Core Sweep Money Market Fund Conversion

March 15, 2022    Operations

One of the features in ESI brokerage accounts is the automatic investment of cash balances in a core sweep money market mutual fund.

ESI is changing the core sweep fund utilized in some NFS accounts:

  • For all non-retirement, non-managed brokerage accounts, the Fidelity Government Money Market Fund (SPAXX) will be used.
  • For retirement accounts, there will be no change to the core money market fund. Fidelity Government Cash Reserves (FDRXX) will continue as the core sweep fund.

Under this conversion:

  1. NFS brokerage accounts (non-managed) will convert from FZBXX to SPAXX as the core sweep fund. 
  2. ESI Illuminations and Directions accounts (managed) will be converted from existing core sweep fund positions to SPAXX to the extent that SPAXX is not already the chosen core sweep fund (the majority of managed accounts already hold SPAXX as the core sweep fund). Positions that will be converted to SPAXX in managed accounts are as follows:
  3. Fidelity Government Money Market Fund, Capital Reserves Class (FZAXX)
  4. Fidelity Treasury Money Market Fund Daily Money Class (FDUXX)
  5. Fidelity Treasury Money Market Fund, Capital Reserves Class (FSRXX)

After the conversion, there will be two Core Sweep Funds used for all NFS accounts—SPAXX for all non-retirement accounts and FDRXX for all retirement accounts.  Note that neither fund charges 12b-1 fees to the client.

TIMING OF CHANGE:

  • March 21, 2022, a letter detailing the conversion, a tabular comparison of money market funds and a prospectus for SPAXX will be mailed to affected clients.
  • April 18, 2022, all newly established non-retirement accounts will use SPAXX as the core sweep money market fund.
  • April 25, 2022, shares of FZBXX, FZAXX, FDUXX and FSRXX will be redeemed and proceeds will be invested in SPAXX.

 IMPORTANT ITEMS TO NOTE:

  • Any clients who do not wish to transition to SPAXX can notify ESI Operations, either through their financial representative or directly, within 30 days of receipt of the letter.
  • Any dividends paid on or after April 18, 2022 with respect to holdings in the old core sweep funds will be paid in cash and reinvested in SPAXX.
  • There are no costs associated with the transition. However, should clients accept the transition and later choose to select a new investment option after the 30-day notification  period, accounts may be subject to additional fees.
  • All other features and benefits associated with affected accounts will remain unchanged and are not impacted by this transition.
  • Attached for your reference is a copy of the letter to clients and the required comparison sheet.

(NOTE: Make sure you’re logged into the agent portal before clicking those links!)

QUESTIONS?

Please contact the ESI Service desk with any questions at 1-800-344-7437.

Click Here to Read FN202209: Core Sweep Money Market Fund Conversion in Full

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