Mark J. Gilbert, CPA/PFS, MBA and principal with Reason Financial Advisors, Inc. was quoted in an article titled “Loan Fiasco Leads to Money Fund Concerns” published on December 17, 2007, in Investment News (www.InvestmentNews.com). Investment News is a weekly publication of Crain Communications Inc. (publisher of Crain’s Chicago Business, among others) and bills itself as “The Leading News Source for Financial Advisers.”
The article discussed the response by financial advisors to awareness that some money market mutual funds are holding securities that have been adversely affected by the subprime credit crisis. These include structured investment vehicles (SIVs) and other securities. As a result, there is concern that money market mutual fund share prices may fall below $1.00 per share.
Gilbert told author Sara Hansard that Reason Financial Advisors was going to be moving about $1 million of client funds from the TDAM Money Market Portfolio into the TDAM U.S. Government Portfolio. “There is nervousness,” according to Gilbert, about the problems associated with the subprime lending crisis.
Both funds are managed by TD Asset Management (TDAM) USA Funds Inc. In October, TDAM issued a statement that less than 3.5% of the funds held by the TDAM Money Market Portfolio was invested in SIVs and related securities.
Both Gilbert and Reason Financial Advisors, Inc. President Patrick Doland believe that exposure to SIVs in money market mutual funds puts investors at undue risk of receiving less than $1.00 for each share purchased for $1.00 in the funds. Money market mutual funds should be considered to be extremely safe investment vehicles that are not subject to principal loss. As a result, Gilbert and Doland decided in early December to transfer all client funds held in the TDAM Money Market Portfolio to the TDAM U. S. Government Portfolio.
Gilbert, a Downers Grove resident provides portfolio management and financial planning services to middle market and high net worth clients in Cook County and DuPage County.
Reason Financial Advisors, Inc. is an independent, fee-only financial planning and investment advisory firm working with individuals and families throughout the Chicago metropolitan area.