FINANCIAL TIMESMonday 6 April 2020 FTfm| 3NEWS
tute. “The faster these funds
take in new money, the faster
returns head to zero,” said Pete
Crane, who runs money mar-
ket fund data provider Crane
Data. “The only glimmer of
hope is that the torrential
flows into Treasury money
market funds has some of
them looking to shut their
doors. Fidelity is doing this to
protectexistinginvestors.”
Existing holders of the three
affected funds will still be able
to add more money. The clo-
sures to new investors do not
affect the rest of Fidelity’s
range of money market funds
which invest in Treasury
and other government debt.
Fidelity declined to comment
beyond the note sent to
investors.
SubadraRajappa,headofUS
rates strategy at Société Géné-
rale,saidanexpecteddelugeof
new issuance of Treasury bills,
to fund the record $2tn stimu-
lus package agreed by US legis-
lators last week, could change
behaviour.shelter from a sharp sell-off
across markets, has dragged
the yield on three-month
Treasuries to below zero, com-
pared with more than 1.5 per
centinFebruary.
Money market funds that
invest in Treasuries have been
a particular favourite of inves-
tors seeking to keep theirmanager said that its Fidelity
Treasury Only Money Market
Fund, Fidelity Institutional
Money Market Treasury Only
Portfolio and Fidelity Institu-
tionalMoneyMarketTreasury
Portfolio would close to new
investors.
“Restricting inflows will
help reduce the number of
new Treasury securities that
the funds will need to pur-
chase,” the investor note said.
“That’s important because the
newer issues generally have
lower yields than the funds’
current holdings, and as such
they would affect the funds’
ability to continue to deliver
positive net yields to share-
holders.”
The Federal Reserve
abruptly slashed interest rates
last month as it sought to ease
financial conditions and tem-
per an escalating economic
downturn sparked by the
spreadofcoronavirus.
The move, amplified by
investors seeking out the
safety of government debt toJ O E R E N N I S O N— LO N D O N
CO L BY S M I T H— N E W YO R K
Fidelity said it would stop
accepting new money into
three money market funds
that invest in US Treasuries, as
it sought to protect existing
investors from the dramatic
decline in interest rates since
theoutbreakofcoronavirus.
Assets in the three funds
have soared by more than
$23bn to $85bn during last
month’s clamour for safe
assets,andnewmoneyhashad
to be invested in increasingly
low-yieldingsecurities.
With some short-term
Treasury debt even trading
with negative yields, new
investments could dilute
returns for existing investors
inthefunds,Fidelitysaid.
Inanotetoinvestorsseenby
the Financial Times, the assetFidelity shuts three Treasury funds to new investors
MONEY MARKET FUNDS
Move to stop inflows
diluting returns for
existing holdersThree money market funds
of Anne Richards’ Fidelity
have experienced a big rise
in assets— Simon Dawson/Bloombergmoney insafe havens during
thevirus-relatedturmoil.
Assets in such funds have
skyrocketed from $800bn at
the beginning of March to over
$1tn, notching their largest
one-month rise on record in
data going back to the begin-
ning of 2007, according to the
Investment Company Insti-‘A forced sale may only
be possible at a steep
discount to a more
reasonable price later’B I L LY N AU M A N A N D
E R I C P L AT T— N E W YO R K
Western Asset, one of the
biggest bond managers in the
US, is trying to avoid a fire sale
ofassetsfromacorporatebond
portfolio after several
companies hit hard by the
coronavirusoutbreakhadtheir
creditratingscuttojunk.
The $460bn investment
managerlastmonthrequested
awaiverfromaFresnoCounty,
Californiapublicpensionfund,
seeking extra time to get its
institutional investment grade
credit portfolio in order after
the downgrade of Occidental
Petroleum pushed it over its
limitofjunk-ratedholdings.
Withoutthewaiver,Western
would be forced to quickly
sell some of the downgraded
companies’ debt with no
guarantee it could get a good
price. “Given the extra-
ordinary volatility, we are
asking for an extension of our
standardinternalthree-dayfix
policytoa30-dayfixwindowto
allow us to remedy the outage
in an efficient and prudent
manner,” Western said in a
lettertothepensionfund.
