Money fund pioneer The Reserve goes live this week with its new Reserve Treasury & Repo Money Market Fund, which will initially offer an Institutional Class (TRPXX), a Liquidity Class (TRLXX), and R Class (Retail, TRRXX). The Institutional class will have a $35 million minimum and charge 13 basis points, the Liquidity I class will have a $20 million minimum and charge 16 bps, and the R will have no minimum and charge 1.06% (it includes a 0.25% 12b-1 fee).
HighMark Capital Management, a subsidiary of Union Bank of California, has also just filed to launch HighMark Treasury Plus Money Market, which, like other HighMark funds, will offer Retail A, Fiduciary and S (Sweep) shares. This fund too will be a Treasury & Repo offering, and will be distributed by PFPC Distributors. The Retail A shares will charge 0.55%, the Fiduciary shares will charge 0.30%, and the Sweep shares will charge 0.85%.
Interest in the formerly tiny Treasury and Government money market fund sector exploded in the second half of 2007 as as a flight to quality cast suspicion of anything not government guaranteed. While the shift into these funds has abated, concerns about volatile price swings in Treasury securities and asset flows in Treasury funds have no doubt increased the attractiveness of a repurchase agreement (repo) "liquidity bucket". (Repo holdings, which make up 22.0% of all taxable money fund holdings, tend to have overnight maturities, making them the most liquid of money fund investments.)
Treasury money fund assets increased by over 136% over the 12 months through 4/30/08, according to Money Fund Intelligence, while Government money fund assets increased by 130%. This compares to an increase in "Prime" money fund assets of 26% during the past year. Treasury and Government fund assets declined sharply in April, however, down 5.9% and 3.9%, respectively, as the concerns over the safety of money funds have subsided.
