News Archives: October, 2009

The Investment Company Institute released its latest weekly and monthly statistics on money market mutual funds yesterday afternoon. The September totals showed the largest decline in money fund assets since September 2008, $126.7 billion, while the latest weekly numbers showed assets declining marginally, down $2.27 billion to $3.370 trillion, in the week ended October 28. ICI also released its "Portfolio Holdings of Taxable Money Funds" statistics, which show that CDs were the only segment to show growth during September while Repo holdings plunged.

Certificates of Deposit (CD), including Eurodollar CD, holdings rose $11.4 billion to $650.4 billion, or 21.6%, becoming the largest holding in money funds for the first time ever. U.S. Government Agency Securities, at $648.7 billion, or 21.6%, ranked a close second in holdings among the $3.008 trillion in taxable money market funds as of Sept. 30. Government Agency holdings have fallen by $124.8 billion year-to-date, but they remain $118.7 billion above their level of a year ago. CD holdings are $172.0 billion higher than their year ago level.

Commercial Paper ranks third among taxable money fund holdings categories with $523.7 billion, or 17.4%, which represents approximately 40.9% of the $1.280 trillion CP market (see Fed statistics here). Holdings of Repurchase Agreements (Repo) plunged in September, falling $82.3 billion to $505.3 billion, or 16.8% (4th place) of money funds. Treasury Bills and Securities totalled $435.4 billion, or 14.5% of holdings (5th), while Corporate and Bank Notes ($121.7 billion and $49.9 billion, or 4.0% and 1.7%, respectively), and Other securities rounded out the totals.

Year-to-date through Sept. 30, ICI's monthly stats show money fund assets have declined by $406.9 billion, or 10.6%, while YTD through Oct. 28, Crane Data's calculations on ICI's stats show money funds down by $460 billion, or 12%. Institutional assets have declined by $212 billion, or 8.5%, while Retail assets have declined by $258 billion, or 19.1%. ICI's monthly statistics also show that "Liquid Assets of Stock Mutual Funds, which track the percent of "cash", has returned to near record lows at 3.8% of assets.

"SIFMA Issues Amended and Restated Money Market Trading Practice Guidelines" says a news release posted by the former Bond Market Association. The trade group states, "The Securities Industry and Financial Markets Association (SIFMA) today released amended and restated money market guidelines. These guidelines have been adopted and approved by SIFMA's Money Market Committee, and supersede and replace the Money Market Trading Practice guidelines originally adopted on Oct. 26, 2007.... The Guidelines are broken out into three primary areas: Promoting an Efficient and Liquid Market, Controls and Procedures, and Settlement and Fails."

Robert Toomey, managing director and associate general counsel for SIFMA's Government and Funding Division, said that these guidelines were designed to further the efficient trading of money market instruments. "Although the Guidelines are non-binding, we recommend that all parties trading in money market instruments abide by these Guidelines. An efficient, liquid market is critical to the smooth functioning of the money markets, and we believe that the revised Guidelines provide needed updates and are reflective of current market good practices."

The new Guidelines, found at, are entitled, "Amended and Restated Money Market Trading Practice Guidelines." They state, "Below are the amended and restated money market guidelines.... The changes herein include deletions of certain 2007 Guidelines that are no longer applicable, modifications of certain 2007 Guidelines and inclusion of new Guidelines. It is important that personnel at your firm, especially those on money market trading desks, be informed of these Guidelines. These Guidelines are designed to further the efficient trading of money market instruments. Therefore, although the Guidelines are non-binding, we recommend that all parties trading in money market instruments abide by these Guidelines."

SIFMA says, "An efficient, liquid market is critical to the smooth functioning of the money markets. All money market participants should attempt to follow best practice guidelines to ensure the best possible liquidity of the money markets: All guidelines which concern trading in money markets apply equally to all market participants ...; Dealers have the responsibility and the obligation to keep their offerings updated at all times ...; Markets may be either primary or secondary and should be clearly labeled as such; Security type or any restrictions as to the resale affecting the secondary market of money market instruments should be stated in the general description of the offering; and, All outside vendor parameters shall apply when using those systems."

It says, under "Controls and Procedures," "Money market participants should have separate reporting lines for settlement/clearing staff and the trading desk; Details on executed trades should be provided as soon as reasonably practicable; CUSIP numbers or standard identifiers for all types of money market instruments, including but not limited to commercial paper and certificates of deposits should be provided promptly after details of executed trades are provided; If applicable, the federal securities law exemption pursuant to which the money market instrument is being offered and/or resold should be clearly indicated [e.g., Rule 144A, Section 4(2), Section 3(a)(3), Section 3(c)(7), etc.)]."

Finally, under "Settlements and Fails," the document says, "All market participants' trades should be entered into trading systems promptly and sent without delay to the operations area to promote timely settlement; Market participants should have internal trading 'cutoff' times that leave sufficient time for settlements via Fedwire, DTC or any other delivery system; All deliveries must comply with minimum denominations as stated in the offering document or dealer agreement; Primary paper issuance may be subject to a minimum size determined by the issuer; Market participants should have internal policies regarding deliveries that are 'non-standard' or that take place after normal cutoff times that reflect appropriate risk management; and, Finance charges or other costs associated with fails should be mutually agreed upon by the parties involved and should reflect current settlement practice."

TD Ameritrade Holding Corporation reported earnings yesterday, and the company's conference call discussed its strategy of pushing client assets from money market funds into bank MMDAs (money market deposit accounts). We quote the content relating to money markets from the call below.

TD Ameritrade CEO Fred Tomczyk said, "The near zero interest rate environment also brought an opportunity to do something positive for our clients and for the firm. Clients want capital preservation, liquidity and yield, in that order. Our new cash strategy moved $10 to $14 billion of our cash sweep balances to an insured MMDA product that better meets client needs and positions us well for a rising interest rate environment.... We ended the year where we began, with more than $1 billion in liquid assets."

He continued, "Our cash management strategy also helped mitigate the impact of near zero interest rates. As a result, we have fewer client assets in money market mutual funds and more with higher yielding MMDA balances, a product that offers advantages for both the client and for us. We see considerable upside for our business in a rising interest rate environment.... Given where we are in the interest rate cycle, the odds of an interest rate increase are higher than the odds of an interest rate decrease at this point. And the upside potential of an increase in interest rates is significant."

