As we wrote in the October issue of our Money Fund Intelligence newsletter, a recent SEC filing for the J.P. Morgan Money Market Funds says their prospectuses are, "hereby amended to include the following to provide information on how the adviser integrates environmental, social and governance factors into each Fund's investment process." The filing says, "As part of its security selection strategy, the adviser also evaluates whether environmental, social and governance factors could have material negative or positive impact on the cash flows or risk profiles of many companies in the universe in which the Fund may invest. These determinations may not be conclusive and securities of issuers that may be negatively impacted by such factors may be purchased and retained by the Fund while the Fund may divest or not invest in securities of issuers that may be positively impacted by such factors." We learned of the filing from Henry Shilling of SustainableInvest.com. While we don't believe this makes the JPMAM funds an "ESG" fund, we do think this is the path most fund managers are taking, incorporating ESG principles into their credit research. One reason it that the growth of the handful of specialized ESG money funds has been dismal to date. The three funds that have launched to date have yet to bring in substantial assets and remain under $1 billion (or on the launchpad). BlackRock LEAF Direct (LEDXX) is currently $487 million while BlackRock LEAF Inst (LEFXX) is $146M. DWS ESG Liquidity Cap (ESIXX) is $234M, DWS ESG Liquidity Inst (ESGXX) is $171M and DWS ESG Liquidity Inst Res (ESRXX) is $57M. Meanwhile, State Street ESG Liquid Reserves Fund has yet to report any assets.

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