This article is excerpted from the July issue of Money Fund Intelligence. As most are aware by now, the trend towards online money market trading "portals" has been one of the major new developments in money fund investing over the past decade. While many of the early portals focused on fund lineups and trading, a second wave of entrants is adding compliance, reporting, and fund transparency in order to create a more efficient user experience. A major driver behind this latest wave of technology is Denver-based Cachematrix.
Cachematrix now "powers" custom trading solutions for 10 different money fund portals, and is preparing to launch at least two more trading systems in coming months. Managing Director Jim Etten tells us, "Cachematrix now provides portfolio holdings reports alongside existing monthly fact sheets, prospectuses, SAI's, annual and semi-annual reports, as well as other critical money fund information." On frequency, Etten says most portfolio holdings ("over 90%") are updated monthly, but some are twice monthly and some are quarterly.
On technology, Etten says, "Our software is built and deployed in a modular fashion. When we sit down and talk to a prospect, they can build systems based upon the software modules that are needed for their client base.... In addition, once a system is built, Cachematrix provides the hosting, data security and the necessary software upgrades to meet the ever increasing market needs.... Over the last couple of years, we've built up our inventory of software modules." These include "a Compliance Trading module, Future Dated Trading, Dual Authorized Trading, Portfolio Analytics, and Batch Trading modules.
How did Cachematrix come about? Etten says, "Well it started with Comerica. Financial institutions were seeking a competitive advantage in growing and retaining their corporate client base and, especially with Sarbanes Oxley, corporate demand for portals was heating up. Banks were calling us and saying, 'Would you be interested in doing a white label of this technology as we need it for our client base?' We looked at the market and set our goal to become the leading technology provider in the space. We still see tremendous growth in this market."
"For mutual fund families, specifically those that have not yet built a system, it's a costly proposition to build internally from scratch. Over the years we have developed the infrastructure and experience to deploy and continually upgrade the software needed for these firms, and in most cases we can do it in half the time and for half the costs they would incur themselves. We definitely have found our niche in the market." Etten says. Contact Pete to request a copy of the full MFI article.
