As we discussed in our latest Money Fund Intelligence (see the article "Comeback or Flashback? Enhanced Cash Returns"), there have recently been a handful of new entrants in the space just beyond money market mutual funds. While we mentioned the registration filing of one of these, the press release sent out yesterday entitled, "OppenheimerFunds, Inc. Launches Short Duration Fund" makes this latest launch official.
The release says, "OppenheimerFunds, Inc. (OFI), a leading asset manager, today announced the launch of Oppenheimer Short Duration Fund, an actively-managed fund that seeks to offer investors attractive short duration returns with relatively low interest rate risk. Oppenheimer Short Duration Fund seeks to provide investors with a competitive yield over money market funds and relative stability of principal. In an attempt to achieve this objective, the Fund will seek to maintain a portfolio duration of one year or less and invest in a variety of investment grade short-term debt and money market instruments."
Carol Wolf, Co-Portfolio Manager of the new Oppenheimer Short Duration Fund, says, "The credit and liquidity environment over the last few years has created an imbalance in the market. Short duration products may be able to exploit these inefficiencies by taking advantage of the steep yield curve. The fund presents a diversification option for investors and seeks the combination of current income, while endeavoring to preserve capital."
The Oppenheimer release continues, "This new fund will be managed by Wolf, who is head of the Denver-based Oppenheimer Cash Strategies Team, and Chris Proctor, Vice President and Portfolio Manager. The Cash Strategies Team has been running funds for more than 30 years since the inception of the Daily Cash Accumulation Fund and the Centennial Funds in the '70's."
It adds, "The Oppenheimer Short Duration Fund can invest in a variety of U.S. dollar-denominated, investment-grade fixed income obligations, including corporate notes, floating and variable rate instruments, asset backed securities, and U.S. Government and Agency debt. The Short Duration Fund will be managed with the same investment and credit process as the other funds the team oversees. The Cash Strategies Team manages more than $10 billion in assets (as of 3/31/11), including all of OppenheimerFunds' money market funds. Further information about the fund can be accessed at oppenheimerfunds.com. Currently, Class Y Shares of the Fund are being offered to institutional investors with a minimum initial investment of $250,000."
Finally, the release says, "Oppenheimer Short Duration Fund is not a money market fund. Shares of the fund have a variable net asset value. Fixed-income investing entails credit risks and interest rate risks. When interest rates rise, bond prices generally fall and a fund's share price can fall. The Fund is also subject to liquidity risk. Investments in foreign securities entail special risks (such as economic and political uncertainties) and may have higher expenses and volatility. The Fund may invest more than 25% of its assets in securities of issuers in the banking and financial services industries which may be more susceptible to particular economic and regulatory events and increased volatility. Derivative instruments, investments whose values depend on the performance of an underlying security, asset, interest rate, index or currency entail potentially higher volatility and risk of loss compared to traditional stock or bond investments. Diversification does not guarantee profit or protect against loss."
In other "Enhanced Cash" News, Dreyfus recently closed its `Dreyfus Institutional Income Advantage Fund. The SEC filing says, "The Board of Trustees of The Dreyfus/Laurel Funds Trust has approved the liquidation of Dreyfus Institutional Income Advantage Fund. Effective on or about February 17, 2011, no new or subsequent investments in the Fund will be permitted, except through dividend reinvestment." No word on what caused Dreyfus to retreat from this sector.
