Earlier this month, Capital Research and Management Company, manager of the American Funds filed to launch Capital Group Central Cash, an internal money market fund open only to other funds in the American Funds Group. The filing says, "The investment objective of the fund is to provide you with a way to earn income on your cash reserves while preserving capital and maintaining liquidity. The fund is an institutional money market fund. The net asset value of the fund's shares will "float," fluctuating with changes in the value of the fund's portfolio securities. Shares of the fund are primarily purchased by other funds and investment vehicles managed by the fund's investment adviser and its affiliates and are not available to the public." The new fund registration continues, "While it has no present intention to do so, the fund's board may change the fund's objective without shareholder approval upon 60 days' written notice to shareholders. The fund is an institutional money market fund managed pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended ('1940 Act'). The net asset value of the fund's shares will fluctuate with changes in the value of the fund's portfolio securities. If the fund's weekly liquid assets fall below a certain threshold, the fund may impose a liquidity fee on redemptions and/or suspend redemptions, as discussed further in paragraphs below." It adds, "In accordance with applicable rules and regulations relating to money market funds, the fund will maintain a dollar-weighted average maturity of 60 days or less and its dollar-weighted average life will not exceed 120 days. Additionally, the fund will hold at least 10% of its total assets in daily liquid assets and at least 30% of its total assets in weekly liquid assets. For purposes of these limits, daily liquid assets and weekly liquid assets are generally defined to include cash, U.S. Treasuries, certain other government securities, as well as other securities that can be readily converted to cash within one or five business days, respectively. Capital Research and Management Company, an experienced investment management organization founded in 1931, serves as the investment adviser to the fund and other funds, including the American Funds. Capital Research and Management Company is a wholly owned subsidiary of The Capital Group Companies, Inc. Class M shares are generally available for purchase only by funds and other investment vehicles managed by the investment adviser or its affiliates, and therefore are not available to the public." For more on "internal" money market funds, see our Jan. 5, 2017 News, "Internal and Private Money Funds Revealed; TDAM Changes to TD; TRP."
