, and how it may affect government-backed assets, including some money market funds, according to Daniel Wiener, chairman of Adviser Investments.As default concerns rise, investors fear money market funds may "break the buck," which happens when a fund's so-called net asset value, or total assets minus liabilities, falls below $1.
However, Wiener says "breaking the buck" is rare and less of an issue for larger institutions like Vanguard, Fidelity Investments or Charles Schwab, because these companies have "money available to support their money market funds." He adds: "I do not lose one second of sleep, worrying about my Vanguard or Fidelity money market accounts."
What's more, money market funds are "masters of the ladder," Wiener said, meaning funds invest in a range of assets with staggered maturities, so they are "constantly rolling over securities.
Of course, money market fund yields may drop when the Federal Reserve begins cutting interest rates again. While it's difficult to predict the timeline, someBut these assets may still be appealing in the meantime. To compare performance, you can review a money market fund's seven-day SEC yield, which shows an annual return after fees.