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Last week, we listened in on two webinars that addressed the difficulties corporate and money market investors are having in this overly oppressive regulatory and rate environment. GT News, a publication of the Association of Financial Professionals, hosted a free webinar with experts from SSgA offering their insights on cash management strategies. The webinar, "Cash Management in 2015 -- A Trinity of Challenges," was sponsored by SSgA and featured Yeng Butler, Head, US Cash Management as moderator, along with SSgA's Steven Meier, CIO-Global Fixed Income, Cash and Currency, and Tom Connelley, Head, Short Duration Solutions. "In the years since the global financial crisis we have seen sweeping changes in the operating environment for cash," said Butler. "Going into 2015, cash investors are faced with what we refer to as a trinity of challenges -- first, new landmark regulatory reforms, second, historically low interest rates, and finally, a shortage of high quality short-term securities in the market."

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The Investment Company Institute released its 2014 Annual Report earlier this week, which included a recap of a landmark year for money market funds as sweeping reforms were passed by the SEC. The most notable statistic from the report revealed that nearly 80% of U.S. MMF assets will retain a stable net asset value once reforms are implemented in October 2016. This is much higher than current categorizations of "Prime Institutional" due to the new definition of retail funds and marks a major win for the industry. We excerpt the money fund related comments and section below.

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Dave Sylvester, senior portfolio manager and head of money market funds at Wells Fargo Capital Management, will retire on March 31, 2015, capping a 35-year career with the company. Wells Fargo announced the news in a "Product Alert" posted Wednesday afternoon. The Alert says, "We thank Mr. Sylvester for his significant contributions to the success of our money market funds, which he has managed since their inception, and for building a deep and talented investment team. Under Mr. Sylvester's leadership, the Wells Fargo Advantage Money Market Funds have consistently provided a stable investment option for investor assets through innumerable credit cycles, some of which were the most challenging of the modern era. We have thoroughly enjoyed working with Mr. Sylvester and wish him great success in the future." (Note: Crane Data would like to second these sentiments and thank Dave for his support, assistance and years of service to the money fund industry. We'll miss him!)

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The Investment Company Institute released its "Money Market Fund Holdings" report for October, which summarizes the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds (as of Oct. 31, 2014). ICI's "Prime and Government Money Market Funds' Daily and Weekly Liquid Assets" table shows Prime Money Market Funds' Daily liquid assets at 26.4% as of October 31, 2014, up from 25.4% on September 30. Daily liquid assets were made up of: "All securities maturing within 1 day," which totaled 22.3% (vs. 21.4% last month) and "Other treasury securities," which added 4.1% (up from 4.0% last month). Prime funds' Weekly liquid assets totaled 38.4% (vs. 37.3% last month), which was made up of "All securities maturing within 5 days" (33.5% vs. 31.5% in September), Other treasury securities (4.1% vs. 4.0% in September), and Other agency securities (0.9% vs. 1.9% a month ago). (See also Crane Data's Nov. 12 News, "Nov. Port. Holdings Show Spike in Time Deposits, CP; Drop in Repo.")

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Last week we reported on the Federal Reserve Bank of New York's decision to expand its list of Reverse Repo counterparties. (See Crane Data's Nov. 13 News, "New York Federal Reserve Looks to Expand RRP Repo Counterparties".) Since then, several money market strategists have also offered their take, explaining how the involvement of Government Sponsored Entities, particularly the Federal Home Loan Banks (FHLBs) could impact the Fed funds and repo rates. (We noted that all of the 25 largest money fund managers are already counterparties, with the exceptions of: Franklin, American Funds, SEI, HSBC and Reich & Tang.)

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Along with the Prime Institutional sector, Tax-Exempt institutional money funds stand to be the most impacted by the SEC Money Market Fund Reforms as they will also be required to have a floating net asset value. We take a closer look at the current state of Tax-Exempt MMFs, or "munis," and feature expert commentary on the sector from Colleen Meehan, senior portfolio manager at Dreyfus. "The tax-exempt note market continues to experience strong demand for securities issued by municipalities. Issuance continues to decline as issuers' need for short-term financing has decreased as tax receipts continue to remain strong and have supported better financial conditions for many municipalities. The yields on newly issued money-market-eligible securities continue to post historical low levels. The one-year note index is 0.14%," writes Meehan in her "Tax Exempt Money Market Commentary for November, 2014." (Note: Meehan and Dreyfus' Rebecca Glen are scheduled to speak at our upcoming Crane's Money Fund University, Jan. 22-23, 2015, in Stamford, Conn. on "Instruments of the Money Markets: Tax-Exempt Securities, VRDNs, TOBs & Muni Bonds.")

