Deutsche Bank reported earnings earlier this week and noted "an impairment charge related to DWS Scudder and injections into money market funds" in their conference call and earnings release. During the Q&A, Chairman Josef Ackermann responded to a Bloomberg reporter's question asking about "substantial injections into money market funds" by saying, "We gave some guidance about yield [on these funds]," implying that these were non-U.S. money funds. We confirmed with DB Advisors Managing Director Joe Sarbinowski that, "No Rule 2a-7 money market funds were involved." The injections involved European products that pledge to return a stated interest rate we were told. More details on DB's earnings and the European "fund injections" will be given when the bank releases its official results on February 5.
Beyond the U.S., strict regulation defining the term "money market mutual fund" is scarce. Money market funds in the States must abide by strict quality, maturity, and diversity standards, which are known as "Rule 2a-7" (of the Investment Company Act of 1940). In France, Germany and elsewhere, however, you'll often find products that are more akin to stable value funds or ultra-short bond funds termed "money market funds". Worldwide, the ICI estimates that "money market mutual fund" assets total $5.6 trillion.
As we wrote last May, DB Advisors was the first U.S. money market fund complex to participate in Clearwater Analytics "Money Fund Transparency" initiative (see our story, "DB Advisors, Clearwater Going Live With Fund Transparency Initiative"). To see DWS Money Market Series' (ICAXX) information on the Clearwater platform, click here.
