This month in our flagship Money Fund Intelligence we interviewed Eduardo Prado, President & CEO of Irvine, Calif.-based Finacorp Securities, which launched the proprietary money fund trading portal Tradefunds earlier this year. We asked Ed about competing in the portal marketplace, about the government agency market, and about recent events in the money markets.
First we asked, "What led you to the money fund portal business?" Prado responded, "As a broker/dealer with institutional clients that invest in short term instruments, we saw the fund portal business as a natural extension of what we currently offer. We were also enlightened by many of our state, municipal and larger corporate accounts on the need to invest in money funds through a Minority Owned Broker Dealer. To date we are the only Hispanic Owned Broker Dealer to provide such a portal."
Q: What has been the key to the success of online money fund portals? He says, "The major key to online money fund portals is the efficiency that portals offer to investors in virtually every aspect of fund investing--research, execution, processing and reporting. Portals allow investors to efficiently research funds, for ratings, holdings, yield, etc. They offer the ability to easily diversify ones holdings. Now more than ever this has become a critical need in this very turbulent market. Portal investors typically have one wire, and one consolidated statement. In addition, a sound capable custodian is critical in the deployment of a money fund portal."
Q: What makes your portal different from others? Prado says, "For starters Tradefunds is unique in that it allows our clients' Treasury team to meaningfully contribute to enterprise diversity goals with a value-added, best practice investment solution--and via a product that they are (almost always) already using. By this I mean that our portal is owned and operated by Finacorp Securities, a certified MBE/DBE brokerage firm, as such our clients can gain related credits by using the platform. Our platform also offers a vast amount of funds; 25 different fund families and 80 different funds and is very easy to use. We are also the only portal that offers a short term money fund investment desk so that if you wish to invest in securities you can do so by communicating with our trading desk."
Finally, we asked, "Have portals contributed to the recent market volatility?" He tells us, "No. I believe that the money fund market will continue to evolve and become much more transparent and commoditized; portals are just part of this process. Q: Do you sell things other than money funds? Absolutely. For one thing, we're very active in the 2a-7 space across all taxable markets. Finacorp is the No. 1-ranked minority underwriter of agency securities, and many of our underwritings--both fixed rate and floating--are structured for the funds." See the October issue of MFI for the full interview.