The Fresno fund, which has
about $190m invested withWestern, approved the waiver
atitsApril1boardmeetingand
extended the bond manager’s
window to get into compliance
to60-90days.
“A forced sale may only be
possibleatasteepdiscounttoa
more reasonable transaction
price later,” said plan
administratorDonaldKendig.
While Western has only
breached its 5 per cent junk
bondthresholdbyapercentage
point, its situation should be a
warning to investment grade
bond managers across the
market as large sums of debt
have been cast into junk
territory.
Credit rating agencies have
moved swiftly as the economic
fallout from the coronavirus
outbreak has crystallised. S&P
Global, the largest rating
agency, has downgraded more
than200companiesbecauseof
the pandemic, with energy
groups such as Occidental
particularlyhardhitbythedrop
in demand for oil alongside adispute between big crude-
producingcountries.
Overall, Western manages a
totalof$14bninitsinvestment
grade credit strategy. The
waiver request was first
reported by Financial Times
Specialist publication
MandateWire.
Regulators have warned
aboutabuild-upofdebtonthe
lowestrungsoftheinvestment-
grade ratings ladder, which
could lead to market
disruptions if a wave of
downgradesforcesinvestorsto
unload securities that no
longerfittheirportfolio.
CarmakerFord,department
store operator Macy’s,
packaged foods maker Kraft
Heinz and US airline Delta are
among those to have lost their
investmentgraderating.
Their re-rating as junk has
caused painful losses for
some bondholders. Occidental
bondsthatmaturein2029have
halved in value over the past
month and changed hands last
Tuesday at 47 cents on the
dollar.
Ford debt due in 2046 has
also tumbled precipitously,
and was quoted at less than 60
centsonthedollar.Western Asset seeks waiver to
avoid fire sale of junk bonds
10 | FTfm FINANCIAL TIMESMonday6 April 2020
FTfm
Fund Bid Offer D+/- Yield
Ennismore Smaller Cos Plc (IRL)
5 Kensington Church St, London W8 4LD 020 7368 4220
FCA Recognised
Ennismore European Smlr Cos NAV£128.18 - 0.61 0.00
Ennismore European Smlr Cos NAV€146.06 - 0.97 0.00
Ennismore European Smlr Cos Hedge Fd
Other International Funds
NAV €500.14 - -30.320.00
Equinox Fund Mgmt (Guernsey) Limited (GSY)
Regulated
Equinox Russian Opportunities Fund Limited$143.53 - -35.690.00
Euronova Asset Management UK LLP (CYM)
Regulated
Smaller Cos Cls One Shares € 42.29 - 2.35 0.00
Smaller Cos Cls Two Shares € 28.25 - 1.56 0.00
Smaller Cos Cls Three Shares € 14.12 - 0.78 0.00
Smaller Cos Cls Four Shares € 18.31 - 1.02 0.00
FIL Investment Services (UK) Limited (1200)F(UK)
130, Tonbridge Rd, Tonbridge TN11 9DZ
Callfree: Private Clients 0800 414161
Broker Dealings: 0800 414 181
OEIC Funds
American Special Sits W-ACC-GBP£ 12.62 - 0.04 0.96
Asian Dividend Fund W-ACC-GBP£ 1.65 - 0.02 3.80
China Consumer Fund W-ACC-GBP£ 2.87 - 0.04 0.58
Emerging Asia Fund W-ACC-GBP £ 1.41 - 0.02 1.23
Enhanced Income Fund W-INC-GBP£ 0.70 - -0.02 8.85
