Morgan Stanley Investment Management today announced the launch of a new "generally exempt from state income taxes" fund, Morgan Stanley Institutional Liquidity Funds: Government Securities Portfolio (MUIXX). The company says, "This portfolio invests in U.S. Treasury obligations and certain U.S. Government securities.... The portfolio will not invest in repurchase (repo) agreements."
Like other MSIM funds, Govt Securities has Institutional, Service, Investor, Administrative, Advisory, and Participant classes. The Inst class had a 1-day yield of 1.99% yesterday and does not have a 7-day yield yet. The fund's closing time is at 3:00 p.m. Morgan Stanley is the 12th largest manager of U.S. money market mutual funds with $90.8 billion in assets, according to our Money Fund Intelligence XLS.
Government Securities funds, as opposed to general "Government" money funds, will only invest in agencies such as FFCB (Federal Farm Credit Bank) and FHLB (Federal Home Loan Banks), and TVA (Tennessee Valley Authority), in addition to U.S. Treasury obligations. These funds will not invest in FHLMC (Freddie Mac), FNMA (Fannie Mae), or FMAC, which are normally taxed at the state level.
Other fund complexes use names like Government Tax Avdantaged (`AIM), Federal (BlackRock, Goldman), Govt Oblg Tax Managed (Federated), and Govt Prime (Dreyfus), to describe their offerings in the state-tax-free sector.
