The Associated Press about the new trend of daily posting of money funds' market NAVs in "TMI? New disclosures by money-market funds are about more than just an investor's need to know." The article says, "The more informed you are, the better. Yet there's so much information about mutual funds available, from performance data to legal disclosures, that it's understandable to wonder what information you really need to know. For the past three weeks, many investors have been able to check out new information that falls into this category. On a fund company's website, they can click on list of available money-market funds to see daily updates showing tiny changes in the market value of a money fund's portfolio." (Note: Crane Data's Money Fund Intelligence Daily now includes "shadow" or "market" NAVs for those funds that are publishing them; we label these as "MNAVs".)
AP explains, "Goldman Sachs on Jan. 9 became the first to post daily values of its money funds. More than a half-dozen other companies have since followed suit or announced similar plans. They include the largest money fund provider, Fidelity Investments, as well as such names as Charles Schwab, Federated Investors, BlackRock, JPMorgan and Charles Schwab. There's minimal practical value for average investors to review these numbers. Money funds get relatively little attention because they're low-risk investments, and their portfolios of short-term bonds generate tiny returns even in the best of times."
The article continues, "But by voluntarily making these daily disclosures, the money fund industry is doing more than just serving investors. It's trying to convince regulators that it's open to some degree of change, in hopes of heading off more far-reaching rules that are under consideration to stabilize money funds." AP quotes Peter Crane of money fund researcher Crane Data, "All of a sudden, the industry got religion on transparency. It's throwing a bone to regulators."
AP adds, "With its leadership in transition, it's too early to say how the Securities and Exchange Commission will react to the industry's increased openness. But the step could convince regulators that there's no need to require funds to hold loss reserves -- there are none currently -- or that there's no need to set limits on how quickly investors can withdraw cash."
The article tell us, "So far, money funds are making daily disclosures covering more than half of the industry's assets, according to Crane Data. But there are some holdouts. One is Vanguard.... Each of the more than 200 funds that Crane Data tracked through Jan. 22 posted net asset values above $1 a share. On average, the funds published market values of $1.0002, or a dollar and two-hundredths of a penny. Typically, values are rounded off to four decimal places."
They quote Crane, "Anyone tracking this should expect to see a lot of zeros. So far, there have been no nines, and that's good." Our latest data from MFI Daily shows the 252 funds out of 1,067 we track daily with MNAVs ranging from 1.0000 to 1.0017. Taxable money funds average 1.0001, while Tax Exempt money funds average 1.0004. (The Tax Exempt universe is much thinner as many fund managers are only reporting their "Prime" money fund MNAVs.)
Money fund managers publishing daily NAVs currenty include: BlackRock (most funds), BofA (some funds), Federated (some funds), Fidelity (all funds), Goldman Sachs (all funds), Invesco (most funds), and JPMorgan (all funds). Schwab and Reich & Tang have announced that they will post, but their data has yet to appear. Other fund complexes are expected to join the trend in coming weeks.
Finally, AP quotes Crane, "Anything happening in the world that's important enough to noticeably move a fund's net asset value is probably something that's important enough to be in the newspapers. So you can just stay alert that way, rather than watching all these zeros."
