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Fitch Ratings has assigned an ‘AAAmmf’ rating to the JPMorgan U.S. Government Money Market Fund managed by J.P. Morgan Investment Management Inc. (JPMIM).
The main drivers that Fitch have assigned to the ‘AAAmmf’ rating include:
-The fund’s investment guidelines mandating overall credit quality, diversification and maturity profile;
-Minimal exposure to interest rate and spread risks;
-The capabilities and resources of J.P. Morgan Investment Management Inc. as investment adviser.
The ‘AAAmmf’ rating reflects Fitch’s opinion of the fund’s “extremely strong capacity to achieve its investment objective” of seeking high current income with liquidity and stability of principal.
Outlining their decision Fitch cited strengths in the fun’s diversification, maturity and liquidity profiles:
CREDIT QUALITY/DIVERSIFICATION.
The fund invests its assets exclusively in securities that are issued or guaranteed by the U.S. government or by U.S. government agencies and instrumentalities (which may bear adjustable rates of interest). In addition, the fund may invest in repurchase agreements collateralized by U.S. Treasury and U.S. Government securities. As of April 25, 2013, the fund had $62.7 billion in assets.
Under normal market conditions, the fund invests in securities rated at least ‘F1’ by Fitch or equivalent or enters into repurchase agreements with counterparties rated at least ‘F1’ or equivalent.
These investment policies are consistent with Fitch’s ‘AAAmmf’ rating criteria.
MATURITY PROFILE.
The fund seeks to manage its market risk exposure by limiting its dollar-weighted average maturity (WAM) and weighted average life to maturity (WAL) to 60 and 120 days, respectively, consistent with Fitch’s ‘AAAmmf’ rating criteria.
LIQUIDITY PROFILE.
The fund’s additional investment restrictions are aimed at maintaining sufficient levels of daily and weekly liquidity to meet investors’ redemption requests. In line with amended Rule 2a-7 under the Investment Company Act of 1940, the fund must invest at least 10% of total assets in daily liquid assets and at least 30% of total assets in weekly liquid assets. As of this rating assignment, the fund fully met these liquidity requirements. In addition, this is consistent with Fitch’s ‘AAAmmf’ rating criteria.
