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Crane Data, which produces largest annual gathering of money market professionals, Crane's Money Fund Symposium, and the "basic training" event, Money Fund University, announces the launch of its third event, and first international offering, Crane's European Money Fund Symposium. European Money Fund Symposium will be held at the Conrad Hotel in Dublin, Ireland on September 24-25, 2013, and will feature many of the world's foremost experts on "offshore" money market mutual funds. Registration, which is $1,000 USD (or 750 Euros), is now open and hotel reservations are now being accepted.
Our Peter Crane writes, "Dear Money Fund & Cash Investment Professional: I'm pleased to announce the launch of Crane's European Money Fund Symposium, Sept. 24-25, 2013, at The Conrad Hotel in Dublin, Ireland. Crane Data's U.S. Money Fund Symposium attracts the largest gathering of money fund professionals in the world, so we expect our inaugural European event to attract a robust crowd. We're now accepting registrations and hotel reservations, and are happy to discuss speaking and sponsorship opportunities."
He adds, "European Money Fund Symposium will offer money market portfolio managers, investors, issuers, and service providers a concentrated and affordable educational experience, as well as an excellent and informal networking venue. Our mission is to deliver the best possible conference content at an affordable price to money market fund professionals and investors. Attendee registration for Crane's European Money Fund Symposium is $1,000 (or E750). A block of sleeping rooms has been reserved at The Conrad Dublin. The conference negotiated rate of E179 single and E189 double are available through September 5th. We hope to see you in Dublin!"
The preliminary Day One Agenda for Crane's European Money Fund Symposium includes: "State of MMFs in Europe & IMMFA Update" with Jonathon Curry, Global CIO Liquidity, HSBC Global Asset Management; "Global Regulatory Issues: What's Next?" with Dan Morrissey, Partner & Head of Asset Management, William Fry and John Hunt, Partner, Nutter, McClennen & Fish; "Risks & Ratings: Areas of Concern" with Yaron Ernst, Managing Director, Moody's Investors Service; "Monitoring European & Offshore MFs" with Peter Rizzo, Managing Director, Standard & Poor's and Aymeric Poizot, Head of EMEA Fund Ratings, Fitch Ratings; "Major Issues in Euro Money Funds" with Jason Granet, MD & Head International Liquidity PM, Goldman Sachs Asset Mgmt and an as yet unnamed Portfolio Manager from J.P. Morgan Asset Management; "Major Issues in Sterling Money Funds" with Jennifer Gillespie, Head of Money Markets, Legal & General I.M. and Jonathan Curry, Global CIO Liquidity, HSBC Global Asset Management; "Major Issues in USD & US Money Funds with Debbie Cunningham, MM CIO, Federated Investors and Jennifer Yazdanpanahi, Head of EMEA Cash, SSgA; and, "MMFs in Asia & Emerging Markets" with Peter Crane, President & Publisher, Crane Data and Andrew Paranthoiene, Director, Standard & Poor's.
The Day Two Agenda includes: "Dublin as a Domicile for Money Market Funds" with Pat Lardner, Chief Executive, Irish Funds Industry Association; "Distribution Panel: New Markets & Concerns" with Rich Boyd, Sr. VP & Head of Business Development, Federated Intl Management Ltd, Jim Fuell, Head of Global Liquidity, EMEA, J.P. Morgan Asset Management; and Kathleen Hughes, Global Head of Liquidity Sales, Goldman Sachs A.M.; "Dealer Update & Supply Discussion" with Kieran Davis, European Head of ST Trading, Barclays, Jean-Luc Sinniger, Director, Citi Global Markets and David Hynes, Partner, Northcross Capital LLP; "From the Regulators Perspective" Bank of England, EU Regulator (Invited); "Portal Panel: Beyond MMFs & Transparency" with Justin Meadows, Chief Executive, MyTreasury, Greg Fortuna, MD, State Street's Fund Connect, and Maryum Malik, Director of Business Development, SunGard; "Back Office Briefs: Accounting & Servicing"; and "Portfolio Manager Roundtable & Open Talk."
