Gyroscopic Investing

I'm looking at T. Rowe Price U.S. Treasury Money Fund  (PRTXX):
http://www3.troweprice.com/fb2/fbkweb/s ... cker=PRTXX
and its composition is listed as

Security Diversification as of 09/30/2012
% of Total Net Assets
REPURCHASE AGREEMENTS 53.8%
US TREASURY NOTES 33.3%
OTHER US GOVERNMENT & AGENCIES 13.2%
OTHER ASSETS LESS LIABILITIES -0.2%

How damning is that? Would this fund be safer or riskier than a vanilla prime money market fund?

I don't know how the managers are using them. If they are collateralized with other treasuries then there is less risk. If they are collateralized with Argentinian bonds, then that could be bad.

But yes I do wish these funds would use less of these agreements. With everyone chasing yield in every way possible the use of these kinds of strategies is much more common I suspect.

Thanks. The October composition report shows that the agreements are with huge multinational banks like Citi, Deutsche Bank, GE Capital, etc. Definitely not as good as T-Bills, but the fund is IMO still preferable to a commercial MMF since it at least has a solid 40+% in US government paper.