Fund companies shuttered a record 60 ETFs last year, and, given current market conditions, many more may be on the way. Ron Rowland, a contributor to seekingalpha.com, has 139 funds on his ETF Deathwatch. All are new, small and rarely traded.
If you're looking to invest in a money fund that invests only in Treasury securities, you're going to have to start looking much, much harder. Many funds are starting to restrict access to Treasury-only money funds, and some are shutting them down entirely.
Evergreen Institutional 100% Treasury Money Market fund, for example, closed to new investors Dec. 1. And defined-contribution plans that don't already offer Vanguard's Treasury Money Market fund won't be able to do so in the future.
Why are funds becoming so cautious with Treasury funds? The average three-month Treasury bill yields 0.13%, and most money funds need to charge more than 0.13% for expenses. Although many fund companies absorb expenses, few are happy about it. As of last week, the average Treasury-only money fund yielded 0.18%. Ten funds yielded exactly zero. Given the programs the government currently has to prop up money market funds, it makes little sense to take a zero yield in a fund that's not particularly safer than most others.
Fund news …
Evergreen investments is shuffling off to Palookaville. The funds will become part of Wells Fargo's fund family. … Templeton Foreign Companies finex and Templeton Global Smaller Companies temgx reopened to new investors last month, according to Morningstar. Other reopenings of note: Matthews Asian Growth & Income, macsx Oakmark Equity & Income, oakbxCalamos Convertible, ccvix Fidelity Low-Priced Stock, flpsxand Fidelity Contrafund. fcntx There will be neither Bjurman nor Barry at the Bjurman Barry Microcap Growth fund. It will be merged into Gamco Westwood Mighty Mites. … Maureen Pettirossi has left MFS Massachusetts Investors Growth Stock. Jeffrey Constantino continues as a sole manager, according to Fundalarm.com. … Looking for a way to turn $10 into $650? W. Atlee Burpee & Co., the seed company, is making no promises, but says its Money Garden packet, $10 at www.burpee.com, could grow up to $650 worth of vegetables. Past garden performance, of course, is no guarantee of future produce.
By John Waggoner, USA TODAY