STF Fund Closes: Update on Common Fund
One of the oldest bank STIF funds, or Short-Term Investment Funds (not a "money market fund"), The Common Fund, has closed and is liquidating. See link: STF Fund Closes: Update on Common Fund.) Their website says, "Commonfund and investors in the Short Term Fund received notice on Monday, September 29th from Wachovia Bank, in its capacity as Trustee of the Short Term Fund, of its decision to initiate the termination of the Short Term Fund, to stop accepting deposits, to establish procedures for an orderly liquidation and distribution of the fund's assets and to resign as Trustee of the Short Term Fund." It is described, "The Short Term Fund has existed as a liquidity vehicle offered solely by Commonfund to colleges, universities and private secondary schools since 1974. As of the close of business on Friday, September 26th, the STF managed assets of approximately $9.3 billion on behalf of about 1000 clients. The fund is structured as a bank common trust with Wachovia Bank." A transcript of a recent conference call discussing the closing says, "Recall that unlike 2a-7 money market funds, the STF is a mark to market fund and thus susceptible to the impact of price volatility." The Fund will hold another call Thursday, Oct. 2 at 1pm. Click here (go to bottom) for details. See also: "Moody's Investors Service today downgraded the rating of SFT Collective Investment Fund from Aaa/MR1+ to Ba/MR1+; and rating is also being withdrawn, "Reserve Fund Losses to Be Spread Among More Investors," "Money Funds Seek Insurance," and Kiplinger.com's "Is Your Money-Market Fund Still Safe?".
