UBS Asset Management announces changes to its money market fund platform
UBS Asset Management (Americas) Inc. ("UBS AM") and its affiliates/predecessors have managed money market funds for more than 35 years and offer client-focused solutions throughout the world. In an effort to best address its clients' needs in an era of evolving regulatory reform and industry changes, UBS AM today announced changes to its money market fund platform, including the launch of new products.
Highlights of the changes to UBS AM's money market fund platform include:
- The UBS Select Prime Funds, with a largely institutional ('non-natural persons') shareholder base, will adopt floating net asset value (FNAV) pricing by an October 2016 regulatory compliance deadline.
- The UBS Prime Funds, a recently launched retail money market family of funds, will accept investments from retail investors ('natural persons') and seek to maintain a constant net asset value (CNAV) per share of $1.00.
- The UBS Select Tax-Free Funds intend to qualify as 'retail money market funds' and will also undergo a name change later in 2016.
- The UBS Select Treasury Funds affirmed their intention, announced in June 2015, to qualify as 'government money market funds' so that they can continue to seek to maintain a CNAV per share of $1.00 once the regulatory changes become fully effective in October 2016.
- The UBS Select Government Funds*, a new suite of government money market funds will be launched in 2016 to complement the existing UBS Select Treasury Funds. These new funds will accept investments from all investors ('natural' and 'non-natural persons') and seek to maintain a CNAV per share of $1.00.
- The UBS Investor Series will reduce the initial minimum investment requirement from $100,000 to $10,000.
- UBS AM's sweep money market funds, available via UBS Financial Services' automatic cash 'sweep platform,' will undergo changes later in 2016. Some funds may no longer be offered on cash sweep platforms, and shareholders may be transitioned to alternate money market fund products.
"The changes we announced today and the expansion of our money market fund platform are designed to ensure that all our clients continue to have access to UBS Asset Management's deep capabilities in liquidity management," said Joe Abed, Head of Global Liquidity for UBS Asset Management.
"Evolving our global liquidity product offering in the US is a critical component of UBS Asset Management's growth strategy in the Americas," said Blake Moore, Head of the Americas for UBS Asset Management. "With over $40 billion in US money market assets and almost $99 billion in liquidity products globally as of September 30, 2015, we continue to offer our clients a broad range of investment products to meet their liquidity needs."
As of September 30, 2015, UBS AM had approximately $154 billion in asset under management. UBS AM is a member of the UBS Asset Management division of UBS Group AG, which had approximately $652 billion in assets under management, of which $212 billion were in Fixed Income mandates, including nearly $99 billion in Liquidity Management assets world wide as of September 30, 2015.
UBS AM intends to implement these changes over the course of the next several months and conclude them within the SEC's compliance period, which extends until October 14, 2016. Today's announcement includes details about UBS AM's money market products for both retail and institutional investors, including CNAV and FNAV pricing, as well as whether the funds will be potentially subject to liquidity fees and/or gates on redemptions (under certain circumstances) as required by the SEC's rule amendments ("fees and/or gates").
UBS Select Prime Funds
The UBS Select Prime Funds below have a primarily institutional (e.g., non-natural persons) shareholder base and will adopt FNAV pricing and will be subject to the possibility of fees and/or gates. These changes become effective on or before October 14, 2016.
- UBS Select Prime Preferred Fund
- UBS Select Prime Institutional Fund
- UBS Select Prime Investor Fund
UBS Prime Funds
UBS AM recently launched UBS Prime Funds, a new family of funds that are offered to natural persons. These funds intend to qualify as 'retail money market funds' under the SEC's amended rules and seek to maintain a CNAV per share of $1.00. The funds have expense structures and minimum investment requirements similar to the UBS Select Prime Funds and will be subject to the possibility of fees and/or gates effective on or before October 14, 2016.
- UBS Prime Preferred Fund
- UBS Prime Reserves Fund
- UBS Prime Investor Fund
UBS Select Tax-Free Funds
The UBS Select Tax-Free Funds intend to qualify as 'retail money market funds' and seek to maintain a CNAV per share of $1.00. The funds are anticipated to begin limiting subscriptions to natural persons by August 31, 2016. In connection with the designation as 'retail money market funds', the funds will undergo name changes, dropping 'Select' from their names. These funds will be subject to the possibility of fees and/or gates effective on or before October 14, 2016.
