Standard & Poor’s Ratings Services said today that it assigned its highest principal stability fund rating of ‘AAAm‘ to Aviva Investors Sterling Liquidity Fund and Aviva Investors Sterling Government Liquidity Fund, two money market funds pertaining to the same Dublin-domiciled umbrella fund, Aviva Investors Liquidity Funds PLC.
The ‘AAAm’ rating assigned to Aviva Investors Sterling Liquidity and Aviva Investors Sterling Government Liquidity subfunds reflects their extremely strong capacity to maintain principal stability and to limit exposure to principal losses due to credit, market, and/or liquidity risks.
The two subfunds are managed by Aviva Investors Global Services Ltd. and are targeted at institutional investors. They offer a variable net asset value (VNAV), which means that the net asset value (NAV) of these funds is calculated daily based on market prices. To further safeguard their VNAV, the funds are managed so their weighted average maturity never exceeds 60 days to maximize liquidity and diminish the funds’ sensitivity to changing interest rates. The two funds will maintain strong credit quality standards by investing all of their assets in securities and, or with, counterparties rated at least ‘A-1’ by Standard & Poor’s.
The aim of Aviva Investors Sterling Liquidity Fund, which was launched in 2002, is to maximize current income consistently with the preservation of capital and liquidity by investing in a diversified portfolio of high grade, sterling-denominated short-term debt. To achieve its investment objective, the subfunds invest in certificates of deposit, commercial papers, asset-backed commercial papers, and reverse repurchase agreements backed by U.K. gilts.
The Aviva Sterling Government Liquidity Fund, which was launched in December 2008, aims to provide security of capital with a high degree of liquidity and generate income primarily from short-term instruments issued by government or government agencies. To achieve a performance benchmarked against the London Interbank Bid Rate, the subfund invests directly in reverse repurchase agreements backed by U.K. government debt with a maximum maturity of 10 years, with counterparties rated at least ‘A-1’ by Standard & Poor’s, and in U.K. treasury bills.
The two money market funds are managed by Aviva Investors Global Services Ltd., wholly owned by Aviva PLC (A/Negative/–), and had GBP220 billion assets under management as on June 30, 2009, across a wide range of asset classes, including GBP16 billion in cash assets. Aviva’s money market fund team, based in London, operates under strict investment guidelines and a comprehensive risk framework to meet the rated funds’ objectives.
The administration responsibilities of the two funds have been delegated to PNC Global Investment Servicing (Europe) Ltd. PNC International Bank Ltd. acts as the custodian for the two funds. Both entities are fully owned by PNC Bank N.A., Pittsburgh, PA (A+/Stable/A-1).
Standard & Poor’s principal stability fund ratings, identifiable by the ‘m’ suffix, are assigned to funds or pools that exhibit stable NAV. Those funds rated ‘AAAm’ exhibit a superior ability to limit exposure to loss and maintain a constant or rising NAV per share at all times. Standard & Poor’s reviews pertinent fund information and portfolio reports on a weekly basis as part of its surveillance process.
