Morgan Stanley on Govt MMFs
Morgan Stanley writes, "Global Liquidity Solutions: Institutional Government & Treasury Money Market Funds." It says, "The Morgan Stanley Institutional Liquidity Funds Government, Treasury, and Treasury Securities Portfolios are managed with the conservative natures of their shareholders in mind. [T]he Morgan Stanley Government, Treasury and Treasury Securities fund positioning and scale has resonated well with clients as the funds' asset growth have both consistently outperformed the industry since 2011. This can be attributed to several factors including our defensive portfolio management approach, our tailored resources and expertise, and our strategic focus on building up our government and treasury money market funds in anticipation of money market regulatory reform. Early on we identified the direction of money market fund reform was suggesting a regulator and investor preference toward government and treasury funds. We therefore placed significant emphasis on building scale in this category of money market funds by positioning our funds in a manner to be most attractive to investors. We believe that scale is important because it allows for greater accessibility coupled with greater stability for a fund. Government and treasury money market funds play a significant role in today's $2.7 trillion money fund industry, representing nearly half of total industry assets. When safety and liquidity are the most critical investment objectives, government and treasury funds may offer an attractive investment option. In some cases, selection of a government or treasury fund is dictated by policy mandate; in others, it stems simply from a desire to take a more defensive path. The amended money market fund rules to be implemented in October 2016 will not require these funds to float their net asset value (NAV) nor have the potential for liquidity fees or redemption gates, rendering them an attractive alternative for some current Prime fund investors. Since safety is the highest priority, for some investors, a government or treasury fund's yield may be a secondary consideration. Nonetheless, investors have a natural desire to maximize returns within the parameters of their risk profiles." In other news, Pensions & Investments writes, “Illinois State Board names finalists in several searches.” It says, “For the $4.1 billion Illinois State Employees’ 457 Deferred Compensation Plan overseen by ISBI, Vanguard Group was named as the only finalist to manage a money market fund. Vanguard was the incumbent, managing a $36 million portfolio for the 457 plan."
