Western Switches Master, Feeder
Western Asset Management recently filed a Prospectus Supplement concerning changes in Western Asset Institutional Cash Reserves' master-feeder structure. (Note: Western is one of the few companies that have both "onshore" and "offshore" feeder funds into one "onshore" portfolio, and we believe this move was to split the constant NAV Cayman Islands feeder from the now-floating NAV domestic U.S. feeder.) The document states, "The Fund is a feeder fund that invests securities through an underlying mutual fund…that has the same investment objectives and strategies as the Fund, in what is called a master-feeder structure. The Board of Trustees of Prime Cash Reserves Portfolio has authorized the termination of Prime Cash Reserves Portfolio, which is expected to occur on or prior to August 31, 2016. In light of the upcoming termination of Prime Cash Reserves Portfolio, the Board of Trustees of the Fund believes that it is in the best interests of the Fund's shareholders to withdraw the Fund's investment from Prime Cash Reserves Portfolio and instead invest as a feeder fund in a different underlying mutual fund, Liquid Reserves Portfolio, on or about August 26, 2016." The document explains, "There will be no changes to the Fund's investment objectives and strategies as a result of the Fund becoming a feeder fund of Liquid Reserves Portfolio. The Fund will continue to operate as a money market fund investing in accordance with Rule 2a-7 under the Investment Company Act of 1940." Western adds, "As a feeder fund of Liquid Reserves Portfolio, the Fund's management fee will not increase, and the Fund's operating expenses are not expected to increase. Effective as of the Implementation Date, all references to Prime Cash Reserves Portfolio in the summary prospectus, statutory prospectus and statement of additional information are replaced with Liquid Reserves Portfolio." (Watch for more on Western Asset in a "profile" in the upcoming September issue of Money Fund Intelligence.) The New York Fed also wrote on its "Reverse Repo Counterparties List," "Western Asset/Institutional Cash Reserves Portfolio is no longer a reserve repo counterparty, effective August 30."
