A press release, "BlackRock Expands Access to Cash Management Strategies with Launch of Active Money Market ETFs," which is subtitled, "Funds combine the stability of money market funds with the simplicity and convenience of the ETF wrapper," says, "BlackRock expanded the way investors can manage their cash with the launch of two money market ETFs, including the industry's first prime money market ETF. The iShares Money Market ETFs -- the iShares Prime Money Market ETF (PMMF) and the iShares Government Money Market ETF (GMMF) -- combine the quality and liquidity of regulated money market funds with the transparency and efficiency of the ETF structure."
Global Head of Product and Platform for BlackRock's Cash Management Business Jon Steel, comments, "Cash is a fundamental building block of investor portfolios, providing stability and liquidity. In 2024, U.S. money market funds surpassed $6 trillion [note: Crane Data shows the total at over $7 trillion] in assets, fueled by the appeal of short-term interest rates. As investors seek smarter ways to manage their cash, iShares Money Market ETFs provide a convenient and transparent solution."
The release explains, "The iShares Money Market ETFs adhere to the strict guidelines of money market fund regulation under Rule 2a-7 under the Investment Company Act of 1940 and enable investors to diversify their cash holdings beyond traditional deposit accounts. Actively managed by BlackRock's Cash Management Group, the ETFs combine BlackRock's leading cash management expertise with the firm's expansive capabilities in ETFs."
Josh Penzner, Managing Director, iShares Fixed Income at BlackRock adds, "Investors are continuously turning to iShares in their search for new solutions and opportunities to meet their financial goals. iShares Money Market ETFs unlock access to professional grade cash management strategies in the convenience of the ETF wrapper, providing additional choice and flexibility for investors to dynamically manage their cash needs and quickly adapt to shifting market conditions." The release also states, "BlackRock's Cash Management Group oversees nearly $1 trillion in cash strategies for a diverse range of investors, including corporations, banks, foundations, insurance companies and public funds."
The website for the new iShares Prime Money Market ETF asks, "Why PMMF?" It explains, "1. Money market investment: Allows investors to diversify their cash beyond traditional deposit accounts, while adhering to the strict SEC money market rules under Rule 2a-7. 2. Choice: As one of the industry's first money market ETFs, PMMF provides similar exposure as traditional money market funds, offering investors choice and flexibility in how they manage their cash. 3. Combined expertise: Leverage BlackRock's ETF expertise, backed with decades of cash management experience.... The iShares Prime Money Market ETF seeks as high a level of current income as is consistent with liquidity and stability of principal."
For more see these Crane Data News pieces, "VettaFi Discusses Money Market ETFs" (12/11/24), "Dec. MFI: Assets Break $7.0 Tril; Top 10 of 2024; BlackRock MM ETFs" (12/6/24), "BlackRock Debuts First Euro MM ETF" (12/5/24), "FT on BlackRock Money Market ETFs" (11/18/24), "November BFI: Bond Funds Hit by Election; ETF Trends MM Substitutes" (11/15/24), "BlackRock Files for Money Market ETFs" (11/12/24) and "Texas Capital Launches Govt MM ETF" (9/26/24).
In other news, website Ledger Insights asks, "Has Ondo cracked the code on 24/7 tokenized money market fund redemptions?" They write, "Tokenization startup Ondo Finance has launched a novel way to enable the 24/7 redemption of third party money market funds (MMF). It has collaborated with Franklin Templeton, WisdomTree, Wellington Management (Sg) and FundBridge Capital to include their tokenized money market funds (MMF) as collateral for its own MMF, OUSG. As part of its new Ondo Nexus offering, if someone wants to redeem the Franklin Templeton FOBXX, they essentially sell it to Ondo which is happy to hold it in the short term, given it can be used as collateral for OUSG."
The piece explains, "Until now OUSG was primarily backed by BlackRock's tokenized MMF BUIDL. This looks like a win-win for both Ondo and the asset managers. It solidifies Ondo as an innovator, and we would be shocked if money wasn't passing its way for providing the service to the asset managers, even if it means the asset managers wave some of the fees they might otherwise charge Ondo."
It says, "Take Franklin Templeton. Its terms say the FOBXX MMF can only be redeemed during working hours and the money can take up to seven days to reach your account. If users favored other funds because they could be redeemed faster, not any more. This was FOBXX's biggest drawback. It is more highly regulated than other tokenized funds, so theoretically should be safer. FOBXX also doesn't have BlackRock's BUIDL massive $5 million minimum investment and is accessible by retail investors. Plus, it's available on far more blockchains."
Nathan Allman, CEO of Ondo Finance comments, "We are excited to further strengthen our relationships with Franklin Templeton, WisdomTree, Wellington Management and Fundbridge Capital, while driving the convergence between traditional finance and DeFi. By diversifying our eligible collateral, we are building modular infrastructure that enables shared redeemability of tokenized Treasuries to stablecoins across products and supports a wide range of future tokenized financial offerings."
The article adds, "Ondo is quite lightly regulated for a company with almost $640 million in assets under management. OUSG, the token that's part of today’s announcement, has assets of $253 million. While the fund is U.S. based, it relies on regulatory exemptions so is only available to accredited investors. Its other token, USDY, is also an exempt fund and as a result is only available to non-U.S. investors. USDY LLC is registered with FinCEN."
