Yesterday I wrote about mutual funds at risk because of the mortgage mess. In response one of my readers (thanks Gary!) alerted me to an article in Fortune talking about how the safest of investment vehicles -- money market funds - are caught up in the SIV problem. Again Bank of America (NYSE: BAC) comes to the top of the pack as hosting some of the riskiest investments for its investors through Columbia Cash Reserves Fund. Fortune reported that as of Oct. 12 this fund has about $640 million in Cheyene Finance, an SIV in trouble.

Continue reading Money market funds at risk too - thanks to the mortgage mess

Money market funds at risk too - thanks to the mortgage mess originally appeared on BloggingStocks on Tue, 23 Oct 2007 17:28:00 EST. Please see our terms for use of feeds.

How vulnerable is your mutual fund to the ongoing mortgage meltdown? In this series, BloggingStocks contributor Lita Epstein, author of more than 20 books including Trading for Dummies and The Complete Idiot's Guide to Improving Your Credit Score, digs into mutual funds' holdings looking for securities with exposure to the currently shaky credit markets.

After reviewing funds from Bank of America, JPMorgan, and Fidelity, companies that have been mentioned in some of the SIV bailout stories, I looked to see if other bond mutual funds also had significant exposure to the credit markets tied to this mortgage and asset-backed securities mess. While I can't guarantee that I located all the ones with significant exposure to this mess, here are some key players:

Eaton Vance Low Duration A has the riskiest position by far of all the ones I look at this morning. As of 04/30/07, this fund held 79.93% of its assets in mortgage pass-through securities. More than 75% of its holdings are in bonds rated BB and B. Its yield of 5.5% certainly doesn't justify this risk. If you are holding this fund, you could find a safer bet with similar yields.

As of 9/30/2007, Credit Suisse Short Duration A held 15.43% of its assets in mortgage pass-through securities, 13.86% in collateralized mortgage obligations, and 12.82% in asset-back securities. That's slightly more than 40% of its portfolio in the type of credit markets now showing signs of trouble.

Continue reading Mutual funds and the mortgage mess: Credit Suisse, Eaton Vance, Hartford, Principal, and Schwab

Mutual funds and the mortgage mess: Credit Suisse, Eaton Vance, Hartford, Principal, and Schwab originally appeared on BloggingStocks on Mon, 22 Oct 2007 19:10:00 EST. Please see our terms for use of feeds.