LONDON--(BUSINESS WIRE)--In response to the continued negative yield environment, the asset management arm of Northern Trust (Nasdaq: NTRS) has launched a variable net asset value (VNAV) fund as part of its money market fund range.
The Euro Liquidity Fund (a fund of the Northern Trust Global Funds plc) is designed to operate in both negative return environments and positive yielding markets and supports institutional investors requirements for liquid, diversified and high quality cash management products.
“We anticipate the current negative Euro cash investment rate environment will persist for some time and the effect this has on interest accrual does not support a constant net asset value fund or structure particularly well,” said David Blake, director of international fixed income at Northern Trust Asset Management. “By launching our VNAV fund, we offer investors greater transparency whilst meeting their objectives for security and liquidity, despite the lower return environment.”
In contrast to constant net asset value (CNAV) accounting, VNAV accounting enables the price of the fund to move each day to reflect its valuation. Earlier this year, the US Securities and Exchange Commission ruled that institutional money market funds will be required to convert to VNAV fund accounting within two years. In Europe, the European Commission is deliberating a similar proposal.
“Regardless of the return environment, we believe VNAV is the future structure for money market funds due to their ability to allow continued access to high quality, same-day liquidity,” said Wayne Bowers, chief investment officer, for Northern Trust Asset Management in Europe, Middle East, Africa and Asia-Pacific. “Northern Trust’s VNAV Euro fund offers transparency, an unchanged investment philosophy and a long term structure that satisfies investor demand as well as regulatory concerns.”
Northern Trust Asset Management is a global leader in delivering innovative investment management to corporations, institutions and charities. For 125 years, we have evolved with the changing needs of our clients and our world.
Asset Management at Northern Trust comprises Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc. and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of asset servicing, fund administration, asset management, fiduciary, and banking solutions for corporations, institutions, families, and individuals worldwide. Chicago-based Northern Trust has offices in 19 states, Washington, D.C., and 20 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2014, Northern Trust had assets under custody of US$5.9 trillion, and assets under investment management of US$923.3 billion. For 125 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com and follow us on Twitter @NorthernTrust.
Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at http://www.northerntrust.com/disclosures