Whither money market funds?

http://www.cranedata.us/  – The source for Money Market Information –

Alright, Money market funds are “breaking the buck” or outright closing –

Reserve, Putnam, now American Beacon –

Will Government Back MFs? American Beacon To Suspend Redemptions

19Sep

 

In the midst of the now full-blown money fund meltownThe Wall Street Journal reportssome hopeful news, saying, “Investors pulled more cash out of money-market funds, prompting a second large fund to close to investors, amid concern that these onetime safe harbors are now too risky. In an effort to stem such withdrawals, the U.S. government Thursday night was working toward taking the unprecedented step of covering money-market funds with a variation of the federal deposit insurance provided to banks.”

Meanwhile, the carnage continues as 34th largest money fund manager, American Beacon Advisors, prepares to announce that it is temporarily suspending redemptions in its American Beacon Money Market Fund, which includes BBH Comset, Cash Mg, Inst, Mileage, MM PlanAh, and Select classes. The fund had been conservatively positioned and has not had any loss events, but assets nonetheless declined from $11.3 billion on Aug. 31 to $7.3 billion as of last night. The company hopes to return investors money in full following the temporary suspension. More to follow….

American Beacon, whose Select class was a top-decile performer in the Prime Institutional money fund space over 3-, 5-, and 10-years, becomes the third money fund complex to take the difficult decision to either halt redemptions or to drop its share price below $1.00 (“break the buck”). Reserve Primary Fund “broke the buck” on Tuesday, dropping to $0.97 a share. (Reserve International Liquidity Fund and Reserve Yield Plus have also “broken the buck”, but we don’t count these officially since the former is a non-SEC regulated “offshore” fund and the latter is an “enhanced cash” or ultra-short bond fund.) The company has since said it is no longer offering any of its funds for sale, and has implemented an up to 7 day delay in redemptions on all Reserve funds. Reserve’overall assets have plummeted from $84 billion as of Aug. 31 to $22 billion as of Wednesday.

In other news, see the New York Times article, “Money Market Funds Enter a World of Risk”, which contains a list of links at the bottom to various fund companies statements. Statements include: BlackrockColumbia ManagementEvergreen InvestmentsFederated InvestorsFranklin TempletonInvescoLegg Mason,Oppenheimer FundsPimcoSchwabState StreetT. Rowe PriceVanguard.

Finally, the Investment Company Institute’s weekly money fund asset series showed a record $169.03 billion decrease to $3.413 trillon in the week ended Sept. 17. (Numbers include the $60-plus billion drop in Reserve assets.) Retail money fund assets actually increased by $4.28 billion to $1.24 trillion, while Institional assets plunged $173.3 billion to $2.17 trillion. Note that we’ll be updating the daily asset flows from Thursdayonce our Money Fund Intelligence Daily is published around 9:30 a.m. Friday. Initial indications are that outflows slowed yesterday, but check back for the official numbers.

What are the largest Money Market Fund Families?

Source: Money Fund Intelligence:

 

   

Largest Money Market Fund Families

   

This table comes from Money Fund Intelligence XLS, and shows the largest money market fund families


   

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