CFO Bill Gerber said, "If you can grow balances, you can minimize and sometimes reverse the impact of the NIM [net interest margin] contraction on spread-based revenue.... The primary driver of our NIM rate contracting was a $6 billion increase in our MMDA portfolio from the end of June. This is a 25% increase in the portfolio size, primarily a result of our cash management strategy. As we invested these proceeds, the rate we received was lower than our prevailing NIM. So the rate contracted on the whole MMDA portfolio. This is actually a good problem to have as our portfolio is set up nicely for a rising rate environment."

He added, "In December, we are going to begin using the term Insured Deposit Account, or IDA, instead of MMDA, as this is the name under which we market the product to our clients.... The increase in MMDA balances corresponds with the decrease in money market fund balances. This was our stated goal, and we have achieved it. Since we announced the program, MMDA has grown $10.6 billion. We are progressing nicely through our current process of ongoing marketing efforts, explaining the benefits of the MMDA program to clients in an attempt to drive more assets there. And we expect to complete the next phase in January 2010, when we move the $4.6 billion now on our balance sheet to the MMDA program. We still expect continued growth in our MMDA balances as client assets grow and marketing efforts continue. Finally, ... total client cash is up about $5 billion since March."

During the Q&A, Gerber said, "Money market fee waivers were $20 million this quarter, which was identical to last quarter." They noted that, "Six billion was the shift from money fund clients to MMDA." Finally, TDA said there were, "Reserve Fund charges [to protect investors from "breaking the buck"] of $36 million in last year's numbers." See too The Wall Street Journal's story "Ameritrade 4Q Profit Down But Trading Strong".

We recently stumbled across a video interview on Invesco AIM's website that features Karen Dunn Kelley, money fund veteran and now CIO of Worldwide Fixed Income. Dunn Kelley talks about Invesco AIM's processes and avoidance of troubles, about managing liquidity, and about the future of fixed income. We transcribe the money fund-related highlights below.

Interviewer Lynn Bernard says, "Not long ago, investors were shocked to read in the headlines that billions of dollars were being pumped into money market funds to protect them. But Invesco Worldwide Fixed-Income did not have to prop up its money market products. Tell me about the firm's emphasis on safety."

Dunn Kelley responds, "We've been in this business for 29 years. And it is really the beginning of that business where we really started understanding what safety was about. The founder of that business used to say, 'The best is none too good for our money market funds.' Therefore we structure them in such a way that we are one of the few money market managers that separated out credit from portfolio management."

She continues, "The credit people understood minimal credit risk. Money market funds are obligated to buy minimal credit risks.... That risk ... has to be understood by the adviser, not by any third party, rating agency or credit advisers.... The portfolio management understood that the three philosophical tenents of money market management were safety, liquidity and yield."

"Safety is a very small equation and it says, 'Portfolio assets, plus portfolio configuration, plus operational risk, has to equal a dollar, a euro, a sterling, whatever your currency is. Liquidity means that those customers want that dollar back on a daily basis. And yield is really a byproduct of those two. So when you start with a structure that understands the separation, and creates a culture of minimal credit risk and a philosophy that augments it, you clearly have the ability to create and provide safety," says Dunn Kelley.

Finally, she says, "We think that there are two major reasons that fixed income is going to be a very important asset class going forward. The first is the demographics ... and then the other is risk appetite.... I think that fixed-income is going to continue to grow and is going to be a very important asset class."

The number of institutions finding ways around the FDIC's now $250K limit to provide higher levels of insurance coverage has jumped in the past year as ultra-low interest rates fuel growth in the "bankerage" brokerage sweep marketplace. The latest entrant is USA Mutuals with its new Insured Cash Shelter Account, which "provides access up to $10 million of Federal Deposit Insurance Corporation ('FDIC') coverage through one convenient account." Evolve Bank & Trust's Insured Deposit Program has also recently revamped its product and website.

Eric Lansky, president of USA Mutuals Partners, tells us, "The Insured Cash Shelter Account, which provides up to $10mm in FDIC insurance, next day liquidity and a current yield of 40 bps, was initially rolled out for the family office and advisor marketplace. However there has been an increasing interest among municipal and corporate clients. To help meet such demand, USA Mutuals has signed distribution agreements with Vanderbilt Avenue Asset Management and Cash Investment Advisor and former Moody's Money Fund Analyst Doug Rivkin."

USA Mutuals uses IDC Deposits as its provider. The website says, "USA Mutuals Partners Insured Cash Shelter Account (ICSA) seeks to provide a competitive level of interest in a federally insured account with liquidity and safety. ICSA is able to provide FDIC insurance protection on deposits beyond the current $250,000 limit for each category of legal ownership by electronically linking to multiple 'well-capitalized' FDIC insured banks and savings institutions. By spreading assets among multiple institutions, ICSA is able to offer a higher level of FDIC insurance coverage compared to a deposit in a single banking institution."

Evolve Bank & Trust, which uses Deutsche Bank's program underneath, says on its site says, "Protect Your Cash Portfolio! In today's tremendously turbulent economy, many investors continue managing portfolios defensively, emphasizing liquidity and capital preservation rather than seeking returns that present any degree of downside risk. With cash awaiting reinvestment, investors with larger cash balances need a different approach. Evolve Bank & Trust offers these investors a unique cash strategy investment option to protect their entire multi-million dollar deposits through the Insured Deposit Program."

It adds, "The Insured Deposit Program ('IDP') is one of the most prudent cash management programs for high net worth individuals, financial institutions, corporations, trusts, and municipalities, to benefit from leveraging Federal Deposit Insurance Corporation ('FDIC') pass-through insurance coverage. As of June 30, 2009, the IDP maintained approximately $6.9 Billion of assets under management."

Two of the largest players in the "FDIC insurance amalgamation" business are Promontory InterFinancial Network, with its Insured Network Deposits (IND) product (as well as its CDARS CD product), and Double Rock, formerly Reserve Management Corp., with its Liquid Insured Deposits. Crane Data estimates that almost $600 billion is currently held in FDIC-insured "sweep" programs offered through brokerages. For more info on rates, ask to see our weekly Brokerage Sweep Intelligence.

Federated Investors, the 3rd largest money fund manager and bellwether for the overall money fund industry, reported 3rd quarter earnings last night. The Pittsburgh-based company hosted its quarterly earnings conference call this morning, and discussed money fund asset flows, fee waivers, and other factors impacting the money markets.

