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

Sept. 7 (Bloomberg) -- SMBC Nikko Securities Inc., the investment banking unit of Sumitomo Mitsui Financial Group Inc., 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.

To contact the reporter on this story: Katie Linsell in London at klinsell@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at parmstrong10@bloomberg.net

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