J.P. Morgan Asset Management is launching a new "ultra-short" money market fund, as well as what appears to be an "enhanced cash" fund. Standard & Poor's yesterday released new ratings on both JPMorgan Current Yield Money Market Fund (JCCXX) and JPMorgan Managed Income Fund (JMGSX). (A new rating normally means a fund launch is imminent.) S&P rated the former, whose SEC filing was mentioned in Crane Data's June 28 "Link of the Day", 'AAAm', and rated the latter, 'AAf/S1+'. While we've seen a handful of new entrants appear just beyond the outskirts of Rule 2a-7 (and more are undoubtedly on the way), Current Yield appears to be the unique in its apparent positioning as an ultra-short (under 10 day WAM) money fund (there have though been some pure "repo" money funds in the distant past).
S&P says, "The JPMorgan Current Yield Money Market Fund seeks to provide current income while maintaining liquidity and providing stability of principal. The fund is unique in that, under normal market conditions, it will maintain a maximum dollar-weighted average maturity of 10 days or less. Eligible investments include U.S. treasury obligations, federal agency obligations of the U.S. government, repurchase agreements, and debt securities issued or guaranteed by qualified U.S. and foreign banks, including certificates of deposit, time deposits, and other short-term securities. The Fund's credit quality is excellent, with more than 50% of the securities invested in 'A-1+' rated securities and the remainder in 'A-1' rated paper."
The ratings agency says of the Managed Income Fund, "The 'AAf' fund credit quality rating is based on our analysis of the credit quality of the Fund's eligible investments, the counterparties, and the Fund's investment managers' overall management. The 'AAf' fund credit quality rating signifies that the fund's portfolio holdings provide very strong protection against losses from credit defaults. As part of our volatility analysis, we assessed the management, portfolio-level risk, target durations, and comparable return strategies of the JPMorgan Managed Income Fund. The 'S1+' volatility rating signifies that a fund possesses extremely low sensitivity to changing market conditions, and an aggregate level of risk that is less than or equal to that of a portfolio comprised of the highest-quality fixed-income instruments with an average maturity of one year or less."
S&P adds, "The JPMorgan Managed Income Fund seeks to provide current income while maintaining a low volatility of principal. The Fund does not seek to maintain a net asset value of $1, and there is a risk of market fluctuation. Eligible investments include high-quality money-market instruments such as commercial paper, certificates of deposit, time deposits, deposit notes, corporate securities (including U.S. dollar issues of foreign corporations), asset-backed securities, U.S. treasuries (including strips and securities issued or guaranteed by the FDIC), agencies' foreign-government-guaranteed securities (U.S. dollar-denominated only), debt obligations of supranational organizations, repurchase agreements, and rule 144A securities. The Fund's benchmark is the BofA Merrill Lynch U.S. 3-Month Treasury Bill Index."
Finally, S&P says of JPMorgan, "J.P. Morgan Asset Management, one of the largest asset-management firms in the world, is the fund's investment adviser. As of June 30, 2010, the firm had more than $1.1 trillion in assets under management. In addition to this newly rated fund, J.P. Morgan Asset Management manages 10 'AAAm' rated funds, including the JP Morgan Prime Money Market Fund. The custodian for the Fund is JP Morgan Chase Bank, and JP Morgan Funds Management Inc. is the Fund's administrator."