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In its European MMF Quarterly report, Fitch Ratings says, "Euro-denominated money market funds are moving closer to negative yields, on average, as declining short-term market rates have turned negative for most high quality money market issuers." We excerpt from their release below, and we also look at assets, yields and fund changes in Crane Data's latest Money Fund Intelligence International and our the latest MFI International Money Fund Portfolio Holdings data. (Note: Our MFI International products track USD, Euro and Sterling money funds domiciled in Dublin and Luxembourg. Crane Data will be releasing its latest "offshore" money fund holdings data later today.)

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Wanted: Counterparties to participate in the Federal Reserve Bank of New York's Reverse Repo Program. That was the message sent out by the NY Fed yesterday in a "Statement Regarding Reverse Repurchase Transaction Counterparty Applications." The statement reads: "Effective today, the New York Fed is accepting applications from firms interested in becoming a counterparty eligible to participate in RRP transactions with the New York Fed. The RRP counterparty eligibility criteria for all entity types (banks, government-sponsored enterprises, and money market funds) have substantially remained the same as those announced on August 16, 2012. Applications for banks and government-sponsored enterprises are due on November 24, 2014. For money funds, part I of the application is due on November 24, 2014 and part II is due on December 8, 2014." This represents the second expansion of the RRP program in as many weeks (see Oct. 30 "Link of the Day," "NY Fed to Test Other Rates on RRP, Offer Additional $‚Äč300 Billion in Term Repo") following a previous period of restraint and warnings from Fed officials.

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Crane Data released its November Money Fund Portfolio Holdings yesterday, and our latest collection of taxable money market securities, with data as of Oct. 31, 2014, shows jumps in Other (Time Deposits), Commercial Paper, and CDs, and a big drop in (Fed) Repo. Money market securities held by Taxable U.S. money funds overall (those tracked by Crane Data) increased by $4.2 billion in October to $2.439 trillion. Portfolio assets increased by $42.4 billion in September and $28.2 billion in August, after decreasing by $6.2 billion in July and $18.0 billion in June. CDs became the largest portfolio composition segment among taxable money funds, once again surpassing Repos. In third were Treasuries, just ahead of CP. These were followed by Agencies, Other (Time Deposits), and VRDNs. Money funds' European-affiliated holdings increased sharply to 28.1% up from 22.1% last month. Below, we review our latest Money Fund Portfolio Holdings statistics.

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Crane Data published its latest Money Fund Intelligence Family & Global Rankings Tuesday, which rank the asset totals and market share of managers of money market mutual funds in the U.S. and globally. The November edition, with data as of October 31, shows asset increases for about half of money fund complexes in the latest month, as well as modest gains over the past three months. After a sizable increase in overall assets in September, assets flattened out in October, increasing only slightly. Over the last 12 months, assets overall are relatively flat, down 1.4%. Below, we review the latest market share changes and figures. (These "Family" rankings are available to our Money Fund Wisdom subscribers.)

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"Never have so many worked so hard for so little," said Crane Data President Peter Crane, talking about corporate treasurer's cash investing and near-zero interest rates last week at a Bank of America luncheon accompanying the AFP Annual Conference in Washington. The event, normally the largest gathering of treasury professionals, attracts almost every provider of institutional money market funds and cash investing services, and always sparks a rash of discussions on issues facing the largest corporations. Below, we review and excerpt from several articles and reports on the cash conundrum impacting corporate treasurers. Not only is there uncertainty with money market funds, but bank deposits are also facing their own regulatory challenges, leaving treasurers wondering what to do with their cash.

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The November issue of Crane Data's Money Fund Intelligence was sent out to subscribers Friday morning. The latest edition of our flagship monthly newsletter features the articles: "Assets Up 3rd Straight Month; New Products for New Rules?," a look at recent MMF fund flows and the post-reform product landscape; "Invesco's Katz on Adapting to a Changing Liquidity Market," an interview with Invesco's Head of Global Liquidity, Lu Ann Katz; and, "Ultra-Short Bond Funds Attracting Interest, Not Assets," which explores trends and looks at the largest funds in the ultra-short bond fund universe. We also updated our Money Fund Wisdom database query system with October 31, 2014, performance statistics, and sent out our MFI XLS spreadsheet early this morning. (MFI, MFI XLS and our Crane Index products are available to subscribers via our Content center.) Our October Money Fund Portfolio Holdings are scheduled to go out on Tuesday, Nov. 11.

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