CEO Chris Donahue's money fund related comments include, "It is clear that money funds are a vital part of the financial system.... We expect this core business to grow over time with higher highs and higher lows as it has over the past 30+ years. We will be looking for opportunities to add assets ... including MMMF consolidtion deals." He said in the Q&A, "We expect that you would continue to see net redemptions, but to a modest extent." Finally, he added, "We don't think that there will be a capital requirement or reserve requirement.... On the liquidity bank, we can only say we're aware that people are working on it."

Federated's release says, "Money market assets in both funds and separate accounts were $318.1 billion at Sept. 30, 2009, up $30.3 billion or 11 percent from $287.8 billion at Sept. 30, 2008 and down $28.3 billion or 8 percent from $346.4 billion at June 30, 2009. Money market mutual fund assets were $287.6 billion at Sept. 30, 2009, up $28.4 billion or 11 percent from $259.2 billion at Sept. 30, 2008 and down $25.2 billion or 8 percent from $312.8 billion at June 30, 2009." Crane Data's Money Fund Intelligence XLS shows that overall money fund assets decreased by 7.9% in the third quarter and have increased by 3.5% over the past 12 months.

It continues, "For Q3 2009, revenue decreased by $12.3 million or 4 percent from the same quarter last year. The decrease in revenue primarily reflects $36.5 million in voluntary fee waivers related to certain money market funds in order to maintain positive or zero net yields. The fee waivers were partially offset by a related reduction in marketing and distribution expenses of $27.9 million such that the net impact on operating income was a decrease of $8.6 million. Lower average equity managed assets also contributed to decreased revenue. These decreases were partially offset by increased revenue from higher average money market and fixed-income managed assets."

Federated cautions, "Fee waivers to produce positive or zero net yields may increase and such increases could be significant. The amount of these waivers will be determined by a variety of factors including available yields on instruments held by the money market funds, changes in assets within money market funds, actions by the Federal Reserve and the U.S. Department of the Treasury, changes in the mix of money market customer assets, changes in expenses of the money market funds and Federated's willingness to continue these waivers."

They say, "For Q3 2009, Federated derived 63 percent of its revenue from money market assets, 24 percent from equity assets, 12 percent from fixed-income assets and 1 percent from other products and services. Operating expenses for Q3 2009 were $198.9 million compared to $212.7 million for Q3 2008. Marketing and distribution expenses decreased because of the aforementioned fee-waiver-related reductions, partially offset by the impact of increases in average money market managed assets."

Finally, the release adds, "Compared to the prior quarter, revenue decreased by $13.3 million or 4 percent. The decrease in revenue primarily reflects a $19.6 million increase in voluntary fee waivers on certain money market funds in order to maintain positive or zero net yields. The fee waivers were offset by a related decrease in marketing and distribution expenses of $16.5 million such that the net impact on operating income was a decrease of $3.1 million compared to the prior quarter. In addition, revenue decreased due to lower average money market managed assets."

On Tuesday, the Committee of European Securities Regulators issued a Consultation Paper entitled, "A common definition of European money market funds." The release, which follows guidelines proposed in July by the European Fund and Asset Management Association (EFAMA) and the Institutional Money Market Funds Association, says, "The key purpose behind a harmonised definition of 'money market fund' is improved investor protection. A common definition will also help provide a more detailed understanding of the distinction between funds which operate in a very restricted fashion and those which follow a more 'enhanced' approach." European regulations currently do not define the term "money market fund".

The paper says, "CESR proposes a two-tiered approach for a definition of European money market funds: Short-term money market funds ... which operate a very short weighted average maturity and weighted average life, and longer-term money market funds, which operate with a longer duration and weighted average life. The definitions will apply to harmonised (UCITS) European money market funds. CESR recommends that the same approach is followed at national level for non-UCITS money market funds which are authorised by the Member States."

Its summary continues, "In both cases specific disclosure should be required to draw attention to the difference between the money market fund and investment in a bank deposit. It should be clear, for example, that an objective to preserve capital is not a capital guarantee. Longer-term money market funds should be required to provide sufficient information to explain the impact of the longer duration on the risk profile.... Existing European money market funds will have a transitional period of 12 months after the introduction of the guidelines to comply with criteria set out in the agreed definition. The proposed definitions of short-term and longer-term money market funds are set out in Appendix 1 to this paper."

Finally, "CESR invites responses to this consultation paper by 31 December 2009. All contributions should be submitted online via CESR's website under the heading 'Consultations' at All contributions received will be published following the close of the consultation, unless the respondent requests their submission to be confidential." We encourage readers to oppose the CESR's two-tiered definition, which we believe would cause confusion worldwide, and to urge European regulators to adopt a strict, U.S.-style definition of 'money market mutual fund'.

In other earnings conference call news, Northern Trust, which manages $67.04 billion in money market funds, President & CEO Frederick H. Waddell said, "We waived approximately $8 million in money market mutual fund fees [the previous quarter 'wasn't big enough ... to talk about'] due to the extremely low level of short-term interest rates and our desire to not have this impact our clients. We monitor fund yields continuously to insure that none of our clients experience a negative yield. If necessary, an immediate waiver of fees occurs in order to maintain a positive yield for the fund."

The Daily Herald's "Northern Trust posts $187.9 million in net income" article said, "The earnings, equal to 77 cents a share, compared with a loss of $148.3 million, or 66 cents a share, a year earlier, when Northern Trust spent $353.2 million to bail out clients who invested in money-market funds and auction-rate securities, the Chicago-based company said today in a statement."

On the company's quarterly earnings conference call yesterday, BlackRock Chairman and CEO Laurence D. Fink said money fund flows industry-wide "have been particularly hampered and harmed because of FDIC-insured products as a competitive product". Fink discussed the fifth-largest money fund manager's results, which are heavily influenced by cash, and also weighed in upon several other issues impacting the money fund marketplace.

The company's press release said, "Asset reallocation by both institutional and retail investors drove outflows in money market funds industry-wide. BlackRock's cash management AUM ended the quarter at $290.4 billion, down $26.3 billion or 8%. Average assets declined 6% relative to the second quarter. U.S. clients accounted for $30.1 billion of net outflows, which were partially offset by $3.7 billion of net inflows from international investors. Outflows were proportional to our client base, with $23.5 billion from institutional clients and $2.9 billion from retail investors globally. With yields at exceptionally low levels, we would expect continued pressure on money market flows."

Overall money market mutual fund assets decreased by $274.38 billion, or 7.9%, in the third quarter, but they have increased by 3.5% over the past 12 months, according to Crane Data's Money Fund Intelligence XLS. (Our data surveys show BlackRock's U.S. money fund assets declining by 6.5%, or $14.39 billion, over the past 12 months.)

