I have some ETFs and mutual funds that are invested in government debt, if

[RB TexLa]

the US credit rating is dropped they had better follow their rules and sell that shit as fast as they can. No exceptions should be made. The country issuing the debt means nothing.

[customerserviceguy]

1. That would be exactly the wrong thing to do

They'd sell at lower prices, probably, and then, what would they turn around and invest in?

On the other hand, if they held them to maturity, they'd get paid in full, even if they're just simply refinanced with or without a raise in the debt ceiling, and the principal would still be safe. No one is going to leave Treasury securities, a credit rating change just affects the amount of the interest that the market wants to lend the US government their money. In the past, that rate has been very much higher than it is today, or would be after a ratings adjustment.

[RB TexLa]

2. But they only can invest in X% of subpar debt. By rule they would have had to sell off US debt

you have nationalistic assholes saying "you gotta make an exception cause it da good ole US ugh A!" Which is bull, doesn't matter what damn country it is.

[customerserviceguy]

3. So, where are they going to invest it, instead?

What economy is stronger than ours, even in the weakened state that we see it today?

[RB TexLa]

4. There are still governments and companies with the top rating

[customerserviceguy]

5. Perhaps those are the places

to reinvest, when the time comes. I'm sure the mouse type in your prospectus gives the managers of your fund the right to make an orderly withdrawl of funds from their investments, rather than having to make a panic sale that would be disasterous.

[muriel_volestrangler]

6. What is the precise definition of 'subpar debt' they gave you?

And what are their rules about investing in bonds denominated in other currencies? What about exchange rate movements?