Recent SEC filings reveal yet another batch of smaller money funds that have switched from Prime to Government, including Great West, Columbia, and ProFunds. Further, Rydex updated the investment strategy for its Rydex Variable Trust US Government Money Market Fund, while PNC reduced the fees on its PNC Treasury Money Market Fund. To date, Crane Data has tracked $274.6 billion in Prime funds that have converted to Government. The $950 million Great West Money Market Fund is the latest fund to "go Government." Its SEC filing says, "Effective October 14, 2016, the Fund intends to: (1) operate as a government money market fund in connection with the amendments adopted by the U.S. Securities and Exchange Commission to Rule 2a-7 and other rules governing money market funds under the Investment Company Act of 1940, as amended, and (2) change its name to "Great-West Government Money Market Fund"."
The Great West filing adds, "Accordingly, at a meeting held on February 25, 2016, the Fund's Board of Directors approved the adoption of: (1) a non-fundamental investment policy requiring the Fund to invest 99.5% or more of its total assets in cash, government securities, and/or repurchase agreements that are collateralized fully by cash and/or government securities; and (2) revisions to the Fund's principal investment strategy, requiring the Fund to invest 99.5% or more of its total assets in cash, government securities, and/or repurchase agreements that are collateralized fully, as of Effective Date."
Columbia will also transition its $456 million Columbia Variable Portfolio: Cash Management Fund to a Government fund. The Columbia filing says, "In connection with amendments to the rules that govern money market funds, the Board of Trustees of the Fund approved changes to the Fund's name and investment policies to allow the Fund to qualify and operate as a government money market fund effective on or about May 1, 2016. Accordingly, on the Effective Date the Fund's name will change to Columbia Variable Portfolio - Government Money Market Fund and all references in the prospectuses to Columbia Variable Portfolio - Cash Management Fund are deleted and replaced with Columbia Variable Portfolio - Government Money Market Fund."
It continues, "As of the Effective Date, the information under the caption "Principal Investment Strategies" in the "Summary of the Fund" or "Summary of Columbia VP - Cash Management Fund" section is hereby superseded and replaced with the following: The Fund invests at least 99.5% of its total assets in government securities, cash and/or repurchase agreements collateralized by government securities or cash." In our Nov. 18, 2015 News we reported, "Columbia Threadneedle Going Govt; Dreyfus Details MF Moves; Deutsche," on Columbia converting its $1.5 billion Columbia Money Market Fund into a Govt MMFs.
Further, the ProFund VP Money Market Fund and the Money Market ProFund are both going Government, according to recent filings. A March 14 SEC filing for the $241 million ProFund VP MMF states, "The ProFund VP Money Market will begin operating as a government money market fund on or about May 2, 2016. The Fund will change its name to "ProFund VP Government Money Market." The Fund's Board of Trustees has adopted a non-fundamental policy, effective May 2, 2016, to invest at least 99.5% of the Fund's total assets at the time of investment in cash, U.S. government securities, and/or repurchase agreements that are collateralized by these instruments. The Fund intends to gradually transition its investments and allocate a larger percentage of its assets to government securities over time until it reaches its new target allocation."
A Feb. 1 SEC filing for the $331 million Money Market ProFund says, "At a shareholder meeting held on January 28, 2016, shareholders of the Money Market ProFund voted to approve changes to the investment policies of the Fund that will enable the Fund to operate as a government money market fund. Shareholders of the Cash Management Portfolio (the "Portfolio"), the master portfolio in which the Fund invests substantially all of its assets, approved a nearly identical proposal on the same day. As a result, the Portfolio intends to gradually transition its investments and allocate a larger percentage of its assets to government securities over time until it reaches its new target allocation."
The ProFund filing adds, "The Fund, as a feeder fund investing substantially all of its assets in the Portfolio, will consequently also have its underlying investments reallocated to government securities. The Fund and Portfolio intend to complete this transition and begin operating as government money market funds in early May 2016." The Master Portfolio, Deutsche Govt Cash Management Portfolio, announced that it was going Government last summer, as we reported in our July 21, 2015 News, "Deutsche Announces Reform Plans, Will Convert Most Prime MFs to Govt."
Also, Rydex Variable Trust US Government Money Market Fund changed the description of its investment strategy to meet the new requirements for Govt MMFs. The Rydex filing says, "In response to recent amendments to Rule 2a-7 under the Investment Company of 1940, the Board of Trustees of Rydex Variable Trust approved changes to the U.S. Government Money Market Fund's principal investment strategies to facilitate the Fund's operation as a "government money market fund." Under amended Rule 2a-7, a government money market fund is a money market fund that invests at least 99.5% of its total assets in U.S. government securities, cash, and/or repurchase agreements that are fully collateralized by U.S. government securities or cash."
It continues, "Effective on or about May 1, 2016, the current description of the Fund's "Principal Investment Strategies" will be deleted in its entirety and replaced with the description set forth below. In connection with the changes to the Fund's principal investment strategies, the Board also approved a change to the Fund's non-fundamental 80% investment policy adopted pursuant to Rule 35d-1. The revised non-fundamental 80% investment policy is reflected in the description below."
Finally, PNC filed to lower the fees on the $542 million PNC Treasury MMF. The filing states, "Effective February 26, 2016 the Board of Trustees of PNC Treasury Money Market Fund approved a reduction in the Fund's Management Fee from 0.25% of the Fund's average daily net assets to 0.15% of the Funds average daily net assets. Due to, among other things, the recent low interest rate environment, PNC Capital Advisors, LLC has been waiving a portion of its Management Fee over recent periods so that the Fund has not recently paid a Management Fee greater than 0.15%. Accordingly, this change in the Fund's contractual management fee rate is not expected to have a short-term effect on the Fund's net expense ratio."
