First American on Quarter-Ends
First American Funds Jeff Plotnik wrote recently on, "The Dynamics of Quarter-End Investing for Money Market Funds." He tells us, "If you are a frequent investor in money market funds, you may have noticed that making large deposits over quarter-end periods can sometimes be a challenge. That challenge is a result of decreased supply from broker/dealers and issuers of overnight investment products, combined with increased demand from money market fund managers and short-term investors for those same investments. Those dynamics are the result of a stringent regulatory environment for many of the industry's issuers. Quarter ends are a key financial reporting date for banks, broker/dealers and issuers of overnight investment products. Reported financial statements represent an overview of a company's financial health at quarter end. Firms manage their balance sheets to enhance certain capital/leverage ratios and other key financial metrics that the regulators and the general public analyze to determine their financial strength. Ultimately, the exercise of quarter-end balance sheet management will limit the short-term investment options that money market fund managers utilize on a day-to-day basis. The quarter end dates that are significant for money market fund investing are the last business days of March, June, September and December, with June and December being the most challenging."
