FinancialWeek: Super-Premium Shares "Big Drop in Money-Market Fees". Following up on Crane Data's July Money Fund Intelligence article "How Low Can Money Fund Expenses Go?", this week's Financial Week writes on the "Big drop in money-market fees". "With corporate finance execs and institutional asset managers shopping around for the best deals on money-market funds, expense ratios are falling to new lows. And a new segment of money-market funds is cropping up as a result, catering to the so-called super-premium end of the market". The article quotes Peter Crane, "As investors use more money funds and become more yield sensitive, the money is getting hotter. And that money moving around is causing a lot of companies that heretofore could bank on their good name or credit quality to ask 'Can we afford to have 20 basis points as our lowest-cost institutional money fund?'." It mentions the recent introduction of Wells Fargo Advantage Cash Inv MM Select and new filings for UBS and State Street funds.
CNNMoney.com's "Safe havens for risky times" says "safe-haven investments are growing more appealing to some analysts, who say the market has gotten ahead of itself and is due for a correction". The article includes a section on "Cash", saying "With the fed funds rate at 5.25 percent, it's fairly easy to find a high-yield savings account paying 5 percent, according to Peter Crane, president of Crane Data, a firm that tracks money market mutual funds and other cash investments.... [E]veryday investors looking to beef up their cash reserves will probably want to opt for money market mutual funds or bank savings accounts".
Blog Cites Crane Data on Fidelity Cash Reserves Topping $100 Billion. Steve Syre's Boston Capital Blog writes "Fidelity money market fund tops $100 billion". The Boston Globe columnist says in a Friday post, "The largest mutual fund at Fidelity Investments doesn't invest in stock or bonds. Fidelity Cash Reserves, the giant money market fund, has been the company's biggest product for some time. Now, Peter Crane of Crane Data reports in this website post that Fidelity Cash Reserves has crossed the $100 billion threshold for assets under management.
"Cash Comeback" Segment on CNBC Closing Bell Interviews Peter Crane. CNBC's Closing Bell with Maria Bartiromo featured a segment entitled "Cash Comeback" with Peter Crane of Crane Data LLC touting the virtues of money markets and Ron Insana, now running a hedge fund (Insana Capital Partners) though still a contributing editor to CNBC, arguing against a large cash buildup. The segment notes the record $2.56 trillion level of money fund asssets and the attractiveness of 5% yields, and also discusses the low levels of cash held by stock funds. Click here to see the video!
"Why the Yield Curve Is Pointing to Cash" in Sunday's New York Times. This Paul Lim "Fundamentally" column, discusses the many reasons why cash and money market funds are attractive. The article also ran Friday in the International Herald Tribune (see yesterday's "Link of the Day") and Sunday in The Oregonian (among others). It quotes Crane Data's Peter Crane, saying the current flat-rate scenario is "the best possible environment to be in cash" since there's almost no "risk that short-term rates will fall through the floor". Lim's piece also cites the close to 3% real (after inflation) return on money funds, the attractiveness of 5% nominal "magic number" rates, and the growing risk of other asset classes moving down in lock-step.
Wall Street Journal Online's "Investments to Soothe a Worried Mind" advocates short-term investment options such as money funds and CDs in a Sunday article. Reporter Jane Kim writes, "Some popular categories of bond mutual funds, including intermediate-term bond funds, are showing negative returns over the past month.... That has prompted some investors to flee to shorter-term investments that fluctuate less in price. The article, which mentions TIAA-CREF Money Fund and Vanguard Prime Money Fund as top-yielders, also says, "Among the most stable and liquid of these [of short-term investments] are money-market funds, mutual funds which hold instruments like short-term Treasury securities and commercial paper. Total assets in money-market funds are at a record $2.54 trillion, up 19.6% over the past year, and the average yield for the 100 largest money funds is 4.98%, according to Crane Data, which tracks money funds".