Texas Capital Bank Private Wealth Advisors is seeking to improve its position in the $6.5 trillion money market industry, and announced today that it has introduced the “first” ETF that follows money market fund rules.
of Texas Capital Government Money Market ETF (MMKT) Texas Capital said it intends to provide high current interest income while maintaining liquidity and principal stability in compliance with Rule 2a-7. press release.
“As the first ETF committed to complying with Rule 2a-7, the provision of the Investment Company Act of 1940 that regulates money market funds, Texas Capital believes that the combination of the tradability of an ETF with the structure of a money market fund provides an important investment option for investors,” Daniel Hoberman, head of corporate investment banking at Texas Capital, said in a statement.
The fund will invest at least 99.5% of its assets in cash, Treasury securities and fully collateralized repurchase agreements, according to a fund announcement. Prospectus Filed with the Securities and Exchange Commission.
MMKT differs from traditional money market funds in that it does not maintain a $1 net asset value (NAV) table, instead calculating its NAV based on the market value of its investments.
Texas Capitals Enter the Competition
The launch coincides with a period of growth for money market funds: According to research from Managing Partners Group (MPG), U.S. money market fund assets now stand at $6.5 trillion.
“Record amounts of money will return to the bond market over the next few years,” said Jeremy Leach, CEO of MPG, commenting on a survey on current market trends. “As we appear to be entering a period of declining inflation and lower interest rates, our research has uncovered strong demand for bonds that offer stability, diversification and a regular stream of income.”
According to MPG research, 96% of institutional investors and asset managers agree that their investment strategies are once again turning to fixed income for portfolio stability, diversification and income.
The survey also uncovered a potential shift in capital: More than half of investors surveyed expect between $2 trillion and $2.5 trillion to flow out of U.S. money markets and into bond markets over the next few years.
MMKT has an expense ratio of 0.2%, according to its prospectus. The fund's holdings range from overnight repurchase agreements to securities with maturities of 13 months.
The debut marks Texas Capital's fourth ETF offering and follows a $26.2 million Texas-focused debt offering. Texas Capital Texas Equity Index ETF (TXS) last year.
Permalink | © Copyright 2024 Visit etf.com. Reproduction without permission is prohibited.