Fink commented on the conference call, "We saw a huge hoarding of cash [last year].... Beginning in the second quarter, clients would begin to look for opportunities to earn more than zero.... In terms of asset flows in the 2nd quarter, clients are starting to move out of cash and into alternative investments. We never expected to receive dollar for dollar of outflows out of cash into longer-dated flows. We are pleased with the mix of our businesses.... But I don't want to suggest that we are not trying to stem and stabilize some of the outflows that we are seeing in our liquidity funds."

He continued, "Liquidity funds are seeing outflows industry-wide. Much of if has to do with banks offering FDIC insured rates at returns above zero.... If you can earn 96 basis points as a bank, and if you can attract deposits at 25 basis points or something close to that, it's more attractive than close to zero for a lot of people. So in many cases we are seeing the outflows in the retail spaces where clients are aggressively moving into these FDIC products. I think this is going to continue for a while. This is an industry issue, and I think we're going to have that drag for some time."

Finally, during the Q&A, Fink said investors previously had had "an under-appreciation of having liquidity-larger component of short-term". He added, "We are continuing to see clients repositioning themselves to have better liquidity.... I don't think you're going to see total outflows from liquidity, but I think you could continue to see some large flows into riskier assets.... On the retail side, clearly you're seeing people migrate out of MMFs, because of the fees, into FDIC insured products because of guarantee. The banks because of the yield curve are able to offer some yield. When the Fed stats raising rates, thats when you will see flows back to MMFs."

Yet another "partial" mutual fund merger deal has occurred with the announcement that Morgan Stanley will sell its Van Kampen retail mutual funds to Invesco. The Morgan Stanley Institutional Liquidity Funds, which account for approximately $28.79 billion of the manager's total $46.57 billion in domestic U.S. money fund assets (or 61.8%), and the majority of MS retail money fund assets, are not part of the deal and will remain with Morgan Stanley Investment Management. Just $800 million of Morgan Stanley's $17.79 billion in retail money funds appear to be part of the Invesco deal, and the Active Assets suite of brokerage sweep funds appear to be excluded from the deal. (Morgan Stanley also manages an additional $5.26 billion in "offshore" money funds that are not involved in the merger either.)

The MS press release says, "Invesco will purchase Morgan Stanley's retail asset management business, operating under both the Morgan Stanley and Van Kampen brands, in a stock and cash transaction valued at $1.5 billion. Morgan Stanley will receive a 9.4 percent minority interest in Invesco, allowing the Firm to participate in the future growth of the combined Invesco and Morgan Stanley/Van Kampen businesses.... Going forward, Morgan Stanley Investment Management (MSIM) will be comprised of several distinct institutional-focused businesses. These include: a long-only institutional business (including equity and fixed income), a direct hedge fund business, a fund of funds business, a liquidity business, and a merchant banking business, including the Firm's real estate, private equity and infrastructure units."

Morgan Stanley's money market mutual fund assets have been decimated over the past year, declining by $30.91 billion, or 39.9%, due to institutional outflows and the retail brokerages shift to "bankerage", or FDIC-insured sweep products. The company's combined retail and institutional money fund assets rank 18th among the 83 managers tracked by Crane Data. Invesco's AIM money fund unit ranks 13th with $73.97 billion (up $9.66 billion, or 15.0%, over the past 12 months through Sept. 30, according to our Money Fund Intelligence XLS).

In other news, J.P. Morgan Securities' weekly "Short-Term Fixed Income" writes this week on money fund flows in "Leaking liquidity." The piece says, "While it is clear money has been leaking out the money funds, it's hardly been gushing. In fact, MMF AuM are basically back to where they were at the start of September 2008. We write about money flows frequently (most recently on October 10) and won't recap the gory details here, but we will reiterate a few key themes: Shareholders invest in money funds either for precautionary or for structural reasons.... Generally speaking, most institutional class shareholders are liquidity investors.... [and] Retail class shareholders tend to be less risk averse and more willing to shift into other asset classes."

On bank deposits, JPM's Alex Roever and Cie-Jae Brown write, "[I]t's not at all clear that a large percentage of cash currently invested in money funds is destined to migrate into equity or bond markets, even with money fund yields hovering near zero. There is reason to believe that most of the institutional shares and a significant portion of the retail shares are sticky.... [T]he evidence suggests the leakage will be split between banks and the markets. That US banks have gained over $500bn in deposits since September 2008 should not be surprising given the extraordinary support provided to them by the government during that time. What is more surprising is that they have gained as much as that while trying to pass the increased cost of deposit insurance on to many depositors."

This month's Money Fund Intelligence interviews Janet Fiorenza, Head of Municipal Fixed Income, and Kristian Lind, Portfolio Manager & Vice President, of Neuberger Berman. Fiorenza, who has been managing tax-free money funds for over 25 years, brought her team over from Weiss, Peck & Greer in early 2005, and Neuberger recently selected SSgA as its provider of taxable money market funds. Below, we excerpt from our latest MFI, which discusses the advisor's now exclusive focus on tax-exempt money market funds and recent events in the municipal money markets.

We first ask, "What's the biggest challenge managing a municipal fund today? Fiorenza responds, "I feel bank diversification is one of our biggest challenges at the moment. Given the creditworthiness of the domestic and foreign banks, you only want to own the highest rated, most creditworthy banks. With so many bank mergers taking place over the past several years along with the fact that several domestic banks no longer hold the three highest short term ratings, there are fewer high quality banks to choose from, thus making diversification that much more difficult.... However, I would say managing the seasonal flows has historically been our biggest challenge."

We also ask, "What's the status of the monoline insurers? Are there still worries out there?" She tells MFI, "We're not relying on any of the monoline insurers at the moment. We feel that FSA is a high quality monoline, and will ultimately succeed in being one of the only insurers to remain in place and have penetration in our marketplace. I'm confident we will never see anyone rely on the monoline insurers like they did so often in the past. As a team, we used a belt and suspenders approach and always looked at the underlying issuer, so our clients were not blindsided. As the credit crunch started to build, through careful study, we decided to exit the monoline insurers months ahead of many other fund managers. This gave our team enough time to replace those securities with paper backed by letters of credit."

Then MFI asks, "Are there a lot of unrated securities in the municipal market? Fiorenza says, "There are enough unrated securities in the marketplace to add value to our portfolios. We find that many of the unrated securities are very high quality. In order to purchase these, you need to have the proper research capabilities. You must remember that the SEC has never wanted money funds to rely on the rating agencies. As long as you have a credit research team in place that can properly review these securities, they can add value to your portfolio."

