JPMorgan shuts five money funds following ECB move
BOSTON (Reuters) – JPMorgan Chase & Co has temporarily closed five European money market funds to new investors, a spokeswoman said, citing the interests of current investors after an interest rate cut by the European Central Bank.
JPMorgan spokeswoman Kristen Chambers said the New York bank’s investment arm temporary closed the funds “because we think it will help prevent further dilution in yields, which is in the best interest of clients.”
JPMorgan’s move was first reported by Bloomberg News.
On Thursday the European Central Bank cut its main refinancing rate to a record low 0.75 percent in the wake of grim economic data. The lower rate could send investors looking for new places to put cash to work, such as in money funds.
But money fund managers are hardly looking for more cash from investors. U.S. fund operators have been squeezed by low interest rates and have slashed fees just to keep clients invested in the cash-management vehicles.
Operators of equity mutual funds often close the vehicles to new investors when managers have difficulties finding new places to invest cash. Peter Crane, publisher of the cranedata.com website, said money funds have also been temporarily closed in response to low interest rates, such as in 2009 and 2010 at several U.S. Treasury money funds.
(Reporting By Ross Kerber; Editing by Kenneth Barry)