Jan 25 Federated Investors, one of the
largest managers of U.S. money market funds, said it expects to
waive more fees on those funds in the first quarter than it did
in the prior quarter due to lower interest rates.
Fee waivers could reduce pre-tax net income by about $21
million in the quarter, up from a hit of $15.5 million in the
fourth quarter, Federated chief financial officer Tom Donahue
said on Friday on a call with analysts.
With rates on short-term bonds so low, Federated and other
money market fund managers have been forced to waive some of
their management fees to prevent fund yields from turning
In the fourth quarter, a slight uptick in rates allowed
Pittsburgh-based Federated to garner more fees than a year
earlier. But rates in the first quarter have turned back down,
Federated's fourth-quarter profit jumped 34 percent to $49.6
million, or 44 cents per share, the company said on Thursday.
Assets under management totaled $379.8 billion on December 31,
Federated is the third-largest manager of money market
funds, trailing only Fidelity Investments and JPMorgan Chase &