There haven't been a lot of fund mergers and liquidations over the past few months, but minor changes continue to trickle in. (See our August 25 and August 1 Links of the Day, "Western Latest to Merge Primes" and "Dreyfus Liquidating AMT-Free MMF.") The most recent tweaks come from Fidelity and Dreyfus, who are both making slight changes this month to trim their fund lineups. Fidelity is merging its $2.6 billion Retirement Government Money Market Portfolio (FGMXX) and its $8.8 billion Retirement Government Money Market II Portfolio (FRTXX) into the $67.2 billion Fidelity Government Money Market Fund (SPAXX), and Dreyfus is converting a number of its Agency, Administrative, Classic and Participant share classes into existing Institutional, Hamilton, and Investor shares. We review these changes, and we also summarize our most recent "offshore" money fund statistics and MFI International Portfolio Holdings (which were released on Friday), below.
The Supplement to the Retirement Government Money Market II Portfolio (formerly Retirement Money Market Portfolio) Summary Prospectus says, "The Board of Trustees of Fidelity Money Market Trust and Fidelity Hereford Street Trust has unanimously approved an Agreement and Plan of Reorganization ("Agreement") between Retirement Government Money Market Portfolio and Retirement Government Money Market II Portfolio (together, the "Acquired Funds"), each a series of Fidelity Money Market Trust, and Fidelity Government Money Market Fund, a series of Fidelity Hereford Street Trust. Substantially similar to each Acquired Fund, the Fidelity Government Money Market Fund seeks as high a level of current income as is consistent with preservation of capital and liquidity."
It explains, "The Agreement provides for the transfer of all of the assets and the assumption of all of the liabilities of each of Retirement Government Money Market Portfolio and Retirement Government Money Market II Portfolio in exchange for shares of Fidelity Government Money Market Fund (Retail Class) equal in value to the respective net assets of Retirement Government Money Market Portfolio and Retirement Government Money Market II Portfolio. After the exchange, Retirement Government Money Market Portfolio and Retirement Government Money Market II Portfolio will distribute the Fidelity Government Money Market Fund shares to its shareholders pro rata, in liquidation of Retirement Government Money Market Portfolio and Retirement Government Money Market II Portfolio."
Fidelity adds, "The Reorganization, which does not require shareholder approval, is expected to take place on or about September 22, 2017. The Reorganization is expected to be a tax-free transaction. This means that neither Retirement Government Money Market Portfolio and Retirement Government Money Market II Portfolio nor their shareholders will recognize any gain or loss as a direct result of the Reorganization."
A filing on recent Dreyfus changes tells us, "Effective on or about September 8, 2017 (the "Effective Date"), each fund will issue to each holder of the class of shares designated in the chart below as Converted Shares, in exchange for said Converted Shares, shares of the same fund designated as Surviving Shares having an aggregate net asset value equal to the aggregate net asset value of the shareholder's Converted Shares. Thereafter, each fund will no longer offer its Converted Shares. Each fund reserves the right to no longer offer and terminate its Converted Shares as separately designated classes of shares of the fund prior to the Effective Date if there are no holders of, or assets in, such Converted Shares."
It lists the changes: Dreyfus Cash Management Agency and Participant will convert into Institutional and Investor shares; Dreyfus Institutional Preferred Money Market Fund Administrative shares will convert into Hamilton shares; Dreyfus Government Securities and Govt Cash Management Agency shares will convert into Institutional shares; Dreyfus Institutional Preferred Government Money Market Fund Agency and Classic shares will convert into Hamilton and Premier shares; Dreyfus Institutional Treasury and Agency Cash Advantage Fund Agency and Classic shares will convert into Hamilton and Premier shares; Dreyfus Treasury Securities Cash Management Agency shares will convert into Institutional shares; Dreyfus Treasury & Agency Cash Management Agency and Premier shares will convert into Institutional and Investor shares; Dreyfus AMT-Free Tax Exempt Cash Management Admin and Participant shares will convert into Inst and Investor shares; Dreyfus AMT-Free Municipal Cash Management Plus Admin and Participant shares will convert into Inst and Investor shares; and, Dreyfus AMT-Free New York Municipal Cash Management Admin shares will convert into Inst shares.
In other news, Crane Data's latest MFI International shows assets in "offshore" money market mutual funds, U.S.-style funds domiciled in Ireland or Luxemburg and denominated in USD, Euro and GBP (sterling), up $101 billion year-to-date to $832 billion as of 9/14/17. U.S. Dollar (USD) funds (152) account for over half ($432.3 billion, or 51.9%) of the total, while Euro (EUR) money funds (93) total E89.7 billion and Pound Sterling (GBP) funds (106) total L224.8. USD funds are up $34 billion, YTD, while Euro funds are down E5 billion and GBP funds are up L35B. USD MMFs yield 0.99% (7-Day) on average (9/14/17), up 83 basis points from 12/31/16. EUR MMFs yield -0.50% on average, down 31 basis points YTD, while GBP MMFs yield 0.12%, down 16 bps YTD.
