Fidelity Investments, the country's largest money fund manager with over $500 billion, Federated Investors, the third-largest with almost $315 billion, and Invesco AIM joined the growing list of fund companies confirming their renewed participation in the U.S. Treasury Temporary Guarantee Program for Money Market Funds. While these companies, and the industry as a whole, continue to cover Prime and Tax-Exempt money funds with the insurance, Fidelity and AIM dropped coverage on Government and Treasury funds, while Federated dropped coverage on just Treasury funds. The only company to decline to renew coverage to date is Credit Suisse, which is liquidating its money funds (see filing).
Fidelity's press release, entitled, "Fidelity Investments Extends Participation for Certain Money Market Funds in U.S. Treasury Temporary Guarantee Program" says, "Fidelity Investments and the Board of Trustees of Fidelity's money market funds have determined that Fidelity's general purpose taxable and tax-exempt money market funds will continue to participate in the U.S. Treasury Department Temporary Guarantee Program for Money Market Funds for the duration of the program, which ends on September 18, 2009. Fidelity money market funds that invest primarily in U.S. Government and Treasury securities will not participate in the program beyond April 30, 2009."
The Fidelity release continues, "Under the program, the U.S. Treasury will guarantee the share price of any publicly offered eligible money market mutual fund that applies for and pays a fee to participate in the program. The coverage applies only to investments held in participating money market funds as of the close of business on September 19, 2008. On March 31, 2009, the U.S. Treasury announced a final extension of the program until September 18, 2009, for those funds that elect to continue to participate in the guarantee program. The program will continue to only provide coverage to shareholders for the lesser of either the number of shares held as of the close of business on September 19, 2008, or the amount held on the day that a guarantee event occurs. If a shareholder closes his or her account, any future investment in the fund will not be guaranteed."
Fidelity says, "Our funds continue to invest in money market securities of high quality, and our customers continue to have full access to their investments any time they wish. Most importantly, we have been proactive in keeping our money market funds safe and in protecting the $1.00 net asset value (NAV), which has always been our No. 1 objective in managing these funds. That's what our clients and customers expect from us, and what we continue to be dedicated to providing for them."
As we wrote previously -- see Crane Data's April 9 News, "Treasury Money Funds, Most Govt, Dropping Temporary Guarantees" -- almost all Treasury money market funds, and many Government money market funds, will decline continued participation but virtually all Prime and Tax-Exempt money funds are expected to sign up. We should have a full list of participants by Tuesday night's deadline, which we will make available to subscribers of Money Fund Intelligence.
