Firms sign up for Treasury’s fund guaranty program

The Hartford (Conn.) Financial Services Group Inc. announced today that it will participate in the Department of the Treasury’s money market mutual fund guaranty program on the heels of yesterday’s announcement that Fidelity Investments of Boston, The Vanguard Group Inc. of Malvern, Pa., and the T. Rowe Price Group Inc. of Baltimore will do the same. Also, Minneapolis-based Voyageur Asset Management Inc. announced yesterday that the Tamarack Money Market Funds, which the firm advises, will also participate. In recent weeks, the Treasury Department announced a program where financial services firms could pay a fee for insurance and the government will insure the holdings of any eligible publicly offered money market fund. The insurance program will be financed with up to $50 billion from the Treasury Department's Exchange Stabilization Fund, which was created in 1934. If a fund falls below a net asset value of $1, it triggers the insurance. The program was announced following the “breaking of the buck” by The Reserve Primary Fund, managed by The Reserve Management Co. Inc. of New York. When that fund became only the second money market mutual fund in history to dip below a $1 net asset value, the event set off a run of redemptions on money market funds industrywide. “Fidelity and the board of trustees believe that it is in the interests of our fund shareholders to participate in the program, even though it is highly unlikely that the insurance will be needed for any of our funds,” said spokesman Adam Banker. “The money market funds continue to provide safety and liquidity for their cash investments.” “Vanguard remains confident in the stability and liquidity of our money market funds and do not believe the funds will ever need support,” Vanguard said in a statement posted on its website. “The Treasury program provides a ‘shot of confidence’ to all money market fund investors.” Edward Bernard, vice chairman at T. Rowe Price, said in a statement on its website: “We are taking this step to provide an additional layer of reassurance for our money fund shareholders during this difficult period.”