SMBC Nikko Closes Euro Money Fund as Rates Hold at Record Lows

SMBC Nikko Securities Inc., the investment banking unit of Sumitomo Mitsui Financial Group Inc. (8316), said it will close its euro-denominated money market fund as interest rates hold at record lows in Europe.

Shareholders have until Dec. 6 to redeem their investment in the fund, which opened in 1996, SMBC Nikko said in a statement without providing details. The Tokyo-based firm is closing the fund because of pressure on short-term euro financial markets.

The European Central Bank lowered its benchmark rates to record lows in July and hasn’t ruled out further cuts amid slowing euro-region economic growth.

SMBC Nikko’s withdrawal follows Daiwa Europe Fund Managers Ireland Ltd.’s Sept. 3 announcement to permanently close its euro fund by the end of October “due to continuing low interest rates.”

SMBC Nikko’s euro fund has about 27.7 billion yen ($355 million) of assets under management, while Daiwa’s fund holdings total about 16.7 billion yen, Reuters reported earlier today.

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