UK Treasury website GTNews.com unveiled a barrage of articles written by European money market mutual fund providers, portals and participants. While we hope to cover some of the worthier pieces in more detail in coming days and in our next Money Fund Intelligence, for now we list a summary of highlights from some of the articles below.
First, Kathleen Hughes of JPMorgan Asset Management writes in "Short-term Investors Get Smart," "The problems in the financial markets over the last year have seen money market funds become the short-term investment instrument of choice. But this spotlight has also meant that they have come under more scrutiny and investors are asking more questions about these funds." Hughes explains, "`The strategies that have benefited most from the past year's market dislocation have been short-term bank deposits, government securities and AAA-rated, stable net asset value (NAV) money market funds (MMFs)."
Next, Kevin Thompson of Fidelity International writes, "Money Market Funds Weather the Credit Storm," explains, "One certainty for treasurers in these trying markets was that treasury-style money market funds (MMFs) stood firm. Ever since the market turbulence began in earnest last summer, a wide range of investors have sought refuge in MMFs. The general flight to quality in the credit markets over the last six months has led to relatively higher yields for these funds. MMFs are investments that attract the highest credit and liquidity ratings from rating agencies, since the fund managers only invest in short-term highly rated securities such as certificates of deposit, commercial paper and government bills. Corporate treasurers are the dominant class of investors in these funds but other institutions are also catching on. A wide variety of investors from local authorities to hedge funds are using liquidity funds as places to park their short-term un-invested cash."
Invesco's Karen Dunn Kelley writes, "Money Market Funds Evolving from Market Turmoil," who says, "[W]e were flooded with shareholder calls from corporate treasurers and other institutional investors trying to understand what was in their MMF and with concerns about the liquidity in the marketplace. Corporate treasurers have invested in MMFs for years and have not had to be concerned or answer questions regarding the composition or the safety of their money market investments."
Other pieces include: "Cash Management Perspectives on Short-term Investments, by David Rothon of Northern Trust, "Harnessing Technology to Simplify Investment Decisions" by Basak Toprak on Citi's portal, "Investing Through the Liquidity Crisis" by Kirk Black on The Bank of New York Mellon's portal, "Managing Corporate Cash Reserves During Turbulent Times by Alain Kerneis of Goldman Sachs Asset Management, and "Post Sub-prime: The Impact on Treasurers Managing Liquidity" by Francois Masquelier of The European Association of Corporate Treasurers (EACT).
Finally, Ben Poole of GTNews adds a section summary with "Short-term Investment Strategies for Treasurers."
