The man who created the world's first money market fund is unhappy over what he views as an "abuse" of the concept. Bruce Bent, who invented The Reserve Fund in 1970, told
The Financial Times
that his original concept was not intended to give investors any headline risk. "The money market fund was created to provide effective cash management, to guarantee at least a dollar in and a dollar back and beyond that, a reasonable rate of return," Bent told the paper. He noted that most investors are not aware that some of the biggest money market funds are pouring money into CDOs backed by subprime debt. "That is clearly inappropriate," Bent said. "It really reflects poorly on what we are here to do. The sanctity of the dollar is key."
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