Money Market Educational Primers

We offer a series of educational primers about money market topics. Written in conjunction with our portfolio management and credit analysis teams, these primers offer a unique insight into money market topics, especially regarding money market securities, key features that relate to our investment strategies, and important credit considerations.

  • The debt ceiling—frequently asked questions Any discussion should be prefaced by our belief that the likelihood of one or multiple technical defaults due to a protracted debt-ceiling debate is remote; that in the unlikely event there should be a technical default, it will be short-lived; and that upon resolution, investors and funds are likely to be unaffected. We further believe that, given evidence of preplanning, the Federal Reserve (Fed) would be prepared to step into the markets in order to calm them and ensure smooth and orderly functioning of the government markets.
  • Three steps to optimize short-term cash Cash portfolios have been viewed as an asset class in their own right for several decades—certainly since 3-month Treasury bill rates reached the more-than-16% stratosphere in the early 1980s. With interest rates now at the other end of the spectrum—near 0% since the 2008 financial crisis—optimizing a cash portfolio remains an important responsibility of corporate treasurers and investment committees.
  • Primer on Cash Investment Policy Statements An investment policy statement (IPS) is a document that serves as a policy guide to meet the goals and objectives of an investment portfolio over the long run. Therefore, it is an essential component of good corporate governance. Not only does having an IPS satisfy an important fiduciary duty and meet documentation requirements under the Sarbanes-Oxley Act, but it provides discipline to the investment process, helps avoid surprises from asset managers, and is an effective risk management tool that endures the ups and downs of market cycles.
  • Primer on Repurchase Agreements Repurchase agreements (repos) are a type of short-term investment widely used by money market fund portfolio managers and shareholders. One reason for this is that money market funds are required to maintain at least 10% of their assets in daily liquid assets, which can include overnight repos. Nearly 80% of the $1.6 trillion tri-party repo market consists of U.S. Treasury or agency debt collateral, according to the Federal Reserve Bank of New York.
  • Primer on Asset-Backed Commercial Paper Asset-backed commercial paper (ABCP) is a form of short-term borrowing that is limited to a maturity of no more than 397 days. However, most ABCP is issued for a term of less than three months. ABCP allows financial institutions to offer an additional funding option for their customers by pooling their assets to back the paper. These assets may consist of trade receivables, consumer receivables, auto loans and leases, student loans, corporate loans, or other types of financial assets.
  • Primer on Variable-Rate Demand Notes Variable-rate demand notes (VRDNs) have historically been a core holding in municipal money market funds because of their effectiveness as a tool for managing a fund's liquidity and average maturity. The safety and soundness of the VRDN structure has been demonstrated through various market conditions and economic cycles, most notably during the 2008 financial crisis. In recent years, VRDNs have become a popular investment alternative for prime money market funds due to their ability to provide liquidity and enhance principal preservation.
  • Top
Portfolio Manager Commentary. Read our most current Overview, Strategy, and Outlook, an informative monthly commentary from our money market team. View now.