money market offering mutual funds designed to woo back customers spooked by the financial crisis

JPMorgan Chase & Co. and a U.S. unit French bank Natixis SA are offering money market mutual funds designed to woo back customers spooked by the financial crisis to move their money to deposits insured by the federal government.

The new offerings promise to keep the half-life values at 10 days or less, a quarter of the funds of the competition, according to research companies and Crane Data LLC. shorter maturities allow administrators to change more quickly from an issuer with problems and other securities or cash.

"They are addressed directly to the cash manager paranoid," said Peter Crane, president of Crane Data LLC in Westborough, Massachusetts, that is $ 2,790,000,000,000 industry.

Money market funds lost its place as the main destination for corporate investment in the short term after the Fund $ 62,500,000,000 Primary Reserve collapsed in September 2008, prompting a run on funds that buy debt corporate. treasurers of the company moved cash to the security of bank deposits insured, which for more than a year have also provided more income than money funds because of historically low interest rates on short-term government bonds corporate.

The share of short-term investments of cash held in bank deposits rose to 42 percent from 25 percent two years earlier, according to a study published in June by the Association for Financial Professionals in Bethesda, Maryland. money market funds fell to 25 percent from 39 percent.

10 days

The current performance JPMorgan Money Market Fund, opened its doors in early October, keep a maturity-weighted asset holdings of 10 days or less "normal market conditions," according to the prospectus. The current yield is a hedge fund, which means it invests in corporate debt and government instruments.

Robert Deutsch, director of global liquidity in New York, JP Morgan, said that the short duration of the fund will also allow it to move quickly in high yield when the U.S. Federal Reserve raises interest rates over time.

Natixis liquid RNT Prime Portfolio, a fund run by the first Reich & Tang Asset Management LLC, which opened its doors on November 30 will maintain a weighted average maturity of the assets of nine days or less, said Tom Nelson, head of sales and marketing of New York-based company.

The average maturity of fund shares was 43 first days of November 30, according to the crane.

"New niche

Management of the funds is not a novelty short, but promising not to go over 10 days is unique, "said Peter Rizzo, senior director of fund services at Standard & Poor's in New York, in a telephone interview. "It could be a new niche."

The first fluid provides shareholders with a daily disclosure of its portfolio, while most funds disclose holdings of money monthly or quarterly. It also describes a list of authorized issuers which the fund can buy.

"The focus is less on the absolute level of performance in making our customers can understand what is in the portfolio and can see what might be in the portfolio," said Nelson.

Reserve Primary became the second money market fund in the history of four decades of industry to expose investors to a loss beginning after zero wrote $ 785 million in debt from bankrupt Lehman Brothers Holdings customers Inc. took 230 billion U.S. dollars of funds in the week ended September 19, 2008.