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Are TD Ameritrade Money Market Funds Safe?

td-logo.jpgWhat about other money market funds available to your clients? Is client money safe in those funds?

  • We cannot predict the effects of recent market conditions on any security, including money market mutual funds.
  • However, we can tell you that TD Asset Management USA Funds, Inc., which manages seven money market funds currently available as cash sweep options to TD AMERITRADE clients, can confirm that none of these funds had any exposure to Lehman Brothers Holdings Inc., Merrill Lynch, Washington Mutual or AIG as of Sept. 16, 2008.
  • Over the past several months, the Adviser for these funds has shortened the average maturities of the funds’ holdings and increased the funds’ liquidity. The Adviser believes that these funds are well positioned in light of current market conditions. More information can be found.
  • Please note that TD AMERITRADE does not manage any money market mutual funds. The funds available to clients at TD AMERITRADE are managed by affiliates or other third parties who maintain all decision-making authority for the funds and the management of the assets invested within them.
  • In the midst of this unprecedented, challenging financial services environment, TD AMERITRADE has been vigilant in working with these firms to ensure that its clients’ interests are well-represented and handled appropriately. We will continue to work on our clients’ behalf to help resolve these issues quickly and efficiently.

Do any of the events of the past few weeks affect TD AMERITRADE?

  • Our capital structure and liquidity are strong and stable.
  • It is unfortunate that a number of firms have failed, or have struggled, over the course of the last 18 months as the result of investments tied to the nation’s struggling real estate markets.
  • We do not hold Lehman Brothers, Merrill Lynch, AIG or Washington Mutual directly. We will continue to monitor our exposure as the ramifications of these events throughout the financial sector become clearer. In the meantime, we will continue to work with affected clients.

Does TD AMERITRADE have liquidity issues? Are you at risk to suffer any of the challenges that other financial services firms have suffered this year?

  • TD AMERITRADE’s capital structure and liquidity are strong and stable.
  • TD AMERITRADE has no direct exposure to the U.S. real estate market and the associated complex financial securities that are at the root of this liquidity crisis.
  • In addition, TD AMERITRADE does not take proprietary risk on its balance sheet. Our clear, transparent business model and commitment to conservative fiscal management has helped us avoid the troubles other firms have experienced from investment risks.
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