Wells Fargo Advantage Funds today announced that its Board of
Trustees preliminarily approved changes to its money market fund
lineup to address the regulatory changes adopted by the U.S.
Securities and Exchange Commission (SEC) in July 2014. These
changes will become effective on or prior to October 14, 2016.
“We aim to offer a broad money market fund lineup that best
meets the cash management needs of both our retail and
institutional clients,” said Karla Rabusch, president of
Wells Fargo Advantage Funds. “After speaking at length with
clients, we are confident that we are offering them the right mix
of options, without wavering from our long-standing investment
approach that combines a rigorous credit analysis with steadfast
attention to preservation of capital and liquidity.”
Wells Fargo Advantage Funds managed $110.5 billion in money
market assets as of March 31, 2015.
Retail prime and municipal money market funds
Under the new SEC regulations, retail prime and municipal money
market funds are required to maintain policies and procedures that
are reasonably designed to limit all beneficial owners of the fund
to natural persons. These funds are permitted to continue to use
amortized cost to transact at a stable $1.00 net asset value (NAV)
but may be subject to liquidity fees and/or redemption gates in the
event that their weekly liquid assets fall below 30%.
Wells Fargo Advantage Funds intends that the following funds
will take steps to qualify as retail money market funds:
- Wells Fargo Advantage California
Municipal Money Market Fund
- Wells Fargo Advantage Money Market
Fund
- Wells Fargo Advantage Municipal Money
Market Fund
- Wells Fargo Advantage National Tax-Free
Money Market Fund
Institutional prime and municipal money market funds
These funds will no longer be permitted to maintain a stable
$1.00 NAV but will instead be required to transact at their
market-based NAVs, rounded to four decimal places. They may also be
subject to liquidity fees and/or redemption gates in the event that
their weekly liquid assets fall below 30%.
Wells Fargo Advantage Funds intends to offer the following
funds as institutional money market funds:
- Wells Fargo Advantage Cash Investment
Money Market Fund
- Wells Fargo Advantage Heritage Money
Market FundSM
- Wells Fargo Advantage Municipal Cash
Management Money Market Fund
Government money market funds
Under the new SEC regulations, government money market funds are
permitted to continue to maintain a stable $1.00 NAV. However, such
government money market funds will be required to invest at least
99.5% of total assets in government securities, cash, and/or
repurchase agreements that are fully collateralized by government
securities or cash. The Wells Fargo Advantage 100% Treasury Money
Market Fund, the Wells Fargo Advantage Government Money Market
Fund, and the Wells Fargo Advantage Treasury Plus Money Market Fund
invest exclusively in these securities and thus already comply with
this new requirement.
Additionally, the new SEC regulations do not mandate liquidity
fees and redemption gates for government money market funds. The
Board has determined that it has no current intention of adopting
liquidity fees or redemption gates on the government money market
funds.
Wells Fargo Advantage Funds intends to continue offering the
following funds as government money market funds:
- Wells Fargo Advantage 100% Treasury
Money Market Fund
- Wells Fargo Advantage Government Money
Market Fund
- Wells Fargo Advantage Treasury Plus
Money Market Fund
Rabusch added, “We also continue to evaluate opportunities for
new product development. We remain actively engaged in discussions
with our distribution partners and clients in an effort to
understand how our investors’ liquidity and cash management needs
will change as a result of the new regulations. These discussions
are helping us gather information so that we may better adapt to
these regulatory changes and offer our clients the optimal mix of
liquidity management solutions.”
Preliminary designations for Wells Fargo
Advantage Money Market Funds(Effective on or prior to
October 14, 2016)
Retail money
market funds
Fund Category
NAV Fees/gates California Municipal
Money Market Fund Municipal Stable
Yes Money Market Fund Prime
Stable Yes Municipal Money Market Fund
Municipal Stable Yes National
Tax-Free Money Market Fund Municipal
Stable Yes
Institutional
money market funds
Fund Category
NAV Fees/gates Cash Investment Money
Market Fund Prime Floating
Yes Heritage Money Market Fund Prime
Floating Yes Municipal Cash Management Money
Market Fund Municipal Floating
Yes
Government money
market funds
Fund Category
NAV Fees/gates 100% Treasury Money
Market Fund Government Stable
No Government Money Market Fund Government
Stable No Treasury Plus Money Market
Fund Government Stable No
About Wells Fargo Funds Management
Wells Fargo Funds Management, LLC, a wholly owned subsidiary of
Wells Fargo & Company, provides investment advisory and
administrative services for Wells Fargo Advantage Funds. Other
affiliates of Wells Fargo & Company provide subadvisory and
other services for the funds. The funds are distributed by Wells
Fargo Funds Distributor, LLC, Member FINRA, an affiliate of Wells
Fargo & Company.
An investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. Although the 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.
In regards to the Wells Fargo Advantage 100% Treasury Money
Market, Government Money Market and Treasury Plus Money Market
Fund, the U.S. government guarantee applies to certain underlying
securities and not to shares of the fund.
In regards to the Wells Fargo Advantage California Municipal
Money Market, Municipal Money Market, Municipal Cash Management
Money Market and National Tax-Free Money Market Fund, a portion of
the fund’s income may be subject to federal, state, and/or local
income taxes or the Alternative Minimum Tax (AMT).
Some of the information contained herein may include
forward-looking statements about the expected investment activities
of the funds. These statements provide no assurance as to the
funds’ actual investment activities or results. The reader must
make his/her own assessment of the information contained herein and
consider such other factors as he/she may deem relevant to his/her
individual circumstances.
234028 05-15
NOT FDIC INSURED • NO BANK GUARANTEE • MAY
LOSE VALUE
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version on businesswire.com: http://www.businesswire.com/news/home/20150521005675/en/
Wells Fargo Advantage FundsLiz Kennedy,
617-210-2164elizabeth.p.kennedy@wellsfargo.com
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