The past month has been a busy one for money fund prospectus changes and SEC filings. The flurry of recent updates involves Treasury money fund "soft" closings, fee waivers related to ultra-low yields, and disclosures related to the U.S. Treasury's Guaranty Program for Money Market Funds. Consulting firm Strategic Insight's SimFund Filing has documented a number of these, and filings may also be seen via the SEC's EDGAR website. Below, we review some of the most recent filings.
Since the start of December, filings have been made by Allegiant, BlackRock, Calvert, Centennial/Oppenheimer, Columbia, Delaware, First American Funds (FAF), Fidelity, Mainstay, Neuberger Berman, Pioneer, Rydex, Schwab, Security Investors, State Street Global, Transamerica, and Wilmington Trust. Most involve fee waiver statements such as the one from Oppenheimer Institutional Money Market Fund, which says, "The Manager has voluntarily undertaken to waive fees to the extent necessary to assist the Fund in attempting to maintain a positive yield. There is no guarantee that the Fund will maintain a positive yield. That undertaking may be amended or withdrawn at any time." Filings do not necessarily mean that an advisor needs to use fee waivers, just that they are prepared to.
A number of other filings involve disclosures related to the U.S. Treasury's Temporary Guaranty Program for Money Market Funds, which virtually every money fund has elected to continue participation in. Funds are amending their fee structures to include payments to the Treasury and to exclude these payments from waivers. Many of the filings include all three popular actions -- closing Treasury funds, waiving fees, and allowing fee payments to the Treasury.
One example is Fidelity's prospectus supplement, which (in addition to implementing a "soft" close on its Treasury fund) says, "The Program extension requires each participating fund to pay the U.S. Department of Treasury a fee equal to 0.015% based on the number of shares outstanding as of September 19, 2008. This expense will be borne by each fund without regard to any expense limitation currently in effect for a fund. This payment is in addition to the fee paid by each participating fund at the start of the Program in October 2008."
