As we mentioned Thursday when we released the January issue of our flagship Money Fund Intelligence newsletter, each year Crane Data recognizes the top-performing money funds, ranked by total returns, for calendar year 2014, as well as the top-ranked funds for the past 5‐year and past 10-year periods. We present the following funds with our annual Money Fund Intelligence Awards. These include the No. 1-ranked funds based on 1-year, 5-year and 10-year returns, through Dec. 31, 2014, in each of our major fund categories -- Prime Institutional, Government Institutional, Treasury Institutional, Prime Retail, Government Retail, Treasury Retail and Tax‐Exempt. Below, we reprint the MFI article announcing the winners. (We mentioned the 1-year winners on the website Thursday -- see our Jan. 8 News "Dec. MFI Features Awards, JPM's Donohue & Linton; Fed Shelves CSAs". We repeat them here, but we also review the 5-year and 10-year top-performers below.)
The Top-Performing Taxable fund overall in 2014 and top among Prime Institutional funds was BlackRock Cash Inst MMF (BGIXX), which returned 0.11%. (We excluded BlackRock Cash's SL class due to its limited availability.) Among Prime Retail funds, Invesco Money Market Cash Reserve (AIMXX) and Schwab Cash Reserve (SWSXX) had the best return in 2014 (0.06%). BofA Govt Plus Reserve Capital (GIGXX), Morgan Stanley Inst Liquid Govt Inst (MVRXX), and Western Asset Inst Govt MM Inst (INGXX) were the Top Government Institutional funds over a 1-year period with returns of 0.04%, while BofA Govt Plus Reserve Investor (BOPXX) and Morgan Stanley Inst Liq Govt Cash Mgmt (MSGXX) won the MFI Award for Government Retail Money Funds (based on 1-year return). Morgan Stanley Inst Liq Treasury Inst (MISXX) and Western Asset Inst US Treasury Obligation MMF Inst (LUIXX) were No. 1 in the Treasury Institutional class, and Morgan Stanley Inst Liq Treasury Cash Mgmt (MREXX) ranked tops among Treasury Retail funds.
For the 5-year period through Dec. 31, 2014, BlackRock Cash Inst MMF Inst (BGIXX) and Fidelity Inst MM Portfolio (FNSXX) took top honors for the best performing Prime Institutional money fund with returns of 0.18%. Meeder Money Market Fund Retail (FFMXX) once again ranked No. 1 among Prime Retail with an annualized return of 0.11%. American Beacon US Govt Select (AAOXX) ranked No. 1 among Govt Institutional funds, while Davis Government MMF (RPGXX) ranked No. 1 among Govt Retail funds over the past 5 years. BlackRock Cash Treasury MMF Inst (BRIXX) ranked No. 1 in 5-year performance among Treasury Inst money funds, and Northern Trust Treasury Money Market (NITXX) ranked No. 1 among Treasury Retail funds.
The highest‐performers of the past 10 years included: Touchstone Inst MMF (TINXX), which returned 1.82% (it was No. 1 overall and first among Prime Inst, though this fund will be liquidating -- see our Dec. 26 News "Touchstone to Liquidate Money Funds, Victim of SEC's MMF Reforms"); Fidelity Select MM Portfolio (FSLXX), which returned 1.67% (the highest among Prime Retail); American Beacon US Govt Select (AAOXX) and Goldman Sachs FS Govt Inst (FGTXX), which returned 1.61%, (No. 1 among Govt Inst funds); and Vanguard Federal Money Market Fund (VMFXX), which ranked No. 1 among Govt Retail funds (1.57%). BlackRock Cash Treasury MMF Inst (BRIXX) returned the most among Treasury Institutional funds over the past 10 years; and, Morgan Stanley Inst Liq Treasury Inv (MTNXX) ranked No. 1 among Treasury Retail money funds.
We're also giving out awards for the best-performing Tax‐Exempt money funds. Fidelity AMT Tax Free Money Fund (FIMXX) and Invesco Tax Exempt Cash Fund A (ACSXX) ranked No. 1 for the 1-year period ended Dec. 31, 2014, with returns of 0.11%. Over the last 5 years, BMO Tax Free MMF I (MFIXX) was the top performer with a return of 0.21%. BMO Tax Free MMF I also was the top-ranked fund for the 10-year period ended Dec. 31, with a return of 1.37%. See our latest Money Fund Intelligence XLS for more detailed rankings. Winners will receive a letter and certificate stating their No. 1 ranking , the number of funds in their category, and the criteria used.
In others news, management consulting firm Beacon Consulting Group released a white paper, entitled, "Getting Ready for Money Market Reform last week. BCG Principal Gerry Healy writes, "The Securities and Exchange Commission's (SEC) money market reform imposes new operational requirements on institutional money market funds and provides retail money market fund boards with new tools should certain market events occur. Now is the time for asset managers and service providers to organize a readiness assessment program in anticipation of potential operating model changes, new procedures, technology modifications and new data flows that may be required in order to meet the operational requirements and regulatory filing deadlines,"
The paper explains, "Money market reform readiness activities generally consist of working with all affected functions to ensure that: Systems and processes are capable of handling the requirement for institutional funds to use a floating NAV out to four decimal places; Data and processes are established to comply with SEC filings (new data on Form NMFP and new Form N-CR) that may be required; and, Investor liquidity requirements (e.g. intraday dealing) are met."
On Accounting and NAV Dissemination, it says, "Fortunately, most fund accounting systems currently in use appear to be able to calculate the floating NAVs to the four decimal place requirement. Where firms will likely spend the most time during this phase is ensuring that the extracts and reports delivered to internal and external interested parties are retrofitted to accommodate the dissemination of the four decimal place NAV. All reports currently used to support money market funds, including hard copy reports, data extracts, management reporting, should be analyzed to ensure compliance. The reports will drive the development of business requirements that may be required to close any gaps related to NAV dissemination."
On the subject, Regulatory Filings - Data, the paper explains, "A trigger event that may require a filing occurs in one of two ways: via market activity or through board approved measures such as redemption gates or redemption fees. Once a trigger event is approved by the board or occurs within the portfolio due to market activity, a Form N-CR filing requirement results. A "sources and uses" data matrix for the N-CR and NMFP filings is useful in developing requirements for any data or reporting gaps and tracks key inputs required to complete the new forms."
Finally, the paper says, "Complying with money market reform requirements will require a significant collaboration between asset managers and service providers. The asset manager's role in orchestrating this coordination is critical. An approach that includes a sound analysis of process changes and data requirements, followed by a comprehensive action plan to remediate any gaps can ensure a successful compliance process."
