American Funds, one of the country's largest managers of stock mutual funds but just the 22nd largest manager of money funds with $25.5 billion, has filed to launch a new money market mutual fund. The Capital Research & Management-advised company's current lineup includes the $19.4 billion American Funds Cash Mgmt MFoA (CTAXX, 0.49% expense), the $5.1 billion American Funds US Treas MFoA (UTAXX, 0.48% exp.), and the $955 million American Funds Tax-Ex MFoA (TEAXX, 0.47% exp.). The new fund, American Funds Money Market will include an institution share class (A) charing just 0.15%, as well as 15 other higher-priced classes.
The fund appears to be a rare hybrid of a Treasury and a Prime fund offering. According to the filing (on Strategic Insight's SimFundFiling, under "Principal investment strategies," it says, "The fund invests substantially in U.S. Treasury securities, which are guaranteed by the United States government, federal agency discount notes and high-quality money market instruments, such as commercial paper, commercial bank obligations, savings association obligations and short-term corporate bonds and notes."
In other SEC EDGAR filing news, Strategic Insight reports that, "Columbia, JPMorgan, Morgan Stanley, PFM Asset Management, Reich & Tang, SunAmerica, and Wells Fargo funds add investment in securities guaranteed under the FDIC's Temporary Liquidity Guarantee Program." The PFM filing says under "FDIC Temporary Liquidity Guarantee Program," "Under the TLGP Program, the FDIC guarantees the payment of principal of and interest on securities issued by private entities participating in the TLGP Program through the earlier of the maturity date of the debt or June 30, 2012. The FDIC has concluded that the FDIC Guarantee is subject to the full faith and credit of the United States."
The PFM filing also adds under "Termination of Cash Management Class of Prime Series," "On January 29, 2009, the Board of Trustees of the Trust approved the termination of the Cash Management Class of Prime Series, effective February 27, 2009, in light of the significant cost associated with banking services provided by the Fund's custodian in the current low-interest rate environment."
