One giant bank bailed out a pair of money funds, while another giant bank saw one of its funds' shadow NAVs dip below $1.

Sheila H. Patel Goldman Sachs Asset Management Chairman

Last week, Goldman Sachs injected $1.45 billion into its GS Financial Square Money Market Fund and $391 million into its GS Financial Square Prime Obligations Fund to boost the funds' liquidity, Reuters reports. The move comes amid continued market volatility and the ongoing coronavirus crisis, and after the Fed launched a money fund support program last week.

Meanwhile, also last week, the BNY Mellon team saw their New Jersey municipal money market fund's shadow NAV dip below $1, Reuters reports. Yet Reuters later clarified that, despite the disclosed shadow NAV dipping to $0.9968, the $51-million-AUM fund's official NAV was still $1. (The wire service's initial piece did not mention shadow NAV.)

(Money market mutual funds' NAVs typically stay at $1 or increases, but doesn't slip; however, their shadow NAVs do fluctuate. As long as a fund's shadow NAV doesn't dip more than half a penny, the fund's official NAV remains unchanged.)

Also last week, the Northern Trust team saw their Northern Prime Obligations Portfolio's twice suffer a drop a liquidity drop to 27 percent of AUM, below the key regulatory threshold of 30 percent, Reuters reports. Yet the fund's liquidity level bounced back to 41 percent after the Fed's move last week, the wire service notes.

Editor's Note: A prior version of this story conflated the BNY money fund's shadow NAV with its official NAV. The fund did not break the buck, as its official NAV did not dip below $1. 

Edited by: Neil Anderson, Managing Editor


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