3 min readBackground Money fund due diligence is among several topics du jour with corporate investors. Prior to the Reserve Primary Fund “breaking the buck” in September 2008, loss of principal and liquidity in a money market fund was barely a concern for most corporate cash investors. Much has occurred in the fund industry since then, and…
2 min readRegular readers of our monthly newsletter may have noticed that we’ve paid particular attention to money market funds of late. It’s true. However, as you’ll see, this is another example of our firm’s philosophy to consciously and consistently seek to challenge conventional thinking about cash management. We understand that while some investors may still hold…
2 min readAs we enter the second decade of the new century, the world financial system has just emerged from a near death experience and embarked on a new journey of redefining itself. Having witnessed the subprime meltdown, the bankruptcy of Lehman Brothers, and the collapse of the Reserve Primary money market fund, corporate cash investment professionals…
1 min readOver the past year, the money fund industry has been shaken by credit and liquidity issues that resulted in more than $50 billion in direct support from fund sponsors. This “behind the curtain” support has tested the resolve of many money fund families and affected the industry in a variety of ways. As a result,…
2 min readExecutive Summary This update to our original whitepaper published in April 2006 seeks to answer two questions: 1) Are prime funds getting safer? 2) Are all prime funds alike? The general risk profile of the large prime fund group has improved since our last publication. The average fund now has better liquidity, better credit quality…
2 min readThe month of September was one that brought several important shifts to the economic and credit landscape and it’s no coincidence that it marked the one-year anniversary of a near global financial meltdown that was averted by unprecedented government support. Analyzing side-by-side Federal Open Market Committee statements from August 12th and September 23rd reveals language…
3 min readConfession: This eye-catching title is not our invention. It is borrowed from a panel discussion on money market fund distribution strategies held at the Crane Data Money Fund Symposium in Providence, RI in late August. We, however, think it brings out a salient point – growth for growth’s sake can be a recipe for disaster….
2 min readOn June 24, 2009, the Securities and Exchange Commission (SEC) announced the long-anticipated proposed amendments to the 2a-7 rule that regulates money market mutual funds. The proposed changes were prompted by the extraordinary events in the money fund industry that took place after the Reserve Primary Fund’s net asset value (NAV) dropped below a constant…
1 min readIt likely goes without saying that here at Capital Advisors Group we have been keeping a very close watch over the controversy that is heating up over the regulatory structure of money market funds. With the Obama Administration now stepping in to exercise its power to question and potentially modify SEC suggested changes to money…
1 min readIn our view, one of the most effective government programs enacted during the credit crisis, and likely the one that impacted Treasurers’ cash management strategies the most, was the temporary government guarantee program for money market funds. This one-year program, which is set to expire on September 18th of this year, has helped in large…