State Street Launches EUR Govt Fund
A press release entitled, "Fitch Rates State Street EUR Government Liquidity Fund 'AAAmmf'" tells us, "Fitch Ratings has assigned State Street EUR Government Liquidity Fund a Money Market Fund 'AAAmmf' Rating. The fund is managed by State Street Global Advisors Limited. The fund is expected to become open to investors on 22 January 2024. Fitch used the fund's filed final prospectus and investment guidelines for its analysis." It explains, "The 'AAAmmf' rating reflects Fitch's review of the fund's investment guidelines, expected credit quality and diversification, low exposures to interest-rate and spread risks, and high levels of daily and weekly liquid assets that are consistent with its shareholder profile. The rating also considers the capabilities and resources of State Street Global Advisors Limited in managing the assets of the fund.... The fund expects to seek and maintain diversified, high-credit quality portfolios that are consistent with Fitch's criteria for 'AAAmmf' rated MMFs, by investing in a range of euro-denominated securities issued or guaranteed by highly rated sovereigns, agencies or supranational organisations, as well as in related reverse repurchase agreements that are collateralised by highly rated sovereigns, agencies or supranational organisations. Counterparties of reverse repurchase agreements are of high credit quality, with credit ratings at 'F1' (or equivalent) or above, based on Fitch's analysis." It adds, "The fund expects to maintain sufficient daily and weekly liquidity to meet investors' flows and to be consistent with liquidity requirements for the 'AAAmmf' rating. As the fund accepts new investors following its launch date, shareholder concentration may be high initially. However, Fitch expects State Street Global Advisors Limited to take this into consideration when managing liquidity conservatively.... The fund is expected to limit interest-rate and spread risk by maintaining weighted average maturities (WAM) and weighted average lives (WAL) at below 60 days and 120 days, respectively.... The fund is a sub-fund of the Irish-domiciled umbrella fund, State Street Liquidity PLC, which is an open-ended investment company that falls under the UCITS directive. The fund is authorised and supervised by Central Bank of Ireland as public debt constant net asset value money market fund as defined in Regulation (EU) 2017/1131. The fund's investment objective is to maintain a high level of liquidity, preserve capital and provide a return in line with euro government money market rates. The fund size is expected to be close to EUR100 million at launch."