European Fund W-ACC-GBP £ 15.71 - 0.05 1.92
Fidelity American Fund W-ACC-GBP£ 41.43 - 0.40 0.39
Fidelity Asia Fund W-ACC-GBP £ 12.88 - 0.15 1.22
Fidelity Cash Fund Y-ACC-GBP £ 1.02 - 0.00 0.55
FID Emerg Europe, Middle East and Africa Fund W-ACC-GBP£ 1.54 - 0.03 6.12
Fidelity Global Enhanced Income Fund W-ACC-GBP£ 1.70 - 0.01 -
Fidelity Global Focus Fund W-ACC-GBP£ 21.75 - 0.02 0.29
Fidelity Global High Yield Fund Y-ACC-GBP£ 12.60 - 0.00 4.45
Fidelity Japan Fund W-ACC-GBP £ 3.66 - 0.00 0.74
Fidelity Japan Smaller Companies Fund W-ACC-GBP£ 2.95 - 0.00 0.48
Fidelity Select 50 Balanced Fund PI-ACC-GBP£ 0.96 - -0.01 0.78
Fidelity Special Situations Fund W-ACC-GBP£ 24.76 - -0.42 4.37
Short Dated Corporate Bond Fund Y ACC GBP£ 10.45 - 0.01 3.69
Fidelity Sustainable Water & Waste W Acc£ 0.81 - 0.01 -
Fidelity UK Growth Fund W-ACC-GBP£ 3.34 - -0.05 1.14
Fund Bid Offer D+/- Yield
Fidelity UK Select Fund W-ACC-GBP£ 2.41 - -0.03 2.88Global Dividend Fund W-ACC-GBP£ 2.15 - 0.02 3.02Global Property Fund W-ACC-GBP£ 1.62 - -0.02 -Global Special Sits W-ACC-GBP £ 34.77 - -0.10 0.93MoneyBuilder Balanced Y-ACC-GBP£ 0.51 - -0.01 3.43MoneyBuilder Dividend Y-INC-GBP£ 0.97 - -0.02 6.46Multi Asset Income Fund W-INC-GBP£ 0.95 - 0.00 4.73Multi Asset Open Growth Fund W-ACC-GBP£ 1.21 - 0.02 0.00Multi Asset Open Strategic Fund W-ACC-GBP£ 1.22 - 0.01 0.00Open World Fund W-ACC-GBP £ 1.47 - 0.04 0.00UK Smaller Companies W-ACC-GBP£ 1.74 - -0.02 2.87Institutional OEIC Funds
Europe (ex-UK) Fund ACC-GBP £ 5.10 - 0.01 1.07Findlay Park Funds Plc (IRL)
30 Herbert Street, Dublin 2, Ireland Tel: 020 7968 4900
FCA Recognised
American Fund USD Class $112.94 - 2.57 0.00American Fund GBP Hedged £ 57.40 - 1.29 0.00American Fund GBP Unhedged £ 91.22 - 2.40 0.00First State Investments (UK) (1200)F (UK)
23 St Andrew Square, Edinburgh, EH2 1BB
[email protected]
Client Services: 0800 587 4141 Dealing Line: 0800 587 3388
Authorised Funds
Asia-All Cap Acc GBP £ 1.30 - 0.01 1.11Asia Focus Acc GBP £ 1.67 - 0.01 1.20Diversified Growth B Acc £ 1.09 - 0.00 1.44Japan Focus Acc GBP £ 1.84 - 0.00 0.04Foord Asset Management
Website: http://www.foord.com - Email: [email protected]
FCA Recognised - Luxembourg UCITS
Foord International Fund | R $ 38.23 - -0.24 -Foord Global Equity Fund (Lux) | R$ 11.22 - 0.04 -Regulated
Foord Global Equity Fund (Sing) | B$ 13.76 - 0.05 0.00Foord International Trust (Gsy) $ 37.96 - -0.24 0.00Franklin Templeton International Services Sarl(IRL)
JPMorgan House - International Financial Services Centre,Dublin 1, Ireland
Other International Funds
Franklin Emerging Market Debt Opportunities Fund Plc
Franklin Emg Mkts Debt Opp CHFSFr13.42 - -2.47 11.63Franklin Emg Mkts Debt Opp GBP£ 8.65 - -1.75 8.40Franklin Emg Mkts Debt Opp SGDS$ 18.99 - -3.39 6.11Fund Bid Offer D+/- Yield
Franklin Emg Mkts Debt Opp USD$ 14.77 - -2.71 8.28GAM
[email protected], http://www.funds.gam.com
Regulated
LAPIS GBL TOP 50 DIV.YLD-Na-D £ 89.42 - 1.68 2.94LAPIS GBL F OWD 50 DIV.YLD-Na-D£ 81.80 - 0.46 -Genesis Investment Management LLP
