The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:An $85B-AUM Money Fund Trio Soft-Closes Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, April 01, 2020

An $85B-AUM Money Fund Trio Soft-Closes

News summary by MFWire's editors

A mutual fund industry titan is soft-closing several rapidly growing money market funds in light of plunging interest rates during the ongoing coronavirus crisis.

Abigail Pierrepont Johnson
FMR (dba Fidelity Investments)
Chair, President, CEO
Yesterday, the Fidelity [profile] team closed off three Treasury money funds to most new investors, the Financial Times and Reuters report. The three funds — the Fidelity Treasury Only Money Market Fund, the Fidelity Institutional Money Market Treasury Only Portfolio, and the Fidelity Institutional Money Market Treasury Portfolio — have $85 billion in combined AUM. All three funds remain open to existing shareholders and to participants whose 401(k), 403(b), or 457 plans offer the funds.

In a statement, a Fidelity spokesman confirmed that existing shareholders of all three funds "retain full access to the funds in their accounts and there are no restrictions on redemptions."

Fidelity's move comes after the three funds saw their assets jump $23 billion (37.1 percent) last month as investors rushed to safety during the market's COVID-19-inspired woes. According to the FT and Reuters, the Fidelity team is explaining the move to investors as a way to avoid have to buy more low-yielding Treasuries (thus lowering the funds' performance) in light of lower (and sometimes even negative) yields on U.S. Treasuries.

"We are taking these actions because we believe they are in the best interest of the funds' shareholders of at this time ... [W]ith the recent reduction in the federal funds rate and yields on Treasury securities are historic lows, Fidelity believes that limiting new purchases into the Treasury money market funds will help preserve the returns of existing fund shareholders," a Fidelity spokesman tells MFWire via an emailed statement. "Restricting inflows will help reduce the number of new Treasury securities that the funds will need to purchase. That's important because the newer issues generally have lower yields than the funds' current holdings, and as such they would affect the funds' ability to continue to deliver positive net yields to shareholders."

"We will continue to monitor market conditions and will re-open the funds to new investors when we determine that it is appropriate to do so," the spokesman adds.

Editor's Note: A prior version of this misclassified the three money funds in question and used misleading phrasing to describe what Fidelity is changing with the funds. Fidelity soft-closed the three funds, which are all Treasury money market funds. 

Edited by: Neil Anderson, Managing Editor

Stay ahead of the news ... Sign up for our email alerts now

 Do You Recommend This Story?

Return to Top
 News Archives
2022: Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Add to My Yahoo!
follow us in feedly

  1. 2022 ICI Leadership Summit, May 25-26
  2. ALFI Roadshow to New York, May 25
  3. 2022 IDC Fund Directors Workshop, May 26
  4. Irish Funds Annual Global Funds Conference 2022, May 30-31
  5. WealthManagement Edge, May 31 - June 3
  6. MFDF 2022 Fund Governance and Regulatory Insights Conference, Jun 8-9
  7. 28th annual Expect Miracles East Coast Classic, June 9
  8. 2022 Sohn Investment Conference, June 9
  9. IDC webinar - Cybersecurity for Fund Boards: The Current Landscape, June 9
  10. MMI webinar - Driving Business Value with Artificial Intelligence & Data, June 15
  11. MFDF webinar - Key Takeaways From Morningstar's 2021 Annual Fund Fee Study, June 16
  12. MFDF Director Discussion Series - Open Forum (Chicago), June 21
  13. 2022 MMI Emerging Asset Managers Forum, June 23
  14. MFDF In Focus: Capitol Hill, A Conversation with Congressman Bryan Steil, June 28
  15. Financial Planning INVEST, Jun 28-29
  16. MFDF webinar - Differentiating Mutual-Fund-to-ETF Conversions, July 19
  17. MFDF Director Discussion Series - Open Forum (New York), July 20
  18. 2022 MMI Distribution Leadership Forum, Jul 20-21
  19. MFDF webinar - Fund Boards' Oversight of Investment Performance, July 28
  20. MFDF webinar - Performance, Perception and Manager Selection, September 14
  21. 2022 ICI Tax and Accounting Conference, Sep 18-21
  22. 5th annual Expect Miracles Atlantic Coast Classic, October 3
  23. Nicsa Fearless Leadership Symposium, Oct 6-7
  24. 2022 MMI Annual Conference, Oct 19-21
  25. 2022 IDC Fund Directors Conference, Oct 24-26
  26. 18th annual Expect Miracles Wine & Spirits Event, October 27

©All rights reserved to InvestmentWires, Inc. 1997-2022
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use