Fitch Rates UBS Select Funds AAAmmf
A new press release entitled, "Fitch Assigns New Ratings to Nine UBS Money Market Mutual Funds," reads, "Fitch Ratings has assigned a 'AAAmmf' rating to the nine UBS money market mutual funds listed below -- UBS Select Prime Preferred Fund (SPPXX); UBS Select Prime Institutional Fund (SELXX); UBS Select Prime Investor Fund (SPIXX); UBS Select Treasury Preferred Fund (STPXX); UBS Select Treasury Institutional Fund (SETXX); UBS Select Treasury Investor Fund (STRXX); UBS Select Government Preferred Fund (SGPXX); UBS Select Government Institutional Fund (SEGXX); and UBS Select Government Investor Fund (SGEXX). The funds are registered 2a-7 money market funds managed by UBS Asset Management (Americas) Inc. (UBS AM). UBS Select Government Preferred Fund, UBS Select Government Institutional Fund and UBS Select Government Investor Fund became legally effective on March 29, 2016. All funds are feeder funds that invest all of their assets in a corresponding master fund with the same objective as the fund." Fitch continues, "The 'AAAmmf' rating assignments reflect: The funds' overall credit quality and diversification; Low exposures to interest rate and spread risks; Holdings of daily and weekly liquid assets consistent with shareholder profiles and concentrations; Maturity profiles consistent with Fitch's 'AAAmmf' rating criteria. The funds seek to maintain diversified, high credit quality portfolios consistent with Fitch's criteria for 'AAAmmf' rated MMFs, by investing exclusively in first-tier rated securities with limited exposure to individual issuers. The funds' Portfolio Credit Factors (PCF) are in line with Fitch's 'AAAmmf' rating criteria of 1.50 or less as of Feb. 29, 2016. The PCF is a risk-weighted measure of a fund's portfolio assets that accounts for the credit quality and maturity profile of a fund's portfolio." They add, "The funds seek to limit interest rate and spread risk by maintaining weighted average maturities (WAM) and weighted average lives (WAL) below 60 days and 120 days, respectively. The funds seek to maintain sufficient levels of daily and weekly liquidity to meet investors' flows. Specifically, the funds invest at least 10% of their total assets in securities offering daily liquidity, and at least 30% in securities maturing within seven days or other qualifying liquid assets. As UBS Select Government Preferred Fund, UBS Select Government Institutional Fund and UBS Select Government Investor Fund accept new investors following the funds' launch shareholder concentration may be high. However, UBS will be managing liquidity conservatively with this consideration in mind. The funds seek to provide current income in line with prevailing money market rates, while aiming to preserve capital consistent with these rates and to maintain high degrees of liquidity. Assets under management as of February 29, 2016 for the Select Prime Funds and Select Treasury Funds were $15.2bn and $10.8bn, respectively." In other news, Institutional Investor posted a brief, "Investor Sentiment Remains Volatile," which discusses a steep drop in money fund assets the past week.
