Overview, strategy, and outlook: As of September 30, 2015On September 16, 2015, the Securities and Exchange Commission (SEC) approved amendments to Rule 2a-7 to remove references to credit ratings issued by Nationally Recognized Statistical Rating Organizations (NRSROs) and replace such references with a new standard of creditworthiness. Money market funds will be required to comply by October 14, 2016—the same date that institutional prime money market funds will convert to a floating net asset value (NAV).
Overview, strategy, and outlook: As of August 31, 2015In our last commentary, we wrote that Greece’s governing party rejected a five-month extension of its bailout package because it was contingent on additional austerity measures and capital controls. Instead, Greece would hold a referendum to allow its people to vote on a new bailout.
Overview, strategy, and outlook: As of June 30, 2015In late June, more than 500 industry professionals descended on Minneapolis for the seventh annual Money Fund Symposium, sponsored by Crane Data. This is the largest conference aimed at money market fund portfolio managers, credit analysts, investors, servicers, issuers of money market securities, and others involved in the money market fund industry.
Three steps to optimize short-term cashCash portfolios have been viewed as an asset class in their own right for several decades—certainly since 3-month Treasury bill rates reached the more-than-16% stratosphere in the early 1980s. With interest rates now at the other end of the spectrum—near 0% since the 2008 financial crisis—optimizing a cash portfolio remains an important responsibility of corporate treasurers and investment committees.
Overview, strategy, and outlook: As of May 31, 2015With the U.S. government having recently entered a debt-issuance suspension period, quietly financing its deficit operations using what are euphemistically called extraordinary measures, the debt ceiling is likely to remain a back-burner issue through the summer before heating up in the fall. Here we explore the issue in greater detail, providing lazy-summer beach reading while the issue simmers in the background.
Overview, strategy, and outlook: As of April 30, 2015The first part of April was an unusually heavy news cycle for repurchase agreements (repos). These sleepy, white-bread staples of the money markets typically get little press, let alone a spotlight focused on them. However, several events have conspired to bring them front and center.
Overview, strategy, and outlook: As of March 31, 2015The Federal Reserve (Fed) took another step in the first quarter toward normalization by taking forward guidance upstairs—worn out after its busy, useful day—and tucking it into bed. You’ll recall that forward guidance, initially in the form of a promise to keep rates low for an extended period of time, and lately in the form of the term patience, moved to the forefront of the Fed’s easy policy after asset purchases were tapered down to zero in 2014.
Overview, strategy, and outlook: As of February 28, 2015The Consumer Analyst Group of New York held its 51st annual conference February 16–20, at which leaders from some of the largest and most well-known brands in the consumer goods and food/beverage industries made presentations. Each speaker discussed the unique challenges the current environment presents as well as their company’s specific efforts to address those challenges. While several general themes emerged that will figure prominently in 2015, we’ll touch on three common themes here.
Overview, strategy, and outlook: As of January 31, 2015Repurchase agreements (repos) seemed to dominate the money market conversation during the month of January. If we weren’t speculating about the Federal Reserve (Fed) extending the testing of its reverse repurchase (RRP) facility or discussing what types of RRP testing the Fed might pursue in the new year, we were speculating ...
Overview, strategy, and outlook: As of December 31, 2014Based on pronouncements from last year, we entered 2014 fully expecting that the Federal Reserve (Fed) would begin to let up on the easy-money gas pedal by tapering its asset purchases gradually during the year, with an eye to ending them altogether in the last quarter; following that cycle, the Fed would then keep interest rates low ...
Overview, strategy, and outlook: As of November 30, 2014Since the Federal Reserve (Fed) began testing its Reverse Repurchase Agreement (RRP) facility in September 2013 until the beginning of November, the facility has undergone a number of changes, from varying the overnight rate within a range of 1 to 5 basis points (bps; 100 bps equals 1.00%) to increasing the per-counterparty limit from the initial $500 million to the current $30 billion ...
Overview, strategy, and outlook: As of October 31, 2014With the midterm elections right around the corner, we are nearing the height of campaign rhetoric. Given the focus on economic stratification in the past six years, it is not unusual for the issue of our tax structure to be an often-discussed focal point for politicians seeking reelection or those seeking to unseat a rival ...
Call replay - portfolio manager outlook: October 30, 2014Listen to David Sylvester, head of the Wells Fargo Advantage Money Market Funds, and Michael Bird, senior fund manager for the money market funds, as they provide their perspectives on the impacts of recent SEC and banking regulations and what these changes mean for the future of the money market fund industry.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.