Investors often tend to be a paranoid lot. Spurned by past losses, current and future trading behavior is often shaped. Banks and financial institutions recognize this fact, and tailor new products to appease these needs. Most recently, this action comes from JPMorgan Chase & Co. (NYSE: JPM) and Natixis, a French bank.
Individual investors aren’t the only ones still spooked by money market funds that lost money in the credit crisis. So are a host of advisers and money managers. In response, JPMorgan and a financial services unit of French bank Natixis have started marketing new money market mutual funds that aim to hold notes with average maturities of 10 days or fewer. Robert Deutsch, head of global liquidity at JPMorgan commented “As rates go up, the JPMorgan Current Yield Money Market Fund’s short duration should enable it to move into higher-yielding corporate and government debt.”
The fund’s duration, along with that of the RNT Natixis Liquidity Prime Portfolio, are about one-fourth of the typical money market mutual fund, according to Peter Crane, a money market researcher. Crane commented that such short-duration funds are “aimed squarely at the paranoid cash manager.”
