December 2016

With Basel III set to change how banks view deposits there is an increasing interest amongst corporates in off-balance sheet solutions such as Money Market Funds (MMFs). Money market funds are an attractive option to corporates because of the safety and liquidity they offer, as well as the ability to invest across a broad spectrum of highly-rated assets.

However, the MMF industry in Asia is young; meaning that knowledge of how funds operate is limited in the corporate community, especially when compared to more developed markets such as the US and the EU. Corporate treasurers need to make sure they understand the differences between money market funds and how they operate in each market as characteristics and risks of money market funds can vary substantially.

Unfortunately, publicly available information relating to money market funds can be quite restricted. We advise that companies should not necessarily opt for the largest fund with the best yield, but consider a fund which has a good track record, has been in the market a long time, in addition to having the required resources in place to provide thorough portfolio management and quality credit research.

Read the interview with Kheng Leong Cheah, Head of Global Liquidity Sales, Asia Pacific at J.P. Morgan Asset Management and Aidan Shevlin, Head of Asia Pacific Liquidity Fund Management at J.P. Morgan Asset Management as they discuss the advantages of money market funds over traditional bank deposits, as well as the considerations for corporate treasurers when choosing a global MMF provider.

You can also download other Liquidity Insights from our J.P. Morgan Global Liquidity website www.jpmgloballiquidity.com With its user-friendly navigation, you’ll find a seamless connection between liquidity investment solutions and our best thinking, which can help you meet your goals in today’s complex investing environment.

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