Bruce Bent, who came out with the first money market fund in 1970, thinks money market funds that invested in subprime-linked collateralized debt obligations and other risky instruments have been negligent in their duties to investors, Reuters reports.
“The people who have been managing many of these funds are not money fund managers, not cash managers,” Bent said. “They are asset managers of different classes of assets, and they have imposed the psychology of managing stocks and bonds on money funds, and they are wrong.”
Bent said that when he created the money market fund, “the whole concept of this thing was safety of principal, liquidity, a reasonable rate or return and the most overriding concept was you don’t have to worry about money funds.”