- UBS Select Tax-Free Preferred Fund
- UBS Select Tax Free Institutional Fund
- UBS Select Tax-Free Investor Fund
New Name (effective on or about 8/31/16)
- UBS Tax-Free Preferred Fund
- UBS Tax Free Reserves Fund
- UBS Tax-Free Investor Fund
UBS Select Treasury Funds
UBS AM previously announced changes to its UBS Select Treasury Funds in June 2015, affirming that the funds intend to qualify as 'government money market funds' under the SEC's amended rules. The funds will continue to invest in US Treasury securities and related repurchase agreements.
Under the SEC's amended rules, these Treasury funds may maintain a CNAV per share of $1.00 and will not be subject to fees and/or gates unless their board determines to provide advance notice to shareholders of a change in this policy. The funds will continue to be available as investment options to both natural persons and non-natural persons.
- UBS Select Treasury Preferred Fund
- UBS Select Treasury Institutional Fund
- UBS Select Treasury Investor Fund
UBS Select Government Funds – New Family of Funds in Development*
UBS AM is planning to launch new UBS Select Government Funds in 2016 to expand its liquidity management platform and to complement the existing UBS Select Treasury Funds. The funds will be available to both natural persons and non-natural persons. Under the SEC's amended rules, these government money funds may maintain a CNAV per share of $1.00 and will not be subject to fees and/or gates unless their board determines to provide advance notice to shareholders of a change in this policy. The funds will seek to invest 99.5% or more of their net assets in cash, government securities (e.g., US Treasury and agency securities) and/or repurchase agreements collateralized solely by cash or government securities.
- UBS Select Government Preferred Fund
- UBS Select Government Institutional Fund
- UBS Select Government Investor Fund
UBS Investor Series – Reduction of Minimum Initial Investment
To make its funds more accessible to investors, UBS AM is reducing the initial minimum investment requirement from $100,000 to $10,000. These changes are effective February 1, 2016.
- UBS Select Prime Investor Fund
- UBS Select Tax-Free Investor Fund (to be renamed UBS Tax-Free Investor Fund effective on or about 08/31/2016)
- UBS Select Treasury Investor Fund
UBS Cash Sweep Platform Changes
To comply with the SEC's amended rules as well as to streamline investment options for fund shareholders, UBS AM expects to makes changes to its current menu of money market funds available via UBS Financial Services' automatic "cash sweep platform." Some funds may no longer be offered on cash sweep platforms, and investors may be transitioned to alternate money market sweep products. Shareholders will receive separate communications with specific fund changes later in 2016.
UBS AM is working to ensure that its products, systems and processes will comply with the new SEC regulations before the relevant compliance deadlines and meet the funds' goals of safety, liquidity and income.
About UBS Asset Management
UBS Asset Management is a large-scale asset manager with well diversified businesses across regions and client segments. It serves third-party institutional and wholesale clients, as well as clients of UBS’s wealth management businesses with a broad range of investment capabilities and styles across all major traditional and alternative asset classes. Complementing the investment offering, the fund services unit provides fund administration services for UBS and third-party funds.
UBS is committed to providing wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland, with superior financial advice and solutions while generating attractive and sustainable returns for shareholders. Its strategy centers on its Wealth Management and Wealth Management Americas businesses and its leading universal bank in Switzerland, complemented by its Asset Management business and its Investment Bank. These businesses share three key characteristics: they benefit from a strong competitive position in their targeted markets, are capital-efficient, and offer a superior structural growth and profitability outlook. UBS's strategy builds on the strengths of all of its businesses and focuses its efforts on areas in which it excels, while seeking to capitalize on the compelling growth prospects in the businesses and regions in which it operates. Capital strength is the foundation of its success.
UBS is present in all major financial centers worldwide. It has offices in more than 50 countries, with about 35% of its employees working in the Americas, 36% in Switzerland, 17% in the rest of Europe, the Middle East and Africa and 12% in Asia Pacific. UBS Group AG employs about 60,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).
Investors should consider the investment objectives, risks, charges, and expenses of a mutual fund carefully before investing. The money market funds' prospectuses contain this and other information about the Funds and should be read carefully before investing. Contact the UBS Asset Management National Sales Desk at 888-793 8637 or visit www.ubs.com/usmoneymarketfundsholdings for a current prospectus.
As indicated on the prior page, UBS Select Government Preferred Fund, UBS Select Government Instituitional Fund and UBS Select Government Investor Fund are currently in the process of being registered with the US Securities and Exchange Commission, and a selling prospectus is not yet available as of January 2016 for these funds.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Althought a money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund.
Not FDIC Insured. May lose value. No bank guarantee.