Company schemes can keep costs down by focusing on the default fund, the option that employees end up with (since they have difficulty making their own choice).
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While there is a default fund for those employees that are simply too busy or just prefer to go that route, everyone else must make an annual decision.
If your employer signs you up to the Nest scheme (the government designed National Employment Savings Trust), then the default fund will be based on when you are expected to retire.
Twice it has threatened to default on its repayments to the Fund.
They say it would make default easier and, whatever the Fund's official line, would increase the power of an institution that is driven by politics more than economics.
Indeed, the creation of a big bail-out fund was meant to make default unthinkable.
Developments such as the Suntech default are pushing U.S. fund managers to be highly picky in buying Asian bonds.
"A default on obligations to the banks or the Fund or the Asian Development Bank would complicate the situation enormously, " said Fischer.
The big nay, enormous exception to this came last autumn when, in the aftermath of Russia's debt default and the rescue of a large hedge fund, foreign institutions sold heavily.
Now subtract a little something for the rare default, plus a fee for the mutual fund that is probably your best vehicle for holding muni bonds, and your likely return is very close to zilch.
And since there is no capital at risk for the GP if a fund loses money, the risk of default on the debt is borne solely by the LPs.
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The Argentine government and the Fund are close to a state of open warfare: as the IMF continues to insist that any rescue package for the country depends on commitment to urgent reform, the Argentine finance minister on September 24th threatened to default on the country's debt to the Fund.
Treasurys remain a top choice for investors who value short-term safety over long-term growth because they carry negligible risk of default, says Erik Weisman, a portfolio manager at fund company MFS Investment Management.
"That suggests investors expect the new leaders will try to avoid any bond default, " says Wang Yingfeng, a bond-fund manager at Yaozhi Asset Management Co. in Shanghai, which has two billion yuan in assets under management.
Comments like that are what international bond fund managers used to hear coming out of the big emerging markets, like in Brazil, when in the late 1990s it appeared that only the International Monetary Fund could save it from an Argentinian-style default.
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Falcone only started the fund last year to take advantage of companies already in default, under bankruptcy protection or appear on their way down that path.
He will start his hedge fund in Singaport and focus on Japanese corporate bonds and credit-default swaps.
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LTCM, a hedge fund, collapsed when interest rates suddenly shifted after Russia's default in the summer of 1998.
In a study last year, the International Monetary Fund concluded that ratings were a reasonably good indicator of sovereign-default risk.
But that option is worth less when bondholders must take a back seat to the World Bank and the International Monetary Fund and as Brazil showed in the 11 years it was in default until 1994, it can take years to get even a fraction of your money back.
By November 2007, when the narrative ends, it was already clear to Mr Morris that this crisis was much more serious than the last big crunch, the 1998 Russian debt default and the bail-out of Long-Term Capital Management, an American hedge fund, by a group of banks under the Fed's direction.
Default rates are on the decline, and NTHEX, although it is a high-yield fund, maintains a fairly conservative investment posture (underweighting telecom debt) and keeps its maturities short.
Money-market funds are a specialized kind of mutual fund that is restricted to investing in very short-term securities with little chance of default.
And in 1998, Russia's default led to the near-collapse of Long-Term Capital Management, a hugely leveraged hedge fund, and caused huge losses for other leveraged investors.
If you put your whole bond portfolio into the Vanguard index fund, which is mostly in U.S. governments, you have a fairly low risk of default but a fairly high risk of not achieving a positive real return.
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