September 12, 2014 / 8:12 AM / 5 years ago

Blackrock moves to protect net asset value of money market fund

LONDON, Sept 12 (Reuters) - Global fund manager BlackRock said on Friday it had written to investors in one of its money market funds to tell them it planned to trigger a clause aimed at protecting the value of the fund’s assets.

The move, called a Reverse Distribution Mechanism, will allow the firm to rebalance the net asset value of the fund so that it remains stable even though yields elsewhere may be negative.

The clause will affect the ICS Euro Government Liquidity Fund and does not imply the yield of the fund will turn negative following the implementation of RDM, BlackRock said.

Returns from money market funds in Europe have been hit by a weakening in trading conditions as the European Central Bank has cut its deposit rate to 0.2 percent, some economic data in the region has worsened and as geopolitical risk has increased. (Reporting by Simon Jessop. Editing by Clare Hutchison)

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