An increasing number of investment management firms are suspending sales of money management funds because interest rates are slumping in the wake of the Bank of Japan’s shock decision Friday to introduce negative interest rates.
MMFs, which invest assets mainly in low-risk public and corporate bonds, are known as relatively safe products, although their principal is not guaranteed.
Asset managers decided that the falls in market interest rates prompted by the BOJ’s unprecedented step will make it difficult to generate stable returns.
Mizuho Asset Management Co. said Monday that it will suspend subscriptions to one of its MMFs starting Tuesday afternoon. Mitsubishi UFJ Kokusai Asset Management Co. will do the same for five products, including two MMFs and an investment trust fund that manages assets mainly in medium-term government notes, starting Tuesday.
Daiwa Asset Management Co. decided Friday to stop selling an MMF and two other investment trust fund products on Monday.