BlackRock issued a client update yesterday related to expense limitations on its Government money market funds. It also recently announced a money fund liquidation, and a share class closure for one of its institutional funds. (Note: BlackRock Vice Chair Barbara Novick will keynote Crane's Money Fund Symposium, which begins Wednesday at the Philadelphia Marriott. Watch for news from Symposium later this week and next week.) Also, we review an update from Invesco on the implementation dates for its CNAV and FNAV funds and one on strike times for its Liquid Assets Portfolio.
Yesterday, BlackRock's Global Head of Cash Management Tom Callahan sent a letter to clients, which says, "Several criteria are frequently evaluated and measured when selecting money market funds, one of which is the expense ratios of the funds. BlackRock strives to provide money market fund investment solutions that are competitive and compelling. To that end, we recognize that pricing plays an important role in the decision making process, particularly for government money market funds."
He comments, "We are pleased to inform you that effective July 1, 2016, we will be implementing an expense limitation for certain of our government money market funds as recently approved by our Funds' Board of Trustees. We have been voluntarily waiving fees in most of these funds for some time, and in an effort to demonstrate long term commitment to our clients, have moved to make certain of these waivers contractual. For more detail about the affected funds, please see below." The update cuts the expense ratio for the "Inst" class of FedFund, Federal Trust Fund, T-Fund, and Treasury Trust from 0.20% to 0.17%, and for the "Inst" class of BlackRock Premier Government Institutional Fund from 0.17% to 0.14%.
Also, on June 16, BlackRock announced plans to liquidate BlackRock US Treasury Money Market Portfolio. A letter states, "On June 13, 2016, the Board of Trustees of the BlackRock Funds approved a proposal to close the BlackRock U.S. Treasury Money Market Portfolio to new investors and thereafter to liquidate the Fund. Accordingly, effective 4:00 P.M. (Eastern Time) on September 15, 2016, the Fund will no longer accept purchase orders from new investors. Effective July 1, 2016, checkbooks for the Fund's check writing privilege will no longer be ordered. Checks will continue to be honored if presented for payment on or before September 15, 2016."
It continues, "On or about September 29, 2016 (the "Liquidation Date"), all of the remaining assets of the Fund will be liquidated completely. Any shares held on the Liquidation Date will be redeemed at the net asset value per share and the Fund will then be terminated. Shareholders may redeem their shares or exchange their Fund shares for shares of another BlackRock mutual fund at any time prior to the Liquidation Date. The Fund may not achieve its investment objective as the Liquidation Date approaches."
Finally, a May 23 client update discusses plans to eliminate a share class for one of BlackRock's funds. It reads, "We want to share with you an important update as it relates to BlackRock Cash Funds: Institutional, a series of BlackRock Funds III. The Board of Trustees of the Trust has approved a proposal to close the Aon Captives Shares and Institutional Shares of the Fund to new share purchases. As of the close of business on August 1, 2016, the Fund will no longer accept purchase orders for Institutional shares. As of the close of business on June 1, 2016, the Fund will no longer accept purchase orders for Aon Captives Shares. Shareholders may continue to redeem Aon Captives Shares and Institutional Shares following June 1, 2016, and August 1, 2016, respectively."
In other money fund manager news, Invesco also put out a couple of client updates last week. The first is titled, "Updated Implementation Date for FNAV Funds." It says, "Today, we announce our intended implementation dates for our Constant Net Asset Value (CNAV) and Floating Net Asset Value (FNAV) funds.... On or about August 1, 2016: Invesco's CNAV prime and municipal funds will only accept new accounts that are beneficially owned by natural persons and will no longer accept new institutional accounts. Existing institutional clients may continue to transact as usual. On or about October 4, 2016: Institutional investors will no longer be eligible for our CNAV prime and municipal funds and we will begin transitioning remaining institutional clients out of these funds. Invesco intends to communicate with impacted clients prior to Oct. 4." On FNAV funds, it states, "On or about October 12, 2016: Invesco's designated FNAV prime and municipal funds will begin transacting at a floating net asset value."
The letter also provides a list of Invesco's money fund roster going forward. Government money market funds include: Government and Agency Portfolio, Government TaxAdvantage Portfolio, Premier US Govt Money Portfolio, Treasury Portfolio, Invesco Money market Fund, and Invesco VI Govt MMF. CNAV Retail funds include: Invesco Tax-Exempt Cash Fund (Muni), Tax-Free Cash Reserve Portfolio (Muni), and Premier Portfolio (Prime). Floating NAV funds include: Liquid Assets Portfolio (Prime), STIC Prime Portfolio (Prime), and Premier Tax-Exempt Portfolio (Muni).
Finally, Invesco also sent a letter to clients June 15 called, "Updated Strike Times for the Liquid Assets Portfolio." It explains, "The following Invesco funds, which intend to transact as FNAV funds, plan to offer the following intraday price times in order to provide same-day settlement and intraday liquidity to our investors." Liquid Assets Portfolio will transact three times daily – 8am, 12 pm, and 3 pm. Both STIC Prime and Premier Tax-Exempt will strike once at 3 pm each day. "All three portfolios plan to begin transacting at a FNAV on or about October 12, 2016. We will announce more detail on specific timing in the future. At this time, Invesco's government and Constant NAV money market funds intend to maintain their current settlement times."
