Fidelity Investments released an "Operational Update" to shareholders on April 7, which detailed some of the specifics related to their money market fund changes that were announced in February. (See our Feb. 2 News, "Fidelity Announces Major Changes to MMFs; Staying Stable, Going Govt.") The big news then was the planned conversion of three Prime Retail funds, including the largest money fund in the world, Fidelity Cash Reserves, into government funds. But Fidelity also announced several fund conversions and other changes. Fidelity's newest Update adds more detail to these changes, and announces, among other things, new share classes of some existing funds.
Its new announcement says, "You may have received a communication from us dated March 5, 2015, advising you that the Board of Trustees has approved a change in the investment policy of certain money market mutual funds in order to meet new regulatory requirements. Several Fidelity money market funds are included in these changes. These funds will continue to be managed in the same manner they have always been, and the shareholders do not need to take any action. Fidelity has updated the funds' prospectuses to reflect the investment policy changes, and has communicated this information to shareholders. We also announced that Fidelity is proposing numerous money market fund mergers across our prime, government, U.S. Treasury and municipal product lines." It adds, "Further, Fidelity will be launching six (6) new classes of existing Fidelity money market funds."
It continues, "On April 14, 2015, the following six (6) new classes of existing Fidelity money market funds will be available: Fidelity Tax-Exempt Fund Premium Class (FZEXX); Fidelity Government Money Market Fund Capital Reserves Class (FZAXX); Fidelity Government Money Market Fund Daily Money Class (FZBXX); Fidelity Government Money Market Fund Premium Class (FZCXX); Fidelity Treasury Fund (FZFXX); and Fidelity Money Market Fund Premium Class (FZDXX)."
On the mergers it adds, "Fidelity is proposing money market fund mergers across our prime, government, U.S. Treasury and municipal product lines. The proposed mergers will strengthen and simplify our money market fund product lineup, and make it easier for investors to select a fund or class that meets their need. The following mergers require shareholder approval: Select Money Market, CMF Prime Fund, and U.S. Government Reserves. Shareholders of the funds received a proxy solicitation to approve the proposed merger on or about March 20, 2015. If approved, impacts will include name change, CUSIP/symbol change, and new investment objective."
Specifically, Select Money Market (FSLXX) would be merged into Fidelity Money Market Premium Class (FZDXX); CMF Prime Fund Daily Money Class (FDAXX) would be merged into Fidelity Government Money Market Daily Money Class (FZBXX); CMF Prime Fund Capital Reserves Class (FPRXX) would be merged into Fidelity Government Money Market Capital Reserves Class (FZAXX); and US Government Reserves (FGRXX) would be merged into Fidelity Government Money Market Premium Class (FZCXX).
Further, "The following mergers do not require shareholder approval: AMT Tax-Free Money Fund, CMF Government Fund, and Treasury Money Market Fund.... Shareholders of the funds have received letters informing them of the changes and merger timeline, as indicated below." Specifically, CMF Government Daily Money Class (FLFXX) will be merged into Fidelity Government Money Market Daily Money Class (FZBXX) effective May 15, 2015; CMF Government Capital Reserves Class (FTBXX) will be merged into Fidelity Government Money Market Capital Reserves Class (FZAXX) effective May 15, 2015; AMT Tax-Free Money (FIMXX) will be merged into CMF Tax-Exempt Premium Class (FZEXX) effective May 15, 2015; and Fidelity Treasury Money Market (FLTXX) will be merged into CMF Treasury Retail Class (FZFXX) effective June 19, 2015.
As a result of the mergers, AMT Tax-Free Money Fund, CMF Government Fund, and Treasury Money Market Fund, the merging funds will be closed to new accounts on the following dates: AMT Tax Free, April 24, 2015; CMF Government Fund: Daily Money Class, April 24, 2015; CMF Government Fund: Capital Reserves Class, April 24, 2015; Fidelity Treasury Fund, May 22, 2015."
Fidelity also announced an "Investment Policy Change for Fidelity Government and U.S. Treasury Money Market Funds." It continues, "In July 2014, the U.S. Securities and Exchange Commission (SEC) approved regulatory changes for money market mutual funds. Under the new rules, government money market mutual funds are defined as those investing 99.5% of their total assets in cash, U.S. government securities, and/or repurchase agreements that are collateralized fully. Although Fidelity's U.S. government and Treasury money market funds have historically met this new requirement, the Board of Trustees for these funds has approved updates to their investment policies to reflect the SEC's new definition. The investment policy change will take effect on or about May 31, 2015."
In other news, Alpine Funds filed papers with the SEC to liquidate the Alpine Municipal Money Market Fund. It says, "On March 19, 2015, the Board of Trustees (the "Board") of the Alpine Municipal Money Market Fund (the "Fund"), a series of the Alpine Income Trust (the "Trust") determined that it is in the best interests of the Fund and its respective shareholders to liquidate the Fund (the "Liquidation") on or about April 28, 2015 (the "Liquidation Date"). The Liquidation Date may be changed without notice at the discretion of the Trust's officers." As of April 10, the fund had $90 million in assets, according to Crane Data.
Finally, PIMCO filed with the SEC to convert the B shares of several of its funds, including the PIMCO Money Market Fund, into the A shares of those same portfolios. It says, "At a meeting held on February 23-24, 2015, the Board of Trustees of PIMCO Funds approved the early conversion of each Fund's Class B Shares into Class A Shares. Accordingly, effective at the close of business on March 25, 2015 (the "Conversion Date"), all Class B Shares of each Fund will automatically convert to Class A Shares of the same Fund, notwithstanding the conversion schedule set forth in each Prospectus." The funds listed include: PIMCO Money Market Fund.