Finally, we ask, "What about AMT paper and the overall state of municipalities? Lind says, "There's definitely still issuance, and if it's priced appropriately there are definitely buyers for it.... Every state and local government is going through periods of pressure right now. Tax receipts are down, people aren't spending as much, and property values are falling. So I think all issuers are going to be under pressure going forward. It's a matter of assessing the situation and tightening up their budgets and seeing where they can make appropriate cuts."

E-mail to request a copy of the full October Money Fund Intelligence interview and article.

The Investment Company Institute's latest weekly "Money Market Mutual Fund Assets" series says, "Total money market mutual fund assets decreased by $42.24 billion to $3.404 trillion for the week ended Wednesday, October 14.... Taxable government funds decreased by $31.29 billion, taxable non-government funds decreased by $7.79 billion, and tax-exempt funds decreased by $3.17 billion." Year-to-date, we show ICI's money fund asset totals declining by $426 billion, or 11.1%.

ICI's release adds, "Assets of retail money market funds decreased by $6.71 billion to $1.115 trillion. Taxable government money market fund assets in the retail category decreased by $1.39 billion to $174.99 billion, taxable non-government money market fund assets decreased by $3.90 billion to $697.75 billion, and tax-exempt fund assets decreased by $1.42 billion to $242.69 billion. Assets of institutional money market funds decreased by $35.53 billion to $2.288 trillion. Among institutional funds, taxable government money market fund assets decreased by $29.90 billion to $910.02 billion, taxable non-government money market fund assets decreased by $3.88 billion to $1.205 trillion, and tax-exempt fund assets decreased by $1.75 billion to $173.54 billion."

Money fund assets are on track to post a larger percentage decline than in 2003, their second largest annual decline in history. Money fund flows experienced their worst year ever in 1983, when they declined by 18.4%. This was followed by 2003's 9.7% drop. This year appears almost certain to be the fifth year in money funds' 40-year history to show a decline in assets. (The others were 2002, down 0.6%, and 2004, down 6.8%.) And until rates rise or markets correct, there appears to be no relief in site for cash.

In other news, Evergreen Money Market Fund posted a note to shareholders yesterday saying, "A special distribution was declared on October 15, 2009 for Evergreen Money Market Fund. This distribution, which is being made from short-term capital gains, is in addition to the Fund's normal income dividend. The normal income dividend and special distribution will be combined into one payout that clients will receive on November 2, 2009, the Fund's normal monthly payment date.... This payment is the result of a capital infusion provided by Wachovia Corporation in 2008 to support certain securities within the Fund. The securities have since matured at par value, and as a result, the Fund is required to make this special distribution to satisfy federal income tax regulations."

Wells Fargo Funds Management Group spokesperson Laura Fay tells Crane Data, "The support agreement was put in place in an effort to protect the interests of our shareholders during a challenging market environment, and we are pleased that the precautionary measure proved to be unnecessary. As they have in the past, our money market funds continue to maintain a conservative approach to investing that prioritizes the preservation of capital and liquidity." She added that Morgan Stanley securities were the ones involved in this particular CSA (capital support agreement).

The Luxembourg-based JPMorgan USD Liquidity Fund recently became the first money market mutual fund domiciled outside the U.S. to surpass the $100 billion mark. Crane Data's Money Fund Intelligence International shows the fund at $102.42 billion as of October 13, and we show JPMorgan as the largest manager of money market mutual funds outside the U.S. with over $202.81 billion. When U.S. money fund assets are combined with European totals, JPMorgan ranks as the largest money fund manager in the world with approximately $564.51 billion, ahead of Fidelity's U.S.-heavy $507.39 billion (totals will be available shortly in our quarterly Money Fund Intelligence Distribution Survey).

The company recently published a press release in Europe entitled, "JPMAM increases dominance in liquidity funds arena", which says, "One year after the collapse of Lehman Brothers and 2 years after the start of the credit crisis, J.P. Morgan Asset Management, the world's largest provider of institutional liquidity funds, has continued to see huge flows into its AAA-rated stable net asset value (NAV) funds despite an overall fall in assets across the money market funds industry this year. As a result, J.P. Morgan Asset Management remains the largest international provider of 'AAA' rated money market funds with a 31% market share of IMMFA-style funds."

It continues, "J.P. Morgan Asset Management's international Liquidity Funds business has grown by over 100% since September 2007, in terms of assets under management and now stands at $198 billion. In addition, assets under management in the JPM USD Liquidity Fund specifically, have also grown by over 100% to $100 billion over the same period, making it the largest mutual fund in Europe today."

The $100-plus billion JPM USD Liquidity fund is followed in size by the Cayman Islands-domiciled Western Asset USD Liq Reserves at $29.36 billion and the Dublin-domiciled Goldman Sachs USD Liq Resv Inst at $26.92 billion. In the U.S., four funds total over $100 billion -- JPMorgan Prime MM ($167.21 bil), Fidelity Cash Reserves ($137.12 bil), Vanguard Prime MMF ($112.78 bil) and JPMorgan US Govt MM ($109.51 bil). Crane Data began tracking "offshore" money funds early in 2009, so we don't have annual growth numbers. But we show JPMorgan's domestic U.S. money fund assets increasing by 27.5%, or $81.98 billion, to $379.61 billion in the 12 months through Sept. 30, 2009.

Kathleen Hughes, Head of Global Liquidity EMEA, says in the release, "When investors are looking for safety, liquidity and diversification, they clearly want a manager they can trust as well as one with a proven track record. It is testament to J.P. Morgan Asset Management's size, financial strength and global capabilities that we are seeing our inflows increase on such a scale. The JPM USD Liquidity Fund is a particular beneficiary of this but because of the strength of our global platform, our broader fund range has benefited greatly too."

Finally, Bob Deutsch, Head of Global Liquidity, adds, "As one of the most respected names in the liquidity funds industry with over $500 billion worth of assets under management globally, we also believe in sharing our investment insights, resources and intellectual capital with our clients. Through value-added programmes and services, such as investment forums, exclusive white papers, industry surveys and one-on-one consultations, J.P. Morgan Global Liquidity brings unique perspectives to investment decisions and we're proud of our depth and scale of ability in this area."