Other International Funds
Emerging Mkts NAV £ 7.21 - -0.16 0.00HPB Assurance Ltd
Anglo Intl House, Bank Hill, Douglas, Isle of Man, IM1 4LN 01638 563490
International Insurances
Holiday Property Bond Ser 1 £ 0.51 - -0.01 0.00Holiday Property Bond Ser 2 £ 0.64 - 0.00 0.00INDIA VALUE INVESTMENTS LIMITED (INVIL)
http://www.invil.mu
Other International Funds
NAV £ 9.29 - 0.00 0.00Intrinsic Value Investors (IVI) LLP (IRL)
1 Hat & Mitre Court, 88 St John Street, London EC1M 4EL +44 (0)20 7566 1210
FCA Recognised
IVI European Fund EUR € 17.89 - -0.09 0.00IVI European Fund GBP £ 20.90 - -0.16 0.43Janus Henderson Investors (UK)
PO Box 9023, Chelmsford, CM99 2WB Enquiries: 0800 832 832
http://www.janushenderson.com
Authorised Inv Funds
Janus Henderson Instl UK Idx Opps A Acc£ 0.76 - 0.00 -Kames Capital ICVC (UK)
Kames House, 3 Lochside Crescent, Edinburgh, EH12 9SA
0800 358 3009 http://www.kamescapital.com
Authorised Funds
Kames Global Equity GBP B Acc £ 1.93 - 0.00 0.26Kames Capital VCIC (IRL)
1 North Wall Quay, Dublin 1, Ireland +35 3162 24493
FCA Recognised
Absolute Return Bond B GBP Acc 1095.72 - 1.85 1.98High Yield Global Bond A GBP Inc 417.42 - -0.83 3.64High Yield Global Bond B GBP Inc 888.94 - -1.72 4.39Kames Global Equity Income B GBP Acc 1576.98 - 26.870.00Fund Bid Offer D+/- Yield
Kames Global Equity Income B GBP Inc 1455.44 - -8.32 3.19Kames Global Equity Market Neutral Fund - B Acc GBP£ 10.11 - 0.00 0.00Kames Inv Grd Gbl Bond A Inc GBH 566.73 - -1.58 1.73Global Sustainable Equity B Acc GBP£ 15.54 - 0.05 0.00Global Sustainable Equity C Acc GBP£ 15.73 - 0.05 0.00Short Dated High Yld Bd B Acc GBP£ 9.45 - 0.00 0.00Short Dated High Yld Bd C Acc GBP (Hdg)£ 9.52 - 0.00 0.00Strategic Global Bond A GBP Inc 1090.78 - 0.93 1.01Strategic Global Bond B GBP Inc 619.31 - 0.54 1.76Lloyds Investment Fund Managers Limited (1000)F(JER)
PO Box 311, 11-12 Esplanade, St Helier, Jersey, JE4 8ZU 01534 845555
Other International Funds
Lloyds Investment Funds Limited
Euro High Income €1.4460xd - 0.00302.96High Income £0.8267xd - 0.00434.01Sterling Bond £1.4870xd - 0.01002.40Lloyds Multi Strategy Fund Limited
Conservative Strategy £1.1530 - 0.00000.00Growth Strategy £1.5310 - 0.00100.00Aggressive Strategy £2.0160 - 0.01000.00Global USD Growth Strategy $1.4010 - 0.00800.00Dealing DailyLothbury Property Trust (UK)
155 Bishopsgate, London EC2M 3TQ +44(0) 20 3551 4900
Property & Other UK Unit Trusts
Lothbury Property Trust GBP £1934.322092.221.54 -MMIP Investment Management Limited (GSY)
Regulated
Multi-Manager Investment Programmes PCC Limited
UK Equity Fd Cl A Series 01 £2678.372710.53-291.520.00Diversified Absolute Rtn Fd USD Cl AF2$1622.95 - -30.270.00Diversified Absolute Return Stlg Cell AF2£1546.87 - -30.930.00Global Equity Fund A Lead Series£1491.221496.14-84.520.00Marwyn Asset Management Limited (CYM)
Regulated
Marwyn Value Investors £340.40 - -14.660.00Milltrust International Managed Investments ICAV(IRL)
