Government Liquidity Fund

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We have launched an innovative strategy for institutional investors looking to diversify their cash holdings beyond the banking sector. Our Government Liquidity Fund is a money market fund that incorporates security for investors in the form of UK government securities, offers liquidity and aims to provide a yield equivalent to prime money market funds.

The Government Liquidity Fund is unique. It conducts the majority of its reverse repo transactions with UK defined benefit pension funds, taking UK government debt as security against all cash investments. This means that the Fund is able to bypass the majority of dealing costs that are prevalent in the repo market. This structure aims to offer security to cash investors, without compromising on liquidity or yield relative to prime money market funds.

Security: all trades secured against UK government securities. Approximately 70% of exposure to UK pension funds and 30% to traditional banks.  All pension fund counterparties must be eligible to enter a PPF assessment period in the event their corporate sponsor experiences financial difficulty

Liquidity: daily liquidity with overnight access (i.e. one day's notice required with 4pm cut off UK time)

Yield: in line with prime money market funds and with the objective of offering yields higher than those provided by government liquidity funds dealing exclusively with banks

Constant-NAV structure:  under the new EU money market regulations, we expect that the Fund will retain a constant NAV whereas prime money market funds will likely convert to a variable NAV



GLF Fund table

Insight's money market team

Our team comprises five dedicated money market and liquidity fund managers who invest £40.5bn on behalf of our clients. They have an average of 22 years' industry experience.

Our team also draws on our wider Fixed Income Group which employs 108 investment professionals managing £121.5bn of fixed income assets. The team is supported by 46 credit research analysts and eight dedicated investment dealers.

Government Liquidity Fund

  • £2.3bn Fund size
  • 39days Weighted average maturity
  • 39days Weighted average life

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Portfolio data in the green boxes is shown correct as of 28 February 2018. Team statistics and assets under management (AUM) data shown as at 30 September 2017 and represented by the value of cash securities and other economic exposure managed for clients.

Important information

The value of investments and any income from them will fluctuate and is not guaranteed (this may be partly due to exchange rate fluctuations). Investors may not get back the full amount invested. Past performance is not a guide to future performance.

This is not a banking product and whilst preservation of capital is a major component of the objective it is not guaranteed. Neither Insight nor any other BNYM group company will provide capital support in the event of any capital loss.

Derivatives may be used to generate returns as well as to reduce costs and/or the overall risk of the portfolio. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment.

Shareholders of the Fund and clients of the Investment Manager and Sub-Investment Manager may act directly as repo and reverse repo counterparties to the Fund. This may give rise to potential conflicts of interest.

Portfolios which enter into repurchase and reverse repurchase agreements may be exposed to losses if the counterparty does not fulfil its obligations to the portfolio

Investments in bonds are affected by interest rates and inflation trends which may affect the value of the portfolio.

The investment manager may invest in instruments which can be difficult to sell when markets are stressed.

This Fund meets the definition of a covered fund under Volcker regulations.

Any losses in the fund will be borne solely by investors in the fund and not by BNY Mellon (including its affiliates); therefore BNY Mellon's losses in the fund will be limited to losses attributable to the ownership interests in the fund held by BNY Mellon and any affiliate in its capacity as an investor in the fund or as beneficiary of a restricted profit interest held by BNY Mellon or any affiliate.

Ownership interests in the fund are not insured by the FDIC, are not deposits, obligations of, or endorsed or guaranteed in any way, by BNY Mellon. Neither BNY Mellon nor any of its controlled affiliates (which includes the fund's general manager/ managing partner/ investment adviser), may directly or indirectly, guarantee, assume, or otherwise insure the obligations or performance of the fund or of any other covered fund in which the fund invests.

Investors should read the fund's offering documents before investing in the fund. Information about the role of BNY Mellon, its controlled affiliates, and their employees in sponsoring or providing services to the fund are described in the Volcker Rule section of the offering documents.

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