While we attempt to monitor the SEC's EDGAR database of mutual fund filings directly, we find it extremely cumbersome and time-consuming to do so. Luckily, New York mutual fund research firm Strategic Insight offers a cleaner front-end to, and summary of, EDGAR, called Simfund Filing. This product's most recent summary of filings shows new "portal" (E) classes have been filed for a number of HSBC money funds, new I and P classes have been filed for Transamerica Money Fund, and a new Williams Capital US Treasury Money Fund is pending. Several investment policy and manager changes also involve money funds.

SimFundFiling says of HSBC's recent filings, "HSBC Global Asset Management USA money market funds register Class E shares, which will be offered primarily for investment through portal providers, intermediaries (anyone facilitating the purchase of the fund by its clients), and institutional direct clients, if they meet the minimum investment ($10 million)."

New E class filings are being launched for the following HSBC funds: HSBC Inv Prime Money Market, HSBC Inv US Govt Money Mkt, HSBC Inv US Treas Money Mkt, HSBC Inv CA Tax-Free MMF, HSBC Inv NY Tax-Free MMF, and HSBC Inv Tax-Free Money Mkt, which already have A, C, D, I and Y shares. The E class will charge 0.25% after reimbursement, compared to 0.20% for the I class (direct institutional), 0.30% for the Y, 0.55% for the D, 0.70% for the A, and 1.30% for the B and C shares (though the latter are no doubt being waived in the zero yield environment).

In changes to investment strategy news, Strategic Insight says of a Russell Money Market filing, "In mid-November, the fund will begin transitioning to a new investment strategy ... investing in a portfolio of high quality money market securities issued or guaranteed by the U.S. government, its agencies or instrumentalities maturing within 397 days or less (with variable rate securities may have longer maturities). The transition is expected to be complete by the end of the year." They add, "Effective October 2009, each of the linked funds which currently invests its cash reserves or cash collateral received in securities lending transactions in the Russell Money Market fund will instead invest in either the Russell U.S. Cash Management fund or the Russell U.S. Cash Collateral fund, unregistered funds advised by RIMCo and administered by RFSC."

The new filings for the Transamerica and Williams Capital funds have yet to show a fee table, but the Transamerica offerings appear to be imminent. (It has a prospectus filed.) Finally, under "Manager Changes," SimFundFiling cites the new managers of Janus Government MMF and Janus MMF as "J. Eric Thorderson and David Spilsted." Eric Thorderson had previously been listed as the sole manager.

In Crane Data's latest Money Fund Intelligence, our "Fund Additions & Changes" section showed that Credit Suisse Inst MMF Prime (CUTXX), Dreyfus Inst MMF (DMSXX), SEI T-E Trust MA T-F MMF B, and Virtus Insight MMF E (HECXX) were all liquidated in September, while Investor classes were added to JPMorgan Prime MM and JPMorgan Govt MM.

Sunday's New York Times included a story, "The Buck Broke: So How to Retool Money Funds?" The piece, in the paper's quarterly "Mutual Funds Report, rehashes The Reserve Primary Fund's "breaking of the buck," proposed SEC reforms, and possible future changes to the structure and regulation of money funds.

It says, "After a fever of panic raced through the nation's money market mutual funds in September 2008, the industry and its regulators promised quick action on new rules that would restore health and confidence to that $3.6 trillion market. Investors are still waiting for new rules -- and the industry is warning that some proposals for a regulatory cure may do more damage than the original disease. The loudest debates have been over a proposal that would force money funds to allow their share prices to fluctuate."

The article continues, "A floating share price 'would ultimately destroy the industry' by undermining that confidence, predicted Michael R. Rosella, who specializes in investment management law at Paul Hastings in New York. He tells the Times, "Folks use their money funds as checking accounts -- and without certainty about their principal value, they can't do that."

The piece adds, "Almost none of more than 150 letters filed with the Securities and Exchange Commission supported the idea of a floating share price, although the White House nevertheless wants regulators to take a look at it. Still, that lopsided debate has obscured other regulatory proposals that could have sweeping and unpredictable consequences for the industry and its investors."

The Times cites unnamed critics, saying, "The idea of a private-sector source of insurance that fund sponsors could tap in a crisis was specifically raised by the White House, which has directed the President's Working Group on Financial Markets to study the concept. Indeed, some large fund companies are quietly exploring the notion on their own, although Mr. Stevens declined to comment on that effort. The S.E.C. proposals, however, are silent on that option -- which strikes some critics as strange, because liquidity insurance is the one thing that might reliably have prevented the Reserve run."

Finally, it says of some options, "Given how controversial these proposals are, it is perhaps a blessing that there's no sign they will be acted on quickly. The industry is still waiting for the report of the president's working group, which was supposed to report on Sept. 15 but has postponed until Dec. 1 to allow it time to review the S.E.C. proposals more fully. There are some signs that the market is weathering this continued uncertainty. While the assets in money funds have dropped since last March, trends suggest that investors are reacting more to rock-bottom interest rates than to safety concerns."

Money market mutual fund assets fell by $114.87 billion, or 3.4%, in September, the 8th consecutive monthly drop and the largest decline since September 2008's $160.07 billion decrease, according to Crane Data's monthly Money Fund Intelligence. September's outflows follow declines of $49.60 billion in August, $56.03 billion in July, and $83.60 billion in June.

Money fund assets have declined by $439.16 billion, or 11.9%, since the end of January of this year. This precipitous drop follows a huge $486.44 billion, or 15.2%, increase that money funds experienced from October 2008 through January 2009 -- the four months immediately following Reserve Primary Fund's "breaking of the buck."

At $3.25 trillion, money fund assets remain $47.28 billion higher than they were on Sept. 30, 2008, and $580.12 billion, or 21.7%, higher than they were on Sept. 30, 2007. Both Retail and Institutional funds showed declines in September, but Institutional funds remain up sharply over 12 months (+15.9%) while Retail funds show significant declined (-13.2%). (These statistics are from Crane Data's monthly asset series, which is slightly lower than the ICI's more comprehensive collection. See today's "Link of the Day" for ICI's latest weekly totals.)

Money fund yields appear to be bottoming, but some averages continue to set new record lows. Our broadest benchmark for Taxable money funds, the Crane Money Fund Average, remained unchanged at 0.06% (annualized 7-day yield as of Sept. 30) at month-end. The Crane 100, which we believe better reflects what investors actually earn given its bias towards the largest funds, inched lower to 0.11%. One year ago, the Crane Money Fund Average yielded 1.69% and two years ago it yielded 4.61%. The Crane 100 was 2.17% as of Sept. 30, 2008, and 5.01% as of Sept. 30, 2007.

