American Funds files for money market fund

American Funds Investment Co. filed last week with the Securities and Exchange Commission to create a new money market mutual fund. The American Funds Money Market Fund will invest in U.S. Treasury securities, federal agency discount notes, high-quality commercial paper, bank and savings association obligations, and short-term corporate bonds and notes, according to the filing. “We felt in this very low-interest-rate environment, where you have to pay a lot of attention to risk, that a fund that had the flexibility to invest in agencies as well as commercial paper and Treasuries would provide the investor with a good addition to the existing funds,” said American Funds spokesman Chuck Freadhoff. The firm, advised by Capital Research and Management Co. of Los Angeles, already has three money market mutual funds in its lineup. The new fund is a hybrid of a Treasury fund and a prime fund, said Peter Crane, president of Crane Data LLC of Westborough, Mass., which tracks the money fund industry. “It’s a sign of the times,” he said. “People want Treasuries but you cannot live on Treasuries in this environment.” American Funds of Los Angeles had $750 billion in assets under management as of Jan. 31.