A Prospectus Supplement for "UBS Select ESG Prime Institutional Fund indicates that UBS is the latest to exit the "ESG" money market fund space, following departures by Morgan Stanley and SSGA. It says, "The purpose of this supplement is to update certain information for UBS Select ESG Prime Institutional Fund, a series of UBS Series Funds. First, at the recommendation of UBS Asset Management (Americas) Inc., the fund's investment adviser, the Board of Trustees of the Trust approved (i) a change to the fund's name to 'UBS Select Prime Series II Institutional Fund', (ii) a change to the fund's investment objective such that the fund's investment objective will be to earn maximum current income consistent with liquidity and the preservation of capital, (iii) the elimination of the fund's '80% policy', (iv) related changes to the fund's principal investment strategies and (v) related changes to the fund's principal risks. In addition, the Board of Trustees of Master Trust approved corresponding changes to the name, investment objective, '80% policy', principal investment strategies and principal risks of ESG Prime Master Fund, the underlying master fund through which the fund invests its securities. The Investment Policy Changes and the Master Fund Changes are expected to become effective on or about December 18, 2023."
The filing continues, "Second, at the recommendation of UBS AM, the Board approved an Agreement and Plan of Reorganization providing for the acquisition of the assets and liabilities of the fund by UBS Select Prime Institutional Fund, also a series of the Trust. The Agreement and Plan of Reorganization sets forth the terms by which the fund will transfer its assets and liabilities in exchange for shares of the Acquiring Fund, followed by the distribution of shares of the Acquiring Fund to the shareholders of the fund and the complete liquidation of the fund."
UBS writes, "After the Reorganization is consummated, shareholders of the fund will become shareholders of the Acquiring Fund. The Reorganization is intended to be tax free, meaning that shareholders of the fund will become shareholders of the Acquiring Fund without realizing any gain or loss for federal income tax purposes."
They add, "Finally, at the recommendation of UBS AM, the Board has determined to close the fund to new investments, including purchases from new investors, additional purchases from existing investors and purchases for exchange from other funds by investors. Automatic reinvestment of dividends by existing shareholders will continue during this closure, and such shareholders will continue to be able to exchange or redeem their shares in accordance with the policies in the fund's prospectus. The closing of the fund to new investments is effective as of December 18, 2023."
The supplement also states, "UBS Select Prime Series II Institutional Fund is classified by UBS AM as an 'ESG integrated' fund. UBS Select Prime Series II Institutional Fund's investment process integrates material sustainability and/or environmental, social and governance ('ESG') considerations into the research process for all portfolio investments and portfolio holdings, except repurchase agreements with certain counterparties. ESG integration is driven by taking into account material sustainability and/or ESG risks which could impact investment returns, rather than being driven by specific ethical principles or norms."
It says, "The analysis of material sustainability and/or ESG considerations can include many different aspects, including, for example, the carbon footprint, employee health and well-being, supply chain management, fair customer treatment and governance processes of a company. UBS Select Prime Series II Institutional Fund's portfolio managers may still invest in securities without respect to sustainability and/or ESG considerations or in securities which present sustainability and/or ESG risks, including where the portfolio managers believe the potential compensation outweighs the risks identified."
For more on ESG see these Crane Data News stories: "Morgan Stanley Latest to Abandon ESG MMFs" (8/16/23), "ESMA, FSB Push European Money Fund Reforms; New HSBC ESG Euro MF" (3/27/23), "Morgan Stanley Names OFN Beneficiary of Impact Shares; ESG to Retail" (10/27/22), "SSGA to Liquidate State Street ESG Liquid Reserves" (9/19/22), "ESG Cash Investments Still Minor Says AFP Liquidity Survey, 6% Over 10%" (6/29/22) and "SEC Names Rule Proposal Could Impact or Ban ESG, Social Money Funds" (6/3/22).
In other fund change news, another SEC filing for JNL Investors Series Trust announces the "Dissolution of JNL Securities Lending Collateral Fund. It tells us, "At its meeting on August 31, 2023, the Board approved the dissolution of the JNL Securities Lending Collateral Fund, a series of JNL Investors Series Trust, effective September 30, 2023. The Board approved the dissolution of the Fund pursuant to the Trust's Amended and Restated Declaration of Trust which provides that the Board may approve the dissolution of a fund when such fund has no shares outstanding."
For more on fund liquidations, see these Crane Data News articles: "JPMorgan Liquidates E*Trade Shares" (9/7/23), "Morgan Stanley Latest to Abandon ESG MMFs" (8/16/23), "Goldman Liquidating Resource Shares" (7/19/23), "SSGA to Liquidate State Street ESG Liquid Reserves" (9/19/22), "DWS Liquidating Govt Cash Mgmt Fund" (7/7/22) and "Cavanal Hill Liquidates $71M U.S. Treasury Service Class, Added to Fed RRP List" (5/22/23).
