Though pressures and challenges remain, life goes on in the money market fund world as a new entrant prepares for a fund launch. Balance Sheet Solutions, which is affiliated with Members United Corporate Federal Credit Union, has filed for a new Institutional U.S. Government Money Market Fund. Meanwhile, the push to offer enhanced cash and ultra-short alternatives by managers continues with the launch of USAA Ultra Short-Term Bond Fund (UUSTX).
The Balance Sheet Solutions Inst US Govt MMF filing says, "To achieve its investment objective, the Money Market Fund invests in high quality fixed and variable rate short-term money market instruments consisting primarily of U.S. Government Securities, which are securities issued or guaranteed as to principal and interest by the U.S. Government or its agencies, instrumentalities or sponsored entities. Under normal circumstances, the Money Market Fund will invest at least 80% of its assets in U.S. Government Securities. The Fund also invests in repurchase agreements collateralized by U.S. Government Securities and mortgage-backed securities that are issued or guaranteed by U.S. Government agencies or instrumentalities."
It adds, "The Fund's investment portfolio is constructed to consist of instruments permitted by the Federal Credit Union Act and the National Credit Union Administration's Rules and Regulations Part 703 for federally chartered credit unions. However, the Fund will limit its portfolio to the investments discussed in this Prospectus and in the Fund's Statement of Additional Information, and will not invest in all types of investments permitted under Part 703. Shares of the Fund may be held by any type of institutional investor, and are not limited to credit unions." The fund will charge 0.37%, Balance Sheet Solutions, LLC is the fund's investment adviser, and Darren Fago is the portfolio manager.
A letter on the BSI website says, "As you might have already heard, Balance Sheet Solutions’ parent company, Members United Corporate FCU, was conserved by the NCUA Office of Corporate Credit Unions Friday, September 24th. NCUA has assured us that this event will not impact the way Balance Sheet Solutions serves our customers and clients. Our operations remain fully intact and fully operational."
The USAA press release, entitled, "USAA Launches Funds Keyed to Inflation and Interest-Rate Concerns", says, "USAA today announced the launch of two new mutual funds as part of an overall strategy to increase members' and other customers' investment solutions in response to economic uncertainty and the potential for inflation and rising interest rates.... The USAA Ultra Short-Term Bond Fund is designed for risk-averse investors who are concerned about rising interest rates and are seeking a bond fund with less price sensitivity due to its shorter maturity and ability to reprice quickly. The fund also seeks to provide better returns than money market funds."