Sponsors to date of the event include: Moody's Investors Service, Federated International, J.P. Morgan Asset Management, State Street Global Advisors, MyTreasury, Standard & Poor's. Sponsorship levels are $3K, $4.5K, $6K, and $7.5K, and limited speaking opportunities remain. Visit www.euromfs.com or contact us for more details.
Finally, preparations are being made for Crane Data's flagship event, Money Fund Symposium (www.moneyfundsymposium.com), which will take place June 19-21, 2013, at The Baltimore Hyatt Regency. We expect over 400 money fund managers, marketers and professionals, money market securities dealers and issuers, servicers and cash investors of all stripes. We hope to see you in June in Baltimore!
The January issue of Crane Data's Money Fund Intelligence newsletter, which will be e-mailed to subscribers later this morning, will announce the winners of our MFI Awards, a designation given to the top-performing money market mutual funds for 2012. We also review recent fund news in the article, "Consolidation & Liquidations, Asset Rebound & FSOC Outlook," and feature the profile, "Dechert's Vartanian Says FSOC Jumping the Gun" in our new edition. Finally, we've updated our Money Fund Wisdom database query system with Dec. 31, 2012, performance statistics and rankings, and our MFI XLS will be sent out shortly. (Our Dec. 31 Money Fund Portfolio Holdings are scheduled to go out on Thursday.)
Our piece, "Top MMFs of 2012; Our 4th Annual MFI Awards," says, "In this issue, we once again recognize some of the top-performing money funds, ranked by total returns, for calendar 2012, as well as the top-ranked funds for the past 5-year and past 10-year periods. We present the following funds with our annual Money Fund Intelligence Awards. (See the table on page 6 of MFI for the table with the winners.) These include the No. 1-ranked funds based on 1-year, 5-year and 10-year returns, through Dec. 31, 2012, in each of our major fund categories (our "Type") -- Prime Institutional, Government Institutional, Treasury Institutional, Prime Individual, Government Individual, and Treasury Individual."
MFI says, "The top-performing Taxable funds overall in 2012 and among Prime Institutional funds was Reich & Tang Natixis Liq Prm Port Treas (LQTXX), which returned 0.25%. Among Prime Retail funds, Flex-funds Money Market Retail (FFMXX) again had the best return in 2012 (0.10%). American Beacon US Govt Select (AAOXX) won the Top Government Institutional fund over a 1-year period with a return of 0.09%, while Selected Daily Govt Fund S (SDGXX) won the MFI Award for Government Retail Money Funds (1-year return). BlackRock Cash Treas MMF Inst (BRIXX) ranked No. 1 in the Treasury Institutional class, and Invesco Treasury Private (TPFXX) ranked tops among Treasury Retail funds.
We say about the "Top Funds Over Past Five Years," "For the 5-year period through December 31, 2012, Touchstone Inst MF again took top honors for the best-performing money fund with a return of 1.01%. Fidelity Select MM Port ranks No. 1 among Prime Retail funds with an annualized return of 0.78%. Goldman Sachs FS Govt In (FGTXX) again ranked No. 1 among Govt Institutional funds, while Selected Daily Govt Fund D (SGDXX) ranked No. 1 among Treasury Retail funds over the past 5 years. Vanguard Admiral Treasury ranked No. 1 in 5-year performance among Treasury Institutional money funds, and Invesco Treasury Priv ranked No. 1 among Treasury Retail MM funds."
On the "Best Money Funds of the Decade," MFI comments, "The highest-performers of the past 10 years include: DWS Daily Assets Fund Inst (DAFXX), which returned 2.04% (No. 1 overall and first among Prime Inst); Fidelity Select MM Portfolio (FSLXX), which returned 1.87% (the highest among Prime Retail); American Beacon US Govt Select (AAOXX), which returned 1.85%, (No. 1 among Govt Inst funds); and, Vanguard Federal Money Market Fund (VMFXX), which ranked No. 1 among Govt Retail funds (1.76%). Milestone Treasury Obligs Fin (MIL01) returned the most among Treasury Institutional funds over the past 10 years; and, Goldman Sachs FS Trs Obl Sel (GSOXX) ranked No. 1 among Treasury Retail funds."
