While outside prognosticators continue to predict consolidation among money market mutual funds, providers continue to resist wholesale exits from the space in favor of fund lineup tweaks Several fund changes have occurred recently, and all are relatively minor. Milestone Treasury Obligations recently shifted its advisory agreement from Milestone Capital Management to NorthStar Financial Services Group, manager of the AdvisorOne family of funds. The core management team of the Milestone funds remains intact. (See the Prospectus Supplement.) Also, BofA Global and American Beacon both made small changes to their money fund lineups.
The Milestone Treasury Obligations filing says, "At its meeting on August 3, 2011, the Board of Trustees of the Portfolio unanimously voted to terminate the investment advisory agreement between The Milestone Portfolios, on behalf of the Portfolio, and Milestone Capital Management, LLC. At the same meeting, the Board approved an interim advisory agreement with CLS Investments, LLC, a wholly owned subsidiary of NorthStar Financial Services Group, LLC. Under the Interim Agreement, CLS will provide investment advisory services to the Portfolio for the same fee the Portfolio was obligated to pay under its agreement with Milestone and under terms that are materially identical to the agreement with Milestone."
It adds, "At the meeting, the Board also considered, approved and recommended to shareholders a long-term advisory agreement with CLS to provide investment advisory services to the Portfolio for the same fee Milestone was entitled to receive. The Final Agreement will become effective upon approval by shareholders.... At the August 3, 2011 meeting, the Board approved the merger of the Portfolio with the Milestone Treasury Obligations Portfolio, a newly organized series of the AdvisorOne Funds, in a tax-free reorganization, subject to shareholder approval."
A recent communication entitled, "BofA Funds Streamline Share Class Offerings," told Crane Data, "BofA Global Capital Management, LLC (BofA Global Capital Management) continuously looks for ways to refine its product line to provide the best possible investment opportunities. In keeping with this objective, on April 25, 2011, the Board of Trustees of BofA Funds Series Trust approved BofA Global Capital Management's plan to modify certain BofA Funds' share class offerings through a variety of terminations, conversions, additions, re-openings and re-namings. Each of these changes is described in further detail ... in supplements to the BofA Funds' registration statement. The Board determined that certain share classes with nominal assets and/or limited distribution potential should be terminated and/or converted into existing share classes. In addition, new share classes are being introduced to position the BofA Funds in such a way that they are better aligned for specific distribution channels as well as to provide customers with the best possible products and services we are able to offer. These changes are scheduled to take place on or about the close of business on September 30, 2011."
Finally, the American Beacon Funds recently announced the liquidation of its American Beacon Money Market Mileage Fund. The filing said, "On August 10, 2011, the Board of Trustees of American Beacon Mileage Funds approved a plan to liquidate and terminate the American Beacon Money Market Mileage Fund, upon recommendation by American Beacon Advisors, Inc., the manager to the Fund. Due to the prolonged low interest rate environment and costs associated with maintaining a positive yield in the Fund, the Manager does not believe that it can continue to conduct the Fund's business and operations in an economically efficient manner. As such, the Board concluded that it would be in the best interests of the Fund and its shareholders to liquidate and terminate the Fund.... On or about September 30, 2011, the Fund will distribute cash pro rata to all remaining shareholders who have not previously redeemed all of their shares. Once the distribution is complete, the Fund will terminate."
The Mileage class had a mere $20 million as of Aug. 31 and American Beacon continues to manage approximately $1 billion in its `American Beacon Money Market Select share class and its American Beacon US Govt Select fund. Look for more information and a recap of recent Fund Liquidations, Changes and Mergers in our October Money Fund Intelligence, which will be send to subscribers on Friday morning. We also list fund changes in our monthly Money Fund Intelligence XLS in a separate "Changes" worksheet tab.