[email protected], +44(0)20 8123 8369 http://www.milltrust.com
Regulated
British Innovation Fund £100.02 - 3.18 0.00MAI - Buy & Lease (Australia) A$102.52 - 2.25 0.00Fund Bid Offer D+/- Yield
MAI - Buy & Lease (New Zealand)NZ$97.29 - 0.06 0.00Milltrust Global Emerging Markets Fund - Class A$ 73.82 - -0.75 -The Climate Impact Asia Fund (Class A)$ 91.15 - -4.27 -Mirabaud Asset Management (LUX)
http://www.mirabaud.com, [email protected]
Conviction based investment vehicles details available here http://www.mirabaud-am.com
Regulated
Mir. - Glb Strat. Bd I USD $109.16 - 0.09 0.00Mir. - DiscEur D Cap GBP £113.92 - -0.39 0.00Mirabaud - UK Equity High Alpha£ 91.11 - -1.48 0.00Morgens Waterfall Vintiadis.co Inc
Other International Funds
Phaeton Intl (BVI) Ltd (Est) $545.41 - 31.500.00New Capital UCITS Fund PLC (IRL)
Leconfield House, Curzon Street, London, W1J 5JB
http://www.newcapitalfunds.com
FCA Recognised
New Capital UCITS Funds
New Capital China Equity Fund $164.24 - 1.51 0.00New Capital Dynamic European Equity Fund€103.58 - -0.29 -New Capital Dynamic UK Equity Fund£ 93.13 - -0.41 0.00New Capital Global Alpha Fund £ 98.10 - 0.13 0.00New Capital Global Equity Conviction Fund$124.66 - 1.64 0.00New Capital Global Value Credit Fund$142.22 - 0.12 0.00New Capital Japan Equity Fund ¥1021.41 - -11.200.00New Capital US Growth Fund $259.87 - 3.63 0.00New Capital US Small Cap Growth Fund$111.35 - 1.33 -New Capital Wealthy Nations Bond Fund$134.48 - 0.27 0.00Northwest Investment Management (HK) Ltd
11th Floor, Kinwick Centre, 32, Hollywood Road, Central Hong Kong +852 9331 9220
Other International Funds
Northwest China Opps Class T $ $2953.12 - 122.470.00Northwest Feilong Class T $ $2079.06 - 73.880.00Northwest Fund Class T $ $2726.11 - 110.690.00Fund Bid Offer D+/- Yield
Northwest Warrant Class A $ $1330.60 - 12.110.00Oasis Crescent Management Company Ltd
Other International Funds
Oasis Crescent Equity Fund R 10.19 - 0.07 1.12Oasis Global Mgmt Co (Ireland) Ltd (IRL)
Regulated
Oasis Crescent Global Investment Fund (Ireland) plc
Oasis Crescent Global Short Term Income Fund I - Class A Dist$ 0.98 - 0.00 2.47Oasis Crescent Global Equity Fund$ 26.65 - 0.30 0.47Oasis Crescent Variable Balanced Fund£ 8.10 - 0.03 0.12OasisCresGl Income Class A $ 10.37 - 0.00 2.98OasisCresGl LowBal D ($) Dist $ 10.81 - 0.03 1.10OasisCresGl Med Eq Bal A ($) Dist$ 11.46 - 0.03 0.45Oasis Crescent Gbl Property Eqty $ 6.41 - 0.00 1.95Omnia Fund Ltd
Other International Funds
Estimated NAV $646.42 - -55.040.00Oryx International Growth Fund Ltd
Other International Funds
NAV (Fully Diluted) £ 9.10 - -0.52 0.00Orbis Investments (U.K.) Limited (GBR)
28 Dorset Square, London, NW1 6QG
http://www.orbis.com 0800 358 2030
Regulated
Orbis OEIC Global Cautious Standard£ 9.21 - 0.04 0.03Orbis OEIC Global Balanced Standard£ 12.20 - 0.09 0.00Orbis OEIC Global Equity Standard£ 13.71 - 0.09 0.00Orbis OEIC UK Equity Standard £ 5.59 - 0.03 0.00