Crane Data collected statistics on 1,325 money market funds in September, down from 1,343 a year ago and up from 1,189 two years ago. The Average Maturity for our Crane Money Fund Average declined by one day in September to 46 days, but the AM remained at 51 days for the Crane 100 Index. (Note: Subscribers to Money Fund Intelligence may request a copy of our historical asset totals and Crane Indexes by writing <i:mailto: Non-subscribers may also write to request the most recent issue of `Crane Index or MFI.)

In other news, the commercial paper market has been showning a nice little rebound, according to recent Federal Reserve statistics. Total outstandings (seasonally adjusted) have increased by over $100 billion in the past month and have almost regained the $1.3 trillion level. (See The Wall Street Journal's negative spin, "Commercial Paper Isn't As Healthy As It Seems", and Bloomberg's earlier "Commercial Paper Market Expands Most in Almost a Year".)

The October 2009 issue of our flagship Money Fund Intelligence features the articles: "Money Fund Survivor: Outlasting Zero Yields," which discusses survivability and the distribution of yields, "Neuberger Berman Talks Tax-Exempt Money Markets," which profiles industry veterans Janet Fiorenza and Kristian Lind, and "Taking a Closer Look at Money Fund Market Share," which discusses the winners and losers of assets over the past year. Every issue of MFI features news, indexes, and performance information on over 1,300 money market mutual funds. (Annual subscriptions are $500.)

Our "Survivor" piece says, "With almost half (45.6%) of all taxable money market mutual funds yielding either zero or just one basis point (0.01%), the question of profitability, and even survivability, is becoming a very real one for many funds." The article contains a table showing the distribution of 30-day yields (from 0.00% to 0.50%) among taxable money funds, and includes a discussion of the accuracy of expense ratios and gross yield estimates in the ultra-low yield environment.

MFI's monthly money fund "profile" highlights Neuberger Berman's Tax Exempt Money Fund Portfolio Manager Team. We interview Janet Fiorenza, Head of Municipal Fixed Income, and Kristian Lind, Portfolio Manager & Vice President, and discuss the advisor's focus on tax exempt money market funds and recent events in the municipal money markets. Look for excerpts from this story in coming days.

The "Taking a Closer Look at Market Share" segment includes a ranking of the largest 50 managers of money market mutual funds by assets (excerpted from our monthly MFI XLS product). This article says, "The four largest money fund complexes -- Fidelity, JPMorgan, Federated, and Dreyfus -- all have been big winners over the past 12 months, a period when money fund assets gained a mere 1.9%. No. 1-ranked Fidelity, with $500.2 billion, gained $69.2 billion (16.0%); No. 2-ranked JPMorgan, with $379.6 billion, gained $82.0 billion (27.5%); No. 3-ranked Federated, with $275.5 billion, gained $28.6 billion (11.6%); and, No. 4-ranked Dreyfus, with $227.7 billion, gained $24.4 billion (12.0%)."

Finally, our Crane Money Fund Indexes showed very little change for the month. The Crane Money Fund Average was unchanged (7-day annualized yield) at 0.06%, while the Crane 100 MF Index inched one basis point lower to 0.11% in September. The Crane Institutional MF Index remained at 0.10% and the Crane Retail MF Index remained at 0.03%. Our Crane Tax Exempt MF Index rose 1 bps to 0.10%. For a full listing, see MFI or Crane Index, or see our Crane Indexes on Bloomberg. (Type 'ALLX CRNI' for a listing.)

Fitch Ratings has released an updated "Global Money Market Fund Rating Criteria," which replaces its previous 'AAA/V1+' rating with a new 'AAAmmf' rating and which revises liquidity, maturity, diversification, and operational support guidelines for its highest-rated money market mutual funds. Fitch says, "The rating criteria outlined in this report replace all existing money market fund rating criteria and reflect in full the consultation process undertaken following the publication of Fitch Ratings Research on "Exposure Draft: Global Money Market Fund Rating Criteria," dated Jan. 26, 2009." (See our Jan. 28, 2009, article, "Rethinking Money Fund Ratings: Fitch Revamps Criteria for AAA"".)

The publication says, "Fitch's criteria release coincides with recent proposals to enhance the regulatory framework for money market funds put forth by the U.S. Securities and Exchange Commission (SEC), and certain industry trade associations. Fitch supports the objectives underpinning these proposals, which mirror Fitch's criteria in several important areas and should serve to further strengthen the industry. While the proposals provide a common baseline for money market funds in terms of credit quality and liquidity risk, Fitch focuses on several additional aspects when assigning its highest money market fund ratings."

The ratings agency cites the Criteria Highlights as: "The establishment of a new money market fund rating scale and ratings definitions, with an 'AAAmmf' rating that replaces the 'AAA/V1+' ratings. This is intended to provide improved transparency and better differentiate money market fund ratings from ratings on other rated debt instruments and higher-risk bond funds; Updated rating criteria with respect to shareholder redemption risk and portfolio level liquidity....; Revised liquidity guidelines afford credit to other highly liquid assets including U.S. Treasury securities and securities issued by other 'AAA' sovereigns and agency securities with maturities of 95 days or less; and, Adoption of a weighted average days to final maturity (WAMF) metric, which primarily measures spread risk and overall portfolio liquidity."

Other Highlights include: "Revised diversification criteria, which incorporate the issuer's rating and the exposure's time to maturity, as well as indirect exposures through other sponsored programs, such as ABCP conduits; A matrix-based approach to evaluating money market fund portfolios in the context of asset maturity and credit quality termed the Portfolio Credit Factor (PCF). The PCF is intended to more effectively differentiate funds that focus on high credit quality and shorter maturities from funds that exhibit higher levels of credit and/or market risk by investing in longer asset maturities and/or lower credit quality."

Finally, the report says, "In addition to an assessment of the fund sponsor's operational support, infrastructure capabilities, and investment oversight, consideration is given to the sponsor's ability and willingness to financially support its money market funds, if needed, in times of extreme stress. The concept of support is implicit rather than explicit, as Fitch recognizes there is no contractual obligation to support a fund. That said, historically, support has been forthcoming from strategically motivated sponsors that had sufficient financial resources."

Standard & Poor's Rating Services issued a press release Friday entitled, "S&P: Two Allegiant Advantage Institutional Money Market Funds Rated 'AAAm'. The ratings agency says, "[I]t assigned its 'AAAm' principal stability fund rating to the Allegiant Advantage Institutional Government Money Market Fund and the Allegiant Advantage Institutional Treasury Money Market Fund. The ratings -- the highest assigned to money-market funds -- are based on our analysis of the funds' credit quality, market price exposure, and management."

