipper in Denver. "This is unprecedented in recent history."

Investor confidence in the safety of money market funds was shaken this week after the Reserve Primary Fund, one of the oldest U.S. money market funds, said on Tuesday its net asset value fell below $1 a share due to losses on securities issued by U.S. investment bank Lehman Brothers Holdings Inc which filed for bankruptcy Monday.

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