Exposure to European financial institutions in “prime” money-market funds continues to be a concern to investors due to sovereign debt problems in the region and the risk of contagion with the European banking system. We do not have specific concerns with any of the three providers on the platform: State Street, Global Advisers, J.P. Morgan Asset Management and BlackRock, and we also note that they have been decreasing exposures to European financial institutions over the past several months.
However, Commonfund’s point of view is that the minimal incremental yield generated by allocations to the “prime” money market funds on the Treasury Access platform does not justify taking the additional risk in today’s economic environment.
A more prudent strategy for our cash investors would be to diversify their holdings between the five Treasury and Government Security Money Market funds offered on the platform. Treasury Access provides the ability to move cash allocations easily and navigate through a fluid environment. We strongly believe that diversification between providers and strategies is prudent in investing cash balances, particularly when liquidity is a primary concern.
Commonfund will continue to communicate updates to our Treasury Access investors on the markets and our point of view of ongoing cash investment risks.
Statements concerning Commonfund Group's views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Commonfund Group fund. Such statements are also not intended as recommendations by any Commonfund Group entity or employee to the recipient of the presentation. It is Commonfund Group's policy that investment recommendations to investors must be based on the investment objectives and risk tolerances of each individual investor. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund Group. Commonfund Group disclaims any responsibility to provide the recipient of this presentation with updated or corrected information.