In the April edition of our Money Fund Intelligence, we profile Tory Hazard, President and COO of Institutional Cash Distributors. Hazard talks about the growth of ICD, which has expanded beyond money funds to include short-term bond funds, SMAs, private funds, and bank deposit products. He says, "Institutional Prime money funds are still going to be a very important part of the portfolios." Hazard also discusses enhancements to the ICD Portal slated to debut next week to help investors deal with upcoming reforms. He says, "We're extremely excited about 2016 and beyond." (We reprint the MFI article below. For more on ICD's enhancements, see our April 15 News, "Treasury Strategies, Fitch on New Disclosure; ICD Adds Enhancements," or see ICD's press release.")
MFI: Tell us about ICD's history. Hazard: Institutional Cash Distributors, or ICD, was launched in 2003 by Tom Newton (Chairman), Jeff Jellison (CEO, NA), and Ed Baldry (CEO, EMEA). I joined the company in 2009 and currently serve as President and COO. MFI: How much do you distribute? Hazard: We have over $70 billion in assets in the U.S., and about $8 billion offshore. We have approximately 35 fund families on the portal and about 300 funds. That includes money funds, as well as other types of portfolios. When we saw that changes were [proposed] with money fund reform, we were very active in fighting against onerous over-regulation. We were happy when the rules finally came out [that] they included the simplified tax accounting method. That was, as we saw it, the biggest challenge that was going to face prime money market funds. With that [solved], Institutional Prime money market funds are still going to be a very important part of the portfolios.
MFI: What is your best feature? Hazard: For us, the main attraction is the selection of products. Not only do we have all different types of money market funds in one place for efficient trading, we also offer other funds for clients. We have a federally insured cash account -- several clients are invested in that. You can invest [via] the portal and it flows all the way through to our reporting and our "Transparency Plus." Also, we have several clients that are invested in short duration bond funds that are looking to pick up a little yield, especially in Europe, to offset the [negative yields] that they've been [experiencing]. And we have clients that are invested in SMAs through ICD and, again, those positions are put into the Transparency Plus risk analytics.
Then, through our relationship with Tradeweb, you can purchase Time Deposits through [their] platform, and that is integrated into ICD. So selection is a big part of it. We knew that our clients wanted additional products, so that's what we were focused on over the last year and a half. We're also focused on providing the best VNAV solutions. We'll be able to show throughout the portal various ways to use the new information that is being reported so that our clients can make great decisions -- not only on the right products to purchase, but to do so in a way that is efficient and streamlined for them.
MFI: What are some other attractions? Hazard: A second major benefit would be the streamlined nature of how ICD delivers its product. More than 100 of our clients have integration into 10 different treasury workstation [platforms] -- so we work with all the relevant treasury workstations. We also have "auto-pay" technology, which is helpful in some situations with the settlement. If certain parties need that money quicker, the secure automated payment product is available to them to help streamline that process. The other major benefit is our service. We put together a global trading desk. We have desks that operate in London, Boston, and San Francisco.... So it's been a combination of the service we provide, the products we provide -- the technology products as well as the investment products -- and the integration. Also, we have great relationships with our fund companies.
MFI: Are customers ready for reform? Hazard: Ninety five percent of our clients have not made any changes to their lineups. Just a small portion of them have started to make some moves from prime funds into other products, such as these federally insured accounts or government accounts. It's just the uncertainty, I think, that's causing a small amount of them to do that. We've been going on road shows and meeting with clients in various parts of the country.... What we've found is, when they understand the fees and the gates and look at the value of different investment types versus their objectives, they're finding that Prime funds are still at the top of the list. Say it's a 15 basis point [spread] between Government and Prime funds -- in a billion dollar portfolio would leave over $1 million a year on the table.... They also realize that the fund managers are really, for their own viability, going to manage the assets to keep their weekly liquidity well above that 30%. They know that if they are in a position where they need to impose a fee or a gate, they're going to have a lot of trouble competing with the funds that don't.
MFI: Have higher yields restored fees? Hazard: Absolutely. The interest rate hike has helped to restore our margins closer to where we used to be. It's a welcome relief for us, because what we've done over the last several years is we have invested an enormous amount of money in our technology. In doing so, we made the bet that at some point, we would restore fees back to the normal profit margins, and it's been moving in that direction.
MFI: Are investors getting "re-sensitized" to yield? Hazard: If you look at the AFP Liquidity Survey, capital preservation is still the number one goal, with liquidity being number two. Yield is a distant third. But I think yield is a consideration for clients if they can put a portfolio together that has capital preservation and liquidity in mind. If they look at their analytics and their concentrations, there are ways for clients to put portfolios together that will increase yield while reducing risk. We're seeing that happen a lot more. They're looking at how they can optimize their portfolio, which is something that we haven't seen in a long time.
MFI: Tell us about your global investors. Hazard: We offer funds in 8 different currencies for our clients. Some are overseas for strategic reasons and some are overseas because of American tax policy. Each country has its own complexities. In Europe, where banks and money funds have negative yields, we see a lot of clients investing in short duration bond funds to get an overall positive return.
