Fitch Ratings wrote Tuesday, "Fitch Ratings has withdrawn the 'AAAmmf' rating for the Williams Capital Government Money Market Fund (the Fund) managed by Williams Capital. Williams Capital will be outsourcing the management of its money market fund strategies to Northern Trust and at shareholder option funds may be transferred to into new share classes of the Prime Obligations Fund or the U.S. Government Select Fund. On September 4, 2014, the Board of Trustees of Williams Capital Management Trust, on behalf of the Fund, approved a proposal to mandatorily redeem all the shareholders of the Fund at a net asset value per share of $1.00 and thereafter to liquidate the Fund. The mandatory redemption date has been set as September 22, 2014 and the liquidation date has been set for September 29, 2014. The Fund had $202 million of total assets under management as of Sept. 16, 2014." We wrote about this in our Sept. 15 News story, "TCG Launches Govt MMFs With FDIC Insured Blocks; Williams Outsources". In other news, Trefis writes, "How BlackRock Is Dealing With Negative Interest Rates in Europe"." It says, "Earlier this month, the European Central Bank announced its decision to cut benchmark interest rates further, in what is the latest attempt by the regulator to improve economic conditions in the Eurozone.... BlackRock was the first asset manager to react to this change, with the firm announcing its intention to activate a mechanism that will help it maintain a stable share price for one of its money-market funds -- the ICS Europe Government Liquidity Fund. While the fund, with E1.4 billion ($1.8 billion) in assets under management, is a fraction of the $268.4 billion in money-market assets managed by BlackRock at the end of Q2 2014, the decision to switch to a Reverse Distribution Mechanism could extend to its larger Institutional Euro Government Liquidity Fund, and is likely to result in similar changes by competitors over coming weeks.... While banks are affected the most by a negative deposit rate, the impact on asset management firms is also noticeable -- particularly for those with a strong presence in the cash management market. As the largest asset manager in the world with $4.6 trillion in assets under management, BlackRock is clearly affected by the ECB's move. The chart ... shows the size of assets under management in money market funds for BlackRock globally. The negative deposit rate makes it very likely that yields on government securities will turn negative on certain trading days -- resulting in unwanted fluctuations in the net asset value (NAV) of funds that hold these securities. BlackRock's proposed switch to a Reverse Distribution Mechanism seeks to avoid this problem by canceling out shares in proportion to the reduction in value over a day in which returns were negative. This way, the NAV remains constant while the negative returns are absorbed by a reduction in the number of fund units. Negative returns will drag down the fees for BlackRock's cash management business as shown in the chart.... You can see how a reduction in these fees impacts the company's share value by making changes to this chart."
