NEW YORK — The nation’s largest manager of money market mutual funds no longer holds any US government debt that comes due around the time the nation could hit its borrowing limit.
Money market portfolio managers at Fidelity Investments in Boston have been selling government debt holdings over the past couple of weeks, said Nancy Prior, president of Fidelity’s Money Market Group.
Prior said Fidelity no longer holds any US debt that comes due in late October or early November, the window considered by many investors to be the most exposed if the government runs out of money.
‘‘We expect Congress will take the steps necessary to avoid default, but in our position as money market managers we have to take precautionary measures,’’ Prior said.
Fidelity, which manages $430 billion in money market mutual funds, has taken similar actions in the past, most recently in 2011, when the government came close to a default and Standard & Poor’s downgraded the nation’s credit rating, Prior said.
She said Fidelity has been restructuring its portfolio to focus on securities that mature later this year or in early 2014. She said Fidelity has also moved a significant portion of its portfolio to cash. Prior did not say exactly how much Fidelity held in short-term Treasurys before deciding to sell.
Money market funds are considered a safe place to put money short-term. Individuals and institutional investors have roughly $2.685 trillion in money market funds, the Investment Company Institute says.
Money market funds invest primarily in short-term debt that can be easily bought and sold, such as US Treasurys or commercial paper, debt issued by large companies to fund day-to-day expenses.
Fidelity’s actions underscore what traders have noticed in the last week. Investors have dumped US government debt that comes due this month, with the heaviest selling in one-month Treasury bills.
Fund managers don’t want to be caught holding government debt that comes due around the time the government hits the debt ceiling. They fear the government could be unable to pay back bondholders, said Gabriel Mann at Royal Bank of Scotland Group.
‘‘Investors are buying protection,’’ Mann said.