The release continues, "The Allegiant Advantage Institutional Government Money Market Fund and the Allegiant Advantage Institutional Treasury Money Market Fund, both launched on Oct. 1, 2009, will target a stable $1.00 net asset value and will be invested in a manner consistent with 'AAAm' rated funds.... The funds seek to provide maximum current income consistent with liquidity and stability of capital. The Allegiant Advantage Institutional Government Money Market Fund seeks to achieve its investment objective by investing 100% of its net assets in a portfolio of high-quality, short-term obligations issued by or guaranteed as to payment of principal and interest by the U.S. government or its agencies. The Allegiant Advantage Institutional Treasury Money Market Fund seeks to achieve its investment objective by investing exclusively in a portfolio of short-term direct obligations of the U. S. Treasury. The fund may engage a maximum of 20% of its net assets in repurchase agreement transactions collateralized by short-term obligations of the U.S. Treasury."

S&P adds, "The funds' investment advisor, PNC Capital Advisors LLC, serves as investment advisor to a variety of institutional investors, high-net-worth individual accounts, and other 2a-7-registered funds. We currently maintain a 'AAAm' rating on the Institutional Share Classes and the Investor A Share Classes of Allegiant Government Money Market Fund, Allegiant Treasury Money Market Funds, Allegiant Money Market Fund, and the Allegiant Advantage Institutional Money Market Fund -- all advised by PNC Capital Advisors LLC. PFPC Trust Co. is the custodian for the funds, and Professional Funds Distributor LLC is the distributor and administrator."

The $7.4 billion (ranked 33rd) Allegiant money market funds were previously affiliated with National City Bank, which was taken over by PNC last year. PNC affiliates also manage the $1.1 billion PNC Funds, which include PNC Govt MMF Inst, PNC Prime MMF A, and PNC Prime MMF Inst.

Invesco announced yesterday that its "PowerShares VRDO Tax-Free Weekly Portfolio (PVI) Surpasses $1 Billion in AUM." It says of the muni money fund alternative, "Launched in November of 2007, the PowerShares VRDO Tax-Free Weekly Portfolio was the first ETF to provide investors access to the variable rate demand obligation (VRDO) market. VRDOs are floating-rate municipal bonds that offer investors tax-exempt income in a short-term time frame." Today, we briefly explore this and some other entrants in the small but growing segment of "near-cash" ETFs.

Bruce Bond, president and CEO, says, "Invesco PowerShares has strived to provide investors access to markets that have traditionally been difficult to invest in, and we are very pleased with the success of PVI. The PowerShares VRDO Tax-Free Weekly Portfolio epitomizes our commitment to providing innovative investment products that feature the tax efficiency, transparency, and liquidity benefits inherent to the ETF structure."

The company says, "The PowerShares VRDO Tax-Free Weekly Portfolio is based on the Thomson Municipal Market Data VRDO Index. The Fund will normally invest at least 90% of its total assets in securities that comprise the Index. The Index is designed to track the performance of a pool of tax-exempt VRDOs issued by municipalities in the United States on which the yields generally reset on a weekly basis. For additional information on PVI please visit"

PowerShares PVI is one the handful of "enhanced cash" ETFs riding a second wave of interest. Alas, the first wave, led by Bear Stearns YYY ETF, suffered from extremely poor timing. (To see Crane Data's previous posts on ETFs, search for "ETF" in our search box.) In March 2007, we wrote "More Ultra-Short ETFs on the Way: SPDR Lehmans from SSGA," "Bear Stearns Files to Launch First 'Cash' ETF, Current Yield Fund," and "Body Count Rises in Enhanced Cash; Bear YYY ETF Exits Stage Left."

We said at the time, "SSgA has filed to launch two new short-term bond ETFs, SPDR Lehman 1-3 Mo T-Bill ETF and SPDR Lehman Short-Term Treasury ETF. Barclays 1-3 Lehman Treasury ETF (symbol: SHY) has been the closest thing to a 'money fund' ETF to date." Look for more on the topic in the October issue of our Money Fund Intelligence.

Early yesterday, a press release stated, "Bank of America has announced that it has reached a definitive agreement to sell Columbia Management's long-term asset management business to Ameriprise Financial. This includes the management of its equity and fixed-income mutual funds and separate accounts." Columbia's money fund business, the nation's 10th-largest, was not included in the deal and continues to be owned by Bank of America, though several reports speculated that it may.

The Boston Globe reports, Bank of America Corp. has found a buyer for its Boston-based mutual fund unit, Columbia Management. The banking giant, which has been peddling Columbia for at least five months, announced a deal yesterday to sell much of the business, including the Columbia name, to Ameriprise Financial Inc. of Minneapolis for as much as $1.2 billion in cash. Ameriprise, which was spun off from American Express four years ago, agreed to buy Columbia's flagship stock and bond fund business, which boasts $165 billion in assets. Bank of America is still considering a sale or other options for the rest of Columbia's business -- $170 billion in money market funds."

Bloomberg's story says, "Today's deal doesn't include Columbia's money-market funds, which managed $120.2 billion as of July 31. Columbia was the ninth-largest U.S. manager of money-market funds as of July 31, according to Crane Data LLC in Westborough, Massachusetts." Bloomberg adds, "`Bank of America continues to consider alternatives for the cash investments," the company said in a statement. (Columbia's asset numbers in paragraph two above likely include offshore and enhanced cash statistics, while the number Bloomberg cites counts only domestic U.S. money funds. The company's rank slipped from ninth to tenth from July to August.)

Columbia's money fund assets have been declining this year amidst the ultra-low rate environment and amidst the uncertainty surrounding its divestiture. Assets have fallen by 24.6% in the 12 months through August 31, or $36.15 billion, according to Money Fund Intelligence XLS.

The Columbia press release added, "This transaction combines two leading asset management firms and is projected to create one entity with nearly $400 billion in global asset management. It is anticipated that the combined U.S. asset management business will operate under the well-regarded Columbia Management brand and will continue to be primarily based in Boston. The combined U.S. asset management business will be led by Ted Truscott, currently president, U.S. asset management, annuities and chief investment officer, Ameriprise Financial. Michael A. Jones, currently president of Columbia Management, will serve as president, U.S. asset management. Colin Moore, chief investment officer at Columbia Management, will serve that role for the combined organization."

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