WILTON, Conn. Commonfund on Oct. 3 launched a new government securities fund, confirmed Keith Luke, managing director.
The fund was introduced in response to news that two of the manager's short-term funds had been frozen to limit withdrawals to endowment and college clients, Mr. Luke said.
The new fund consists solely of U.S. Treasury and government agency securities and cash instruments, Mr. Luke said. It will be benchmarked to the Merrill Lynch 3-Month Treasury Bill index and will have a targeted daily weighted average duration of 45 days. The portfolio will consist primarily of securities with a duration of six months or less.
On Sept. 29, Wachovia announced it would resign at the end of the year as trustee of Commonfund's $9.3 billion short-term fund, causing the firm to restrict client withdrawals to just 10% of their investment. By Sept. 30, investors could withdraw up to 36% of their assets. Clients in the short-term fund should have access to 57% of their investments by the end of the year, according to a letter by President and CEO Verne Sedlacek posted on the firm's website.
Commonfund also decided on Sept. 30 to freeze withdrawals from its $1 billion intermediate term fund, allowing investors access to only 30% of their assets.