Breaking the Buck

Breaking the buck is a term used in finance, especially in the United States, for a situation when net asset value (NAV) of a money market fund falls below $1. Such a situation can come in the money market when a fund's investment income is less than operating expenses or investment losses. There can be several causes behind such occurrence, such as interest rates drop to very low levels, or the fund creates capital risks by leveraging in otherwise risk-free instruments available in the market.