Goldman Sachs to Publish Daily Values for Its Mutual Funds

Goldman Sachs Group Inc. (GS), the fifth- largest U.S. bank by assets, will begin disclosing the daily net asset value for its U.S. commercial paper money-market funds as regulators are debating an overhaul that would make the vehicles safer for investors.

Goldman Sachs Asset Management expects to expand the daily disclosure next week to money funds that invest in municipal and government debt, the New York-based company said today in a statement. The values of the funds as of 3 p.m. will be disclosed the following day, Goldman Sachs said in an investor update on its website.

“As a leading provider of liquidity solutions, we believe that more frequent disclosure and greater transparency will benefit investors,” Goldman Sachs said in the statement. “This will have no impact to how fund shareholders transact or the way the funds are managed.”

Regulators led by former U.S. Securities and Exchange Commission Chairman Mary Schapiro have worked to impose tighter restrictions on money funds since the September 2008 collapse of the $62.5 billion Reserve Primary Fund. Proposals to make the funds stronger have included abandoning the $1 fixed share price, an idea that providers have said would destroy the appeal of money-market funds.

Photographer: Scott Eells/Bloomberg

Pedestrians pass in front of 200 West Street, which houses the headquarters of Goldman Sachs Group Inc., in New York. Close

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Photographer: Scott Eells/Bloomberg

Pedestrians pass in front of 200 West Street, which houses the headquarters of Goldman Sachs Group Inc., in New York.

Money market funds hold short-term debt securities and book them based on their expected value at maturity. They also round their share prices to the nearest 1 cent. Those practices obscure small fluctuations in the funds’ market values.

‘Shadow’ NAV

Rule changes enacted by the SEC in 2010 required funds to disclose their market value, or “shadow net-asset value,” on a monthly basis, with a 60-day lag. Some providers, including Fidelity Investments and Vanguard Group Inc., opposed the change, saying it could confuse investors.

In the run-up to the rule’s enforcement, some companies, including Charles Schwab Group Inc. and T. Rowe Price Group Inc. (TROW), injected cash into funds that were carrying small losses, to boost their market values back to $1 before they were forced to disclose the shortfalls.

More recently, industry leaders have offered to increase fund disclosure as part of a proposal made to regulators in October. That plan would require funds to disclose shadow NAVs on a weekly basis with a five-day lag.

Goldman Sachs’s asset-management unit manages $856 billion in client money. It is the eighth-biggest provider of money- market funds in the U.S, with $133 billion in such assets as of Nov. 30, according to Crane Data LLC, based in Westborough, Massachusetts.

To contact the reporters on this story: Sree Vidya Bhaktavatsalam in Boston at sbhaktavatsa@bloomberg.net; Christopher Condon in Boston at ccondon4@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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