The $31 million AARP Money Market Fund has filed for liquidation. The Prospectus Supplement for the AARP Funds says, "At a meeting on July 13, 2010, the Board of Trustees of the AARP Funds approved, in principle, the liquidation, dissolution and termination of the AARP Funds. Shareholders of the AARP Funds will receive checks for the value of the shares they hold on the date of liquidation, which is expected to be on or about October 1, 2010. Shareholders have the right to redeem shares of the AARP Funds prior to the liquidation date.... Effective at the close of business on July 20, 2010, the AARP Funds will close to new shareholders, and no longer accept orders from existing shareholders to purchase additional shares (including automatic investment programs). However, exchanges into the AARP Money Market Fund will be permitted up to the liquidation date."
Next, Federated Investors writes on "No relief for savers in its latest Commentary, saying, "With core inflation in the United States running at the lowest level since the early 1960s and large amounts of excess capacity remaining in labor and resource markets, investors have concluded that a rate hike this year is off the table. We concur with that view, and are pleased with our purchases of some longer-dated securities when yields briefly ticked higher in June. The unprecedented magnitude and duration of the Fed's easy money policies has exerted a heavy price on savers. We believe that over time, the government's efforts to revive growth will succeed and that cash yields will trend higher. Given the strong immediate headwinds to full employment as households and governments embrace some degree of austerity, however, it is virtually certain that the journey towards more generous yields on cash equivalents will not begin until next year."
The FT writes "Justin Meadows: money market fund yields," "The US fund industry is fighting tooth and nail to preserve a unique feature of money market funds -- their ability, in normal circumstances, to quote a constant, stable net asset value (NAV) of $1 a share, even if the underlying value of the holdings differs from this. The Investment Company Institute, the US trade body, says suggestions from the Securities and Exchange Commission that the $2,800bn US industry could be forced to switch to a more conventional variable NAV structure 'would destroy money market funds as they exist now, risking severe harm to investors and to issuers of short-term securities, including businesses, state and local governments, banks and the US Treasury.' It is perhaps surprising then that the European money market industry seems set for a wholesale move to variable NAV funds of its own volition, without a stick-wielding regulator in sight."
Finally, see "ASF Indicates Broad Support for SEC Reg AB Proposals" and "SIFMA Supports SEC Rules to Increase Transparency and Revitalize Securitization ". The ASF release says, "In two letters submitted to the Securities and Exchange Commission today, the American Securitization Forum offers broad support for SEC proposals aimed at increasing transparency in the securitization markets. In a comment letter focused on the Commission's proposals regarding Regulation AB, the ASF both appreciates and supports the SEC's goal of balancing investors' needs for adequate information with issuers' interest in securing timely access to the capital markets. In another letter responding to proposals affecting privately placed asset-backed commercial paper, or ABCP, the Forum concurs with the commission's aim of providing investors with increased transparency but also expresses concern over the SEC's proposed information delivery requirements."
