By Herbert Lash
NEW YORK, March 31 (Reuters) – Fidelity Investments, one of the world’s largest asset managers, on Tuesday closed three money market funds to new investors to protect the return of existing shareholders after the Federal Reserve this month cut short-term interest rates to near zero.
Restricting the money flow into the three funds will help reduce the number of new Treasury securities paying lower yields that Fidelity will need to purchase and thereby halt the dilution of existing shareholder returns.
“Newer issues generally have lower yields than the funds’ current holdings, and as such they would affect the funds’ ability to continue to deliver positive net yields to shareholders,” Boston-based Fidelity said in a statement.
Fidelity Treasury Only Money Market Fund, FIMM Treasury Only Portfolio and FIMM Treasury Portfolio had a cumulative $85.5 billion as of Monday, said the closely-held asset manager best known for actively managed