MFI's Awards piece adds, "See our additional rankings tables on pages 9-11, and see our Money Fund Intelligence XLS for more detailed listings, percentiles, and rankings. Look for more details in coming days on the website too (www.cranedata.com). Winners will receive a letter and certificate stating their No. 1 ranking and the criteria used. The table below shows the No. 1 ranked money funds for each category based on 1-year, 5-year, and 10-year annualized total returns." Watch for more excerpts from MFI and more awards in coming days.
Today, we excerpt from the latest issue of Crane Data's Money Fund Intelligence newsletter, which features the monthly "profile" article, "Vanguard's David Glocke: Low Expense Is Our Alpha." It says: This month, we interview Vanguard Group Portfolio Manager and Principal David Glocke, who has been managing money funds for 20 year, 15 of them at Vanguard. The fourth largest money fund manager, with $161 billion, runs the flagship Vanguard Prime Money Market Fund, which opened in 1975, and the money fund management team also includes John Lanius on the taxable side and Pam Tynan and John Carbone on the municipal side. Below, we discuss ultra-low rates, portfolio holdings, and recent developments in the money fund space.
MFI: What is your biggest challenge? Glocke: The low interest rate environment is certainly a challenge, especially for savers. Everybody still wants to know, 'When do you think rates are going to move back up again?' The nice part is that the money funds remain well supported in the marketplace. You haven't seen this massive exodus from money markets. People are still very supportive of the product, believe in it and believe in the team behind it, too. The regulatory environment is also a challenge. There's obviously a degree of uncertainty, which creates concern on the part of investors. That said, investors remain confident and committed to the product.
MFI: How about the challenges historically? Glocke: We hear from peers that the biggest problem is trying to find names in the market. We have a different view of the world, and maybe it's easier to do at Vanguard. But you realize, over time, that conditions change. You go back 20 years or longer and consider the credits we used to buy in a portfolio -- General Motors, Ford, and all the finance companies, as well as a number of European issuers, European banks, etc. The list was considerably smaller. Over time, the dynamics changed. We have seen some asset classes grow rather large and subsequently fall off. But in the money market space, there are always assets out there to take advantage of.
In particular, you look at our funds today, and we maintain a heavy weightings in U.S. Treasuries and Agency securities. The agency space is getting smaller. But we still find plenty to buy, and we can't argue with going out and buying Treasury securities. We still think there is value, certainly from a liquidity perspective and a credit quality perspective. They remain an important element in the portfolio, and with the change in the S.E.C. rules that encourage higher degree of liquidity in the portfolios, we prefer to do that in the U.S. Treasury space than maybe in some other asset classes.
We've diversified into other areas in the last 3 years. The municipal component has grown in the fund. We think there are opportunities in that market, given their rate structure. Today, it makes sense maintain a muni component from a yield perspective. From the credit perspective, it's a different story. However, Vanguard has a deep team of municipal credit analysts that we can rely on to make the right decision about which securities to put in a portfolio.
MFI: Do you have any lessons learned from the crisis? Glocke: There are some big picture issues that we sit back and thank our lucky stars for. Vanguard has had some prudent policies in place, such as refusing hot money, not having large concentrations from individual investors, etc. When I came on board here 15 years ago, these guardrails were new. But I understood Vanguard's purpose for such policies, and these long-term policies that Vanguard had in place saved the day during the 2007-08 period. We didn't have the volatility that others experienced.
MFI: What kept you away from SIVs? Glocke: The philosophy at Vanguard was the asset-backed commercial paper market had attractive options. But we wanted to limit our exposure to, initially, the programs that had large sponsors behind them. We also wanted to make sure that there was 100% liquidity behind the program, so it didn't rely on asset sales like the SIV market. We wanted multiple sources of underwriting, more well-diversified sources. We are conservative by nature, so we avoided the landmines like SIVs and securities arbitrage-type programs.
MFI: What are you buying or avoiding? Glocke: Our asset-backed exposure is pretty small. Straight-A is probably one of the bigger ones, on average, but it is a fairly small exposure.... We made a choice about the European situation back in 2010. Like everybody else. we had bank exposure throughout Europe. With the start of all the concern about the European periphery, we decided to cut our exposure. Throughout the course of 2010, the frustration with the European body not being able to tackle the problem made us really concerned, so we walked away from our French bank exposure.
