MINNEAPOLIS, Nov. 30, 2015 /PRNewswire/ - RBC Global Asset Management-US (RBC
GAM-US) announced today actions of the RBC Funds Trust Board of
Trustees regarding changes to its money market funds in response to
amendments to regulations governing money market mutual funds.
"RBC Global Asset Management has a long history of offering liquidity
and fixed income strategies as part of our investment platform. With
money market reform on the horizon, many investors are rethinking their
approach to cash management and looking for alternative solutions,"
said Mike Lee, Chief Executive Officer and Chief Investment Officer of
RBC GAM-US. "Following close consultation and discussion with our
clients, we feel that our lineup of cash management options is well
positioned to serve the long term interests of investors as they
navigate these changes."
RBC Money Market Funds
The U.S. Government Money Market Fund will continue to be offered to all
investors. The fund currently invests 99.5% or more of its assets in
U.S. Government securities or repurchase agreements and plans to
continue to operate in accordance with money market reform amendments,
including seeking to maintain a stable $1.00 net asset value per share
(NAV).
The Board of Trustees also stated its intention to not currently
implement liquidity fees or redemption gates for the U.S. Government
Money Market Fund.
The Prime Money Market Fund will no longer be offered to institutional
or retail investors after September 30, 2016 and will be closed to new
investments at a date to be determined, pending final Board approval
and appropriate notice to shareholders. Shareholders invested in the
fund will be notified of their options, including eligibility to
exchange shares of the Prime Money Market Fund for shares of the U.S.
Government Money Market Fund.
Money Market Reform
Under the amendments to Rule 2a-7, effective October 14, 2016,
institutional prime and municipal money market funds are required to
price and transact shares of such funds at a floating NAV. Retail and
U.S. government money market funds may continue to seek a stable $1.00
NAV.
In addition, both prime and municipal money market funds may be subject
to liquidity fees and redemption gates in the event weekly liquid
assets fall below a designated threshold.
"This is an opportune time for investors to review their cash management
strategies as they look to maintain liquidity and flexibility in their
investment portfolio," said John C. Donohue, Managing Director and Head
of Liquidity Management, RBC GAM-US. "Government money market funds
address that need by seeking to offer safety, liquidity and a
competitive yield."
In addition to several cash management options, including the U.S.
Government Money Market Fund, RBC GAM-US also offers short term fixed
income products such as the RBC Short Duration Fixed Income Fund and
RBC Ultra Short Fixed Income Fund, which can serve to assist our
shareholders who have shorter investment horizons.
RBC Global Asset Management has over $28 billion in global institutional
cash management assets, including over $19 billion in the U.S., as of
September 30, 2015.
For further information about the U.S. Government Money Market Fund,
please visit https://us.rbcgam.com/mutual-funds/money-market-funds/fg-7/fsg-5/fid-11/individual/overview/us-government-money-market-fund.fs.
About RBC Global Asset Management
RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada
(RBC), and includes institutional money managers BlueBay Asset
Management and Phillips, Hager & North Investment Management. RBC GAM
is a provider of global investment management services and solutions to
individual, high-net-worth and institutional investors through mutual
funds, exchange-traded funds, hedge funds, pooled funds, separate
accounts and specialty investment strategies. RBC GAM group of
companies manage more than $280 billion USD in assets and have
approximately 1,300 employees located across Canada, the United States,
Europe and Asia.
Before investing, you should carefully consider a fund's investment
objectives, risks, charges and expenses. This and other information is
included in the prospectus, which you can request by visiting /mutual-funds/literature/content/default.fs or calling 800.422.2766. Please read the prospectus carefully before
investing.
An investment in money market funds is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other governmental agency.
Although these funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in these
funds.
Net Asset Value (NAV) is a mutual fund's price per share, calculated by dividing the total
assets - less any liabilities - by the number of shares outstanding.
Mutual fund investing involves risk. Principal loss is possible.
Investments in debt securities typically decrease in value when
interest rates rise. This risk is usually greater for longer-term debt
securities. Investments in lower-rated and non-rated securities
presents a greater risk of loss to principal and interest than
higher-rated securities. Investments in foreign securities involve
greater volatility and political, economic and currency risks and
differences in accounting methods. These risks are greater for emerging
markets. Derivatives such as futures, forwards, and swaps involve risks
different from, and in certain cases, greater than the risks presented
by more traditional investments. Investments in Mortgage related
securities including pass-through securities and Collateralized
Mortgage Obligation include additional risks that investors should be
aware of including credit risk, prepayment risk, possible illiquidity
and default, as well as increased susceptibility to adverse economic
developments. The Fund's risks are more fully described in the
prospectus.
SOURCE RBC