MFI: Are you looking to expand your offerings? Hazard: Absolutely. We have about 20 short duration bond funds on our platform, globally. The way that we've always built out our fund lineup is, if a client requests a particular product or fund, we will go to that fund company and set them up on our platform. We're doing that right now with some of the private funds that are coming on our platform. MFI: Any private funds live on the platform yet? Hazard: Yes.
MFI: What is your outlook for the rest of the year? Hazard: We're extremely excited about 2016 and beyond. We have been working to prepare for this [for some] time. We're getting a little bit of a break on interest rates. Our product lineup is extremely extensive, and we have the VNAV solutions that should lead the industry.... On April 14, we [did] a webinar where we ... showcase[d] the VNAV enhancements to the portal. We're also doing a road show, and we're going to publish a white paper that's going to discuss not only the challenges but the solutions to how corporate treasury is going to trade in this post-regulatory environment.
MFI: How are clients feeling? Are they adjusting to the new reality? Hazard: They actually have become less apprehensive the more they see. We had a road show in Los Angeles last week, [where] we unveiled a lot of the new features that we're including on ICD Portal to help them trade in this new environment. Once they saw the various types of information that they'll be receiving in various different views, they have gotten a lot more comfortable with the October reform requirements and time frame. We've been talking with our clients from the beginning and getting their input on these money market fund reform enhancements in the portal. So they've seen the development over the course of the last six months and we've shared the results with some of our clients. (Contact us to request the full interview in the latest issue of Money Fund Intelligence.)
Crane Data released its March Money Fund Portfolio Holdings yesterday, and our latest collection of taxable money market securities, with data as of Feb. 29, 2016, shows increases in Treasuries, Other (Time Deposits), CDs, Agencies, and Repo. The only sectors that were down were CP and VRDNs. Money market securities held by Taxable U.S. money funds overall (tracked by Crane Data) increased by $64.2 billion in February to $2.676 trillion. MMF holdings increased by $6.0 billion in January, but decreased by $2.2 billion in December. Repos remained the largest portfolio segment, followed by Treasuries and Agencies. CDs were in fourth place, followed by Commercial Paper, Other (mainly Time Deposits) securities and VRDNs. Money funds' European-affiliated securities represented 27.6% of holdings, up slightly from the previous month's 27.0%. Below, we review our latest Money Fund Portfolio Holdings statistics.
Among all taxable money funds, Repurchase Agreements (repo) increased $4.4 billion (0.8%) to $558.3 billion, or 20.9%, after decreasing $182.2 billion in January and increasing $176.6 billion in December. Treasury securities had the biggest increase, rising $40.9 billion (8.2%) in February to $538.2 billion, or 20.1% of holdings, after falling $3.4 billion in January and $33.2 billion in December. Government Agency Debt increased $5.5 billion (1.1%) to $496.8 billion, or 18.6% of holdings, after increasing $7.5 billion in January and $35 billion in December. The steady rise in Treasuries and Agencies has been driven by the conversion of about $190 billion (so far) of Prime fund assets to Government funds.
Certificates of Deposit (CDs) were up $7.6 billion (1.6%) to $472.5 billion, or 17.7% of holdings, after rising $33.0 billion in January and decreasing $51.8 billion in December. Commercial Paper (CP) was down $1.8 billion (0.5%) to $355.8 billion, or 13.3% of taxable assets, while Other holdings, primarily Time Deposits, jumped $8.1 billion (3.5%) to $239.4 billion, or 8.9% of holdings. VRDNs held by taxable funds decreased by $500 million (3.4%) to $15.2 billion (0.6% of assets).
Among Prime money funds, CDs represent just under one-third of holdings at 32.9% (up from 31.0% a month ago), followed by Commercial Paper at 24.7% (down from 26.6%). The CP totals are primarily Financial Company CP (14.5% of total holdings), with Asset-Backed CP making up 6.2% and Other CP (non-financial) making up 4.0%. Prime funds also hold 6.4% in Agencies (down from 7.2%), 5.9% in Treasury Debt (up from 5.2%), 3.3% in Treasury Repo (down from 3.6%), 4.8% in Other Instruments, 5.1% in Other Instruments (Time Deposits), and 6.3% in Other Notes. Prime money fund holdings tracked by Crane Data total $1.439 trillion (up from $1.427 trillion last month), or 53.8% of taxable money fund holdings' total of $2.676 trillion.
Government fund portfolio assets totaled $704 billion, up from $683 billion in January, while Treasury money fund assets totaled $533 billion, up from $502 billion in January. Government money fund portfolios were made up of 57.4% Agency Debt, 20.7% Government Agency Repo, 8.4% Treasury debt, and 13.3% in Treasury Repo. Treasury money funds were comprised of 74.1% Treasury debt, 25.2% in Treasury Repo, and 0.7% in Government agency, repo and investment company shares. Government and Treasury funds combined total $1.237 trillion, or 46.2% of all taxable money fund assets.
