Context: Money market funds (MMFs) that invest in U.S. Treasury securities have a prominent place in the cash investment management tool box used by many NeuGroup member companies focused on capital preservation, liquidity and safety. In a recent, small survey of members of NeuGroup for Cash Investments sponsored by TreasurySpring more than 90% of respondents said they invest in MMFs.
Money market portals offer cash investment managers platforms to put cash to work in MMFs from a variety of asset managers. Some are run by banks with whom the corporates have other business, including J.P. Morgan’s Morgan Money platform and Mosaic from Goldman Sachs; others are operated by independent providers, including ICD Portal. - MMF portals typically offer so-called tech credits used by corporates who join their platforms to offset technology expenses, defraying some of the cost of treasury management systems and other tech tools offered by vendors including Bloomberg and Clearwater Analytics.
- At a recent session of the cash investment group, members discussed how tech credits offered in the U.S. differ with other markets. In the EU, fund families negotiate rebates, in contrast to a more regulated process in the U.S.
Member question: “Does anyone use Morgan Money or any other MMF portal that can share their experiences with me? We are looking at ICD, Morgan Money and State Street’s Fund Connect. I know tech credits are a big consideration; but other than that, what is most satisfying about the portal you are using? I appreciate sharing of your knowledge and experiences.”
NeuGroup Insights asked the member to elaborate. “We are looking to replace the existing portal from our cash management bank,” they said, adding that tech credits are one reason. “But it’s not just about tech credits; it’s also about the limited funds available on the platform, the user interface and limited reporting capability. Of course, the flip side is that we have enjoyed operational efficiency with fund settlement being within the same bank.” - They added, “MMFs have not been one of our focus areas in investment, as we manage multiple external and internal portfolios. But with share buybacks and more uncertainty in interest rates, we shifted our focus to managing ultra short cash and systems as well.”
Peer answer 1: “We looked at all the above and recently switched to Morgan Money. Happy to connect and share our experience.”
Peer answer 2: ‘We use BNY Mellon’s LiquidityDirect (they are also our custodian for investments and one of our main cash management banks). Our considerations:
- “Share class availability (some MMFS offer lower-fee classes that some portals may not make available)
- “Connectivity between our portal and our TMS (FIS Integrity)
“DEI share class availability had been a consideration, although the yields I’ve seen have not been competitive since the Fed started hiking rates in 2022.”
Peer answer 3: “We also use BNY’s LiquidityDirect. In the past, we used other portals. One of the biggest considerations is tech credits, and we are happy with their offering when compared to others. - “Also, we appreciate their informal daylight overdraft as they use their balance sheet to push sale proceeds to the customer within ~30 minutes. In the past, we’d be waiting hours for our money and chasing proceeds later in the day.”
Peer answer 4: “We use ICD currently and are happy with the offerings and service. Because we use JPM for our operating accounts and JPM is ICD’s custodian, we are able to see funds move very quickly in either direction. We receive tech credits from ICD as well and usually put them to work on a quarterly basis.”
Peer answer 5: “We use Goldman Sachs’ Mosaic for our money fund portal. We made the decision based on tech credits, integration with TMS (ION’s Wallstreet Suite) and ease of use.”
