response 51 of 62:

Jul 14 01:21 UTC 1998

Several items to consider if shopping for a money market mutual fund:

The quoted interest rate is probably not what you'd get if you let 
your money sit and compound for a year for two reasons:  
 - compounding effects (and which of the 17 ways of calculating the
        interest rate did they quote you, anyway?)
 - the interest rate goes up and down with the "going rate" in the 
        money markets (Wall St., etc.) and the expense ratio. 

In taxable accounts, a low interest on a treasury or municipal money 
market fund can leave more dollars in your pocket than a higher interest
fully-taxable fund.

Tight regulation or no, the fund company and management does matter.
There's *no* FDIC insurance on a mutual fund.  "U.S. Treasury" in the
name is no magic wand to keep them for losing some of your money in
an Orange-County-style gamble.  They can jack up the interest rate to
pull in investments, then drop it way down to make $$$ at the expense
of investors who aren't paying enough attention.  Minimum investments,
fees, and how often they screw vary quite a bit. 

response 53 of 62:

Jul 15 00:18 UTC 1998

Well, let's see.  Semantics aside, temporary waivers of fees & expenses
by the fund company can easily be used to play the bank's game of "lure
'em in, then milk 'em good".  I believe that it was '94 or '95 when the
Treasury money market fund that NBD wanted our company to invest in dropped
below $1.00 per share.  (Probably '94.  I had the prospectus for a couple
years and was quite amused by how little it would have cost them to - ah
- "fix" the NAV compared to the lost management fees when most of their
assets under management bolted for the exits.  My recollection of the
times is that they weren't the only ones, but that most management 
companies "covered" their losses.)  And whether that SEC yield is always
quoted or not, my experience is that many similar-sounding numbers are
often quoted, and a sharp eye & ear (and clear understanding of which 
numbers to treat how) is needed to compare apples to apples.

Such things aside, it is nice hear that your experience inside part of the
industry has been good.  

response 55 of 62:

Jul 16 03:20 UTC 1998

I'm talking *only* mutual funds.  NBD was marketing this one, and my
recollection is that the management company was basically a NBD corporate
lap dog.  More than one "portfolio" of this fund dropped below the magic
$1/share - which might mean more than one legally defined fund, depending
on the small print.  

Everything i've heard suggests that buying mutual funds at a bank is a
very poor idea.

response 57 of 62:

Jul 19 19:14 UTC 1998

Pax, a socially responsible investment company, now also has a money market
fund.  They sent me one small envelope containing all the information that
I needed to apply for their IRA.  Fidelity sent me several large envelopes
full of redundant glossy brochures, an application form for the application,
and then a large box containing the application form and a video for my
employees (after I had filled in that I had none).  Pax chooses companies that
are not involved in the defense industry and treat their employees well, and
you get a person almost immediately when you call instead of having to poke
numbers for five minutes.  (But Fidelity is also very competent and nice).

response 61 of 62:

Jul 18 22:22 UTC 1999

Ya know, Mutual funds can lose lots of money, So that's something to think
about.