European-affiliated holdings rose $34.7 billion in February to $739.0 billion among all taxable funds (and including repos); their share of holdings increased to 27.6% from 27.0% the previous month. Eurozone-affiliated holdings increased $24.5 billion to $436.7 billion in February; they now account for 16.3% of overall taxable money fund holdings. Asia & Pacific related holdings decreased by $11.3 billion to $274.6 billion (10.3% of the total). Americas related holdings increased $39.0 billion to $1.658 trillion and now represent 62.0% of holdings.
The overall taxable fund Repo totals were made up of: Treasury Repurchase Agreements, which dropped $9.0 billion, or 3.2%, to $275.2 billion, or 10.3% of assets; Government Agency Repurchase Agreements (up $9.5 billion to $211.1 billion, or 7.9% of total holdings), and Other Repurchase Agreements ($71.9 billion, or 2.7% of holdings, up $3.9 billion from last month). The Commercial Paper totals were comprised of Financial Company Commercial Paper (up $500 million to $209.1 billion, or 7.8% of assets), Asset Backed Commercial Paper (down $3.5 billion to $89.7 billion, or 3.4%), and Other Commercial Paper (up $1.2 billion to $57.0 billion, or 2.1%).
The 20 largest Issuers to taxable money market funds as of Feb. 29, 2016, include: the US Treasury ($438.2 billion, or 20.1%), Federal Home Loan Bank ($349.3B, 13.1%), Wells Fargo ($88.3B, 3.3%), BNP Paribas ($83.0B, 3.1%), Credit Agricole ($81.0B, 3.0%), Federal Reserve Bank of New York ($68.6B, 2.6%), Federal Home Loan Mortgage Co. ($62.0B, 2.3%), Societe Generale ($59.9, 2.2%), RBC ($59.2B, 2.2%), Bank of Tokyo-Mitsubishi UFJ Ltd ($56.7B, 2.1%), Bank of Nova Scotia ($55.7B, 2.1%), Federal Farm Credit Bank ($50.7B, 1.9%), JP Morgan ($50.7B, 1.9%), Bank of America ($46.5B, 1.7%), Credit Suisse ($45.6, 1.7%), Natixis ($44.8B, 1.7%), HSBC ($39.3B, 1.5%), DnB NOR Bank ASA ($39.0B, 1.5%), Citi ($37.8B, 1.4%), and Sumitomo Mitsui Banking Co ($36.6B, 1.4%).
In the repo space, the Federal Reserve Bank of New York's RPP program issuance (held by MMFs) remained the largest repo program with $68.6B, or 12.3% of money fund repo. The 10 largest Fed Repo positions among MMFs on 2/29 include: Fidelity Govt Cash Reserves ($27.6B in Fed RRP), Goldman Sachs FS Govt ($22.6B), JP Morgan US Govt ($20.4B), Morgan Stanley Inst Lq Res ($18.3B), Federated Govt Oblg ($16.4B), Federated Trs Oblig ($14.7B), Fidelity Govt MM ($14.0B), Wells Fargo Govt MMkt ($13.6B), Morgan Stanley Inst Lq Trs ($13.3B), and Northern Trust Trs MMkt ($13.0B).
The 10 largest Repo issuers (dealers) with the amount of repo outstanding and market share among the money funds we track) include: Federal Reserve Bank of New York ($68.6B, 12.3%), Wells Fargo ($56.2B, 10.1%), BNP Paribas ($50.8B, 9.1%), Societe Generale ($48.2B, 8.6%), Credit Agricole ($37.6B, 6.7%), Bank of America ($35.6B, 6.4%), Credit Suisse ($30.6B, 5.5%), JP Morgan ($28.9B, 5.2%), RBC ($23.4B, 4.2%), and Bank of Nova Scotia ($22.7B, 4.1%).
The 10 largest issuers of "credit" -- CDs, CP and Other securities (including Time Deposits and Notes) combined -- include: Credit Agricole ($43.4B, 4.6%), Bank of Tokyo-Mitsubishi UFJ Ltd ($43.2B, 4.5%), DnB NOR Bank ASA ($39.0B, 4.1%), Sumitomo Mitsui Banking Co ($36.6B, 3.9%), RBC ($35.8B, 3.8%), Bank of Nova Scotia ($33.0B, 3.5%), Natixis ($32.9B, 3.5%), BNP Paribas ($32.1B, 3.4%), Wells Fargo ($32.1B, 3.4%), and Skandinaviska Enskilda Banken AB ($30.5B, 3.2%).
The 10 largest CD issuers include: Bank of Tokyo-Mitsubishi UFJ Ltd ($29.7B, 6.4%), Sumitomo Mitsui Banking Co ($28.0B, 6.0%), Toronto-Dominion Bank ($25.4B, 5.4%), Wells Fargo ($25.0B, 5.4%), Canadian Imperial Bank of Commerce ($23.7B, 5.1%), Bank of Nova Scotia ($21.6B, 4.6%), Mizuho Corporate Bank Ltd ($20.3B, 4.3%), Bank of Montreal ($19