In another sign that money fund managers are looking to consolidate their fund lineups, Federated Investors, the third-largest money fund manager, has filed prospectus supplements for its Federated Arizona Municipal Cash Trust and Federated Maryland Municipal Cash Trust indicating that these two State Tax Exempt money funds may be liquidated due to their small size. These filing follows last week's move by Goldman Sachs to liquidate its smaller Institutional Liquid Assets (ILA) money funds and move investors into its larger Financial Square money fund family. (See Crane Data's August 26 News "Goldman to Consolidate Fund Lineups, Liquidate Inst Liquid Assets MFs".)
The prospectus supplement for the $48 million Federated AZ Muni Cash Trust (AZMXX), says, "Federated Securities Corp. (FSC), the distributor of Federated Arizona Municipal Cash Trust, a series of Money Market Obligations Trust, and Federated Investment Management Company, the investment adviser for the Fund, have decided to undertake a strategic review of the Fund. The review will encompass options for the Fund taking into consideration the Fund's asset size, the costs to run the Fund, and the Fund's prospects for future growth, with a view toward seeking to terminate the existence of the Fund, through either liquidating the Fund or reorganizing the Fund into another Federated municipal money market fund."
The filing adds, "The Fund intends to continue to process purchases, redemptions and exchanges in the ordinary course of business during the review. The Adviser anticipates that, in the short term, it, and its affiliates, will continue to waive and/or reimburse certain Fund fees and expenses to maintain the Fund's yield at a level similar to the yield of the Fund over recent quarters. It is possible that shareholders of the Fund will redeem their investments prior to the completion of the strategic review. FSC, and its affiliates, will be working with the Fund's shareholders and intermediaries to identify alternative Federated investments."
The $38 million Federated MD Muni Cash Trust (MDMXX) filing says, "Federated Securities Corp. (FSC), the distributor of Federated Maryland Municipal Cash Trust, a series of Money Market Obligations Trust, and Federated Investment Management Company, the investment adviser for the Fund, have decided to undertake a strategic review of the Fund. The review will encompass options for the Fund taking into consideration the Fund's asset size, the costs to run the Fund and the Fund's prospects for future growth, with a view toward seeking to terminate the existence of the Fund, through either liquidating the Fund or reorganizing the Fund into another Federated municipal money market fund."
The MD supplement also adds, "The Fund intends to continue to process purchases, redemptions and exchanges in the ordinary course of business during the review. The Adviser anticipates that, in the short term, it, and its affiliates, will continue to waive and/or reimburse certain Fund fees and expenses to maintain the Fund's yield at a level similar to the yield of the Fund over recent quarters. It is possible that shareholders of the Fund will redeem their investments prior to the completion of the strategic review. FSC, and its affiliates, will be working with the Fund's shareholders and intermediaries to identify alternative Federated investments."
Crane Data's Money Fund Intelligence XLS currently tracks 87 domestic U.S. money funds from Federated Investors with a total of $224 billion. These funds are among the smallest managed by the company.
