Unprecedented redemption pressure faced by offshore money market funds has highlighted the importance of a diversified, stable investor base, according to Fitch Ratings.
It also potentially emphasises the need for support from a sponsor, even though sponsors are not legally obliged to provide support. European offshore money market funds have adjusted their risk profile to the changed market conditions over the last 18 months, according to the report, European Offshore Money Market Funds: Summary of Changing Portfolio and Liquidity Characteristics. Approximately 40% of offshore money market funds experienced outflows exceeding 20% of their net asset value from mid-September to mid-October 2008. In some cases, sponsors have been required to step in and p...
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