Money market mutual funds continue to slowly move towards disclosing daily "mark-to-market" or "shadow" NAVs, though the migration has slowed to a trickly following the initial burst of disclosures that started two weeks ago. Crane Data's Money Fund Intelligence Daily, which tracks daily yields, assets and news, shows that every single one of the 208 funds (out of 1,067 tracked by MFID) disclosing these Market NAVs (or "MNAVs") shows a value of 1.0000 or higher. On average, money funds are publishing MNAVs of 1.0002 (as of Jan 22). Fund complexes currently posting MNAVs for some or all of their funds include: BlackRock, Fidelity, and Goldman Sachs. Those pledging to post but not yet publishing include: Dreyfus, Federated, Invesco, and Schwab. The most recent complexes to jump on the bandwagon is Reich & Tang. (Note: Crane's Money Fund University, our "basic training" conference, kicks off today at The Roosevelt Hotel in New York City and runs through Friday. There is still space for last-minute attendees, and clients and friends are welcome to drop by for Thursday night's opening night cocktail party from 5:10-6pm.)
Their press release says, "Reich & Tang today announced its next phase in offering additional transparency within its money market mutual funds. The company will soon begin to disclose daily net asset values for its prime money market funds, a move that is gaining steam in the industry and one that complements Reich & Tang's long standing commitment to providing transparency to all shareholders."
It continues, "To date, Reich & Tang is the only company to post its prime money market funds' portfolio holdings and approved issuer lists on a daily basis. "Disclosing daily NAVs along with our daily portfolio holdings and approved issuer lists creates an unprecedented level of transparency in money funds," said Michael Lydon, CEO. "Having this combined 'transparency trifecta' enables our shareholders to conduct appropriate real-time due diligence on our funds, evaluate our credit process, and best determine suitability to their individual investment policies and philosophies."
R&T adds, "The SEC currently mandates that all money fund companies provide these "marked-to-market", or "Shadow" NAVs on a monthly basis, which is then made available to the public on a 60-day lag. Many fund sponsors in the industry see the daily reporting of these NAVs as a positive move as evidenced by their voluntary participation in providing the information.... The preemptive move to share daily NAVs with the public comes ahead of the Financial Stability Oversight Council's (FSOC) deadline to provide comments regarding their proposed money fund reform recommendations. One of the proposed recommendations by FSOC calls for a floating rate NAV, which has stirred much debate within the money fund industry. One could argue that the disclosure of the daily NAVs may be a means to demonstrate to the public the overall long-term stability in the pricing of money market mutual fund NAVs."
Lydon comments, "Consistent with the times and our transparency efforts, we believe that added levels of transparency and education will help to address some of the challenges that FSOC's proposed money fund reform measures are seeking to overcome."
Moody's Investors Service recently commented on the trend in "Disclosure of Daily NAV Is Credit Positive for Money Market Investors," "Last Wednesday, Goldman Sachs Asset Management (GSAM), a unit of The Goldman Sachs Group, Inc. (A3 negative), announced that it would begin disclosing on a daily basis the market net asset values (NAVs) of its US money market funds (MMFs), with non-US-domiciled fund disclosure beginning in the near future. A day later, institutional MMF giants JPMorgan Chase & Co. (A2 negative), BlackRock, Inc. (A1 stable) and Dreyfus, a unit of The Bank of New York Mellon (Aa1 stable), announced they would follow suit with daily disclosure of their US MMFs' market value NAVs. FMR LLC (Fidelity, A2 stable) and Federated Investors Inc. (unrated) subsequently announced similar moves for some of their funds."
They add, "More frequent and timely disclosure of fund mark-to-market values is a positive development for MMF investors that now have access to monthly disclosures with a 60-day lag. By increasing transparency, MMF managers will be encouraged to maintain the most conservative portfolios and hold securities with the most stable prices and the lowest exposure to interest rate as well as credit spread risk. Beyond what is done today, MMF managers with daily mark-to-market NAV disclosures will attempt to further limit the potential daily deviations between the fund's mark-to-market NAV and the amortized cost NAV value of $1.00, at which MMFs transact, or face the risk of fund redemptions. The additional disclosure along with current reporting practices will also provide investors with additional transparency on the daily management, operation and current fund portfolio status."
