One consequence: a higher proportion of wealth-management products must be invested in highly liquid money-market and bond-market instruments, which offer lower returns.
The bank is issuing fewer wealth-management products invested in illiquid instruments such as loans to investment trusts, and more that are invested in liquid but lower-yielding assets such as bonds and money-market instruments, the person said.
It certainly makes one question the folks who are advising her, even considering the fact that these days many Generation-Y members have their retirement money parked in super-safe money-market funds and supposedly safe fixed-income instruments, despite a 30-year or greater investment time horizon.
Following a prominent fund's "breaking of the buck"--that is, a decline in its net asset value below par--in September, investors began to withdraw funds in large amounts from moneymarket mutual funds that invest in private instruments such as commercial paper and certificates of deposit.