1 min readOver the past year, the money fund industry has been shaken by credit and liquidity issues that resulted in more than $50 billion in direct support from fund sponsors. This “behind the curtain” support has tested the resolve of many money fund families and affected the industry in a variety of ways. As a result,…
2 min readExecutive Summary This update to our original whitepaper published in April 2006 seeks to answer two questions: 1) Are prime funds getting safer? 2) Are all prime funds alike? The general risk profile of the large prime fund group has improved since our last publication. The average fund now has better liquidity, better credit quality…
2 min readThe month of September was one that brought several important shifts to the economic and credit landscape and it’s no coincidence that it marked the one-year anniversary of a near global financial meltdown that was averted by unprecedented government support. Analyzing side-by-side Federal Open Market Committee statements from August 12th and September 23rd reveals language…
3 min readConfession: This eye-catching title is not our invention. It is borrowed from a panel discussion on money market fund distribution strategies held at the Crane Data Money Fund Symposium in Providence, RI in late August. We, however, think it brings out a salient point – growth for growth’s sake can be a recipe for disaster….
2 min readOn June 24, 2009, the Securities and Exchange Commission (SEC) announced the long-anticipated proposed amendments to the 2a-7 rule that regulates money market mutual funds. The proposed changes were prompted by the extraordinary events in the money fund industry that took place after the Reserve Primary Fund’s net asset value (NAV) dropped below a constant…
1 min readIt likely goes without saying that here at Capital Advisors Group we have been keeping a very close watch over the controversy that is heating up over the regulatory structure of money market funds. With the Obama Administration now stepping in to exercise its power to question and potentially modify SEC suggested changes to money…
1 min readIn our view, one of the most effective government programs enacted during the credit crisis, and likely the one that impacted Treasurers’ cash management strategies the most, was the temporary government guarantee program for money market funds. This one-year program, which is set to expire on September 18th of this year, has helped in large…
2 min readAs a treasurer or a CFO, what would your reaction be if you were presented with the following description of a cash investment option? It’s a structured fixed income product sold as equity without a stated maturity date. It makes no commitment to daily liquidity, nor does it guarantee principal protection and it pays a…
2 min readExecutive Summary Tip No. 1: In a market that lacks liquidity, CPFF means liquidity. Tip No. 2: When a firm can no longer access CPFF, liquidity may deteriorate rather rapidly. Tip No. 3: Despite the appearance to the contrary, not all CPFF-eligible issuers are the same. Tip No. 4: CPFF eligibility and credit ratings are…
2 min readAs many recipients of our monthly newsletter are aware, Capital Advisors Group serves a wide range of clients, from private to public companies with small to large cash balances and institutions of all stages in between. Before you read further I’d like to stress that, given the current state of the credit markets, we’re stressing…