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(Reuters) – Some major bond fund managers are asking their institutional clients to consider waiving strict requirements that might force mass selling of Treasury bonds if the United States loses its AAA rating.
Pension funds, endowments and other large investors typically establish rules governing how their assets can be invested when they sign on with a money manager. Some analysts fear a downgrade of the U.S. rating would spark a mass sell-off because of guidelines that only permit investments in AAA-rated securities.
Conservative investors would be poorly served if fund managers had to sell off Treasury securities because of a downgrade, said John Donaldson, director of fixed income at Haverford Investments in Radnor, Pennsylvania.
Keep reading here: Fund managers seek freedom not to sell on U.S. downgrade | Reuters.
