Another mutual fund company is leaving the changing money market mutual fund business, in this case by transforming its sole money fund into something else.
| Shawn Lytle|
to convert the $182.3-million Delaware Cash Reserve Fund
into an ultrashort-term bond fund, effective in January. Marlene Petter
, senior vice president of marketing and corporate communications, confirms that the fund is Delaware's only money fund.
Petter emailed MFWire
a statement about the upcoming conversion:
In the wake of impending money market fund reform, we determined that the most appropriate course of action would be to convert Delaware Cash Reserve Fund to an ultrashort fund. The fund's board approved the conversion in August. Following the conversion, the fund will no longer operate as a money market fund with a stable net asset value of $1.00 per share, but will have a fluctuating NAV.
The converted fund's ultrashort strategy will be a high quality (100% investment grade), short-term (<18mo. average effective duration) investment portfolio. Compared to a traditional money market fund the converted fund will offer greater diversification. Shareholders who do not want to hold shares of the converted fund will have sufficient time to redeem their shares prior to the conversion.
The fund dates back to 1978.
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