We are early responders to problems. We don't wait for them to happen. We try to anticipate where things are going and adjust the portfolio accordingly. In 2011, for example, we had limited exposure to the northern Europeans, U.K. banks, etc. That became a problem in late summer. As the European situation eroded further, we concluded it was best to get completely out of the sector. All of our direct bank exposure to Europe was eliminated by the end of 2011, and we haven't had any direct exposure to the European banks since. (Look for more excerpts from our Vanguard "profile" in coming days or contact us to request the latest issue of MFI.)
The October issue of Crane Data's Money Fund Intelligence was sent to subscribers Friday morning, along with our September 30, 2012 monthly performance data and rankings. Our Money Fund Wisdom database query website was also updated, and our Money Fund Intelligence XLS monthly spreadsheet, and Crane Index money fund averages were released. (Our next monthly Money Fund Portfolio Holdings with 9/30/12 data are scheduled to be released on the 7th business day, Wednesday, Oct. 10.) The latest edition of MFI features the articles: "MMF Reform Undead: Geithner Urges FSOC to Rise," which discusses the possible revival of regulations; "Vanguard's David Glocke: Low Expense Is Our Alpha," which interviews the veteran portfolio manager of Vanguard Prime Money Market Fund; and, "Gating Gains Momentum: BlackRock's SLF Breaker," which reviews a new "way forward" for money fund reform.
Our MMF Reform Undead piece comments, "Following the SEC's decision to withdraw a vote on reforming money market funds, the issue seemed dead, or at least in the critical ward. But last week, U.S. Treasury Secretary Timothy Geithner reopened the issue, sending a letter to members of the Financial Stability Oversight Council.."
Geither wrote, "I urge the Council to use its authority under section 120 of the Dodd-Frank Act to recommend that the SEC proceed with MMF reform. To do so, the Council should issue for public comment a set of options for reform to support the recommendations in its annual reports. The Council would consider the comments and provide a final recommendation to the SEC, which, pursuant to the Dodd-Frank Act, would be required to adopt the recommended standards or explain in writing to the Council why it had failed to act. I have asked staff to begin drafting a formal recommendation immediately and am hopeful that the Council will consider that recommendation at its November meeting."
Our monthly "profile" of says, "This month, we interview Vanguard Group Portfolio Manager and Principal David Glocke, who has been managing money funds for 20 year, 15 of them at Vanguard. The fourth largest money fund manager, with $161 billion, runs the flagship Vanguard Prime MMF, which opened in 1975, and the money fund management team also includes John Lanius on the taxable side and Pam Tynan and John Carbone on the municipal side. Below, we discuss ultra-low rates, portfolio holdings, and recent developments in the money fund space."
Glocke says of his biggest challenge, "The low interest rate environment is certainly a challenge, especially for savers. Everybody still wants to know, 'When do you think rates are going to move back up again?' The nice part is that the money funds remain well supported in the marketplace. You haven't seen this massive exodus from money markets. People are still very supportive of the product, believe in it and believe in the team behind it, too. The regulatory environment is also a challenge. There's obviously a degree of uncertainty, which creates concern on the part of investors. That said, investors remain confident and committed to the product."
Our Gating article says, "BlackRock recently published a white paper entitled, "Money Market Funds: A Path Forward," which criticizes the money market fund reform options championed by SEC Chairman Mary Schapiro and which proposes a new "circuit breaker" or "standby liquidity fee" (SLF) option as a reform solution. A "gating" or "toll" option has gained momentum following its mention by SEC Commissioners Gallagher and Paredes in their Aug. 28 letter, and following Treasury Secretary Tim Geithner's mention in his letter to the FSOC last week."
The October MFI also contains monthly News, Indexes, top rankings and extensive performance tables. E-mail firstname.lastname@example.org to request the latest issue. Subscriptions to Money Fund Intelligence are $500 a year and include web access to archived issues and fund "profiles". Additional users are $250 and bulk pricing and "site licenses" are available. Crane Data's other products include: Money Fund Intelligence XLS ($1K/yr), MFI Daily ($2K/yr), Money Fund Wisdom ($4K/yr), MFI International ($2K/yr), and Brokerage Sweep Intelligence ($1K/yr).