Crane's latest MFI International Money Fund Portfolio Holdings data (as of 8/31/17) shows that European-domiciled US Dollar MMFs, on average, consist of 15% in Treasury securities, 23% in Commercial Paper (CP), 24% in Certificates of Deposit (CDs), 18% in Other securities (primarily Time Deposits), 17% in Repurchase Agreements (Repo), and 3% in Government Agency securities. USD funds have on average 35.0% of their portfolios maturing Overnight, 12.3% maturing in 2-7 Days, 18.7% maturing in 8-30 Days, 9.8% maturing in 31-60 Days, 9.4% maturing in 61-90 Days, 11.4% maturing in 91-180 Days, and 3.4% maturing beyond 181 Days. USD holdings are affiliated with the following countries: US (25.9%), France (14.6%), Japan (10.1%), Canada (9.7%), Sweden (5.9%), the Netherlands (5.9%), Germany (5.2%), Australia (5.1%), UK (4.4%), Singapore (2.6%), and China (2.6%).
The 20 Largest Issuers to "offshore" USD money funds include: the US Treasury with $66.2 billion (14.7% of total assets), BNP Paribas with $17.9B (4.0%), Credit Agricole with $13.9B (3.1%), Toronto-Dominion Bank with $11.9B (2.7%), Mitsubishi UFJ with $9.9B (2.2%), Federal Reserve Bank of New York with $9.7B (2.1%), Societe Generale with $8.4B (1.9%), DnB NOR Bank ASA with $8.3B (1.8%), Wells Fargo with $7.8B (1.7%), Mizuho Corporate Bank Ltd with $7.7B (1.7%), Sumitomo Mitsui Banking Co with $7.6B (1.7%), Swedbank AB with $7.5B (1.7%), RBC with $7.3B (1.6%), National Australia Bank with $7.1B (1.6%), Bank of Nova Scotia with $7.0B (1.6%), Canadian Imperial Bank of Commerce with $6.9B (1.5%), ING Bank with $6.8B (1.5%), Natixis with $6.8B (1.5%), KBC Group with $6.8B (1.5%), and Rabobank with $6.8B (1.5%).
Euro MMFs tracked by Crane Data contain, on average 38% in CP, 29% in CDs, 23% in Other (primarily Time Deposits), 8% in Repo, 1% in Treasury securities and 1% in Agency securities. EUR funds have on average 24.0% of their portfolios maturing Overnight, 9.0% maturing in 2-7 Days, 19.5% maturing in 8-30 Days, 16.2% maturing in 31-60 Days, 12.2% maturing in 61-90 Days, 15.9% maturing in 91-180 Days and 3.3% maturing beyond 181 Days. EUR MMF holdings are affiliated with the following countries: France (27.5%), Japan (14.6%), US (12.9%), Sweden (7.8%), Netherlands (7.2%), Belgium (6.9%), Switzerland (6.5%), Germany (3.9%), and China (3.0%).
The 15 Largest Issuers to "offshore" EUR money funds include: BNP Paribas with E4.5B (5.8%), Rabobank with E3.2B (4.1%), Svenska Handelsbanken with E3.1B (3.9%), Credit Agricole with E2.8B (3.6%), Sumitomo Mitsui Banking Co. with E2.7B (3.4%), Proctor & Gamble with E2.6B (3.3%), KBC Group NV with E2.6B (3.3%), Credit Mutuel with E2.5B (3.1%), Agence Central de Organismes de Securite Sociale with E2.5B (3.1%), Nordea Bank with E2.5B (3.1%), Mitsubishi UFJ Financial Group Inc with E2.5B (3.1%), UBS AG with E2.4B (3.1%), Dexia Group with E2.3B (2.9%), Societe Generale with E2.2B (2.8%), and BPCE SA with E2.2B (2.8%).
The GBP funds tracked by MFI International contain, on average (as of 8/31/17): 42% in CDs, 24% in Other (Time Deposits), 19% in CP, 11% in Repo, 3% in Treasury, and 1% in Agency. Sterling funds have on average 27.0% of their portfolios maturing Overnight, 7.1% maturing in 2-7 Days, 14.4% maturing in 8-30 Days, 13.5% maturing in 31-60 Days, 16.0% maturing in 61-90 Days, 17.3% maturing in 91-180 Days, and 4.6% maturing beyond 181 Days. GBP MMF holdings are affiliated with the following countries: Japan (19.1%), France (17.8%), United Kingdom (14.4%), Netherlands (7.5%), Sweden (6.5%), Germany (5.8%), US (5.4%), Canada (4.4%), Australia (3.7%), and Singapore (3.0%).
The 15 Largest Issuers to "offshore" GBP money funds include: UK Treasury with L10.4B (6.2%), Mitsubishi UFJ Financial Group Inc. with L8.5B (5.1%), Sumitomo Mitsui Banking Co. with L7.1B (4.3%), ING Bank with L6.3B (3.8%), Credit Agricole with L6.0B (3.6%), Nordea Bank with L6.0B (3.6%), Rabobank with L5.7B (3.4%), Mizuho Corporate Bank Ltd. with L5.7B (3.4%), Bank of America with L5.7B (3.4%), BPCE SA with L5.6B (3.4%), BNP Paribas with L5.5B (3.3%), Credit Mutuel with L5.0B (3.0%), Sumitomo Mitsui Trust Bank with L5.0B (3.0%), Svenska Handelsbanken with L4.4B (2.6%), DZ Bank AG with L3.8B (2.3%), Standard Chartered Bank with L3.2B (1.9%), Erste Abwicklungsanstalt with L3.2B (1.9%), Oversea-Chinese Banking Co. with L3.2B (1.9%), Bank of Nova Scotia with L3.0B (1.8%), and Nationwide Building Society with L2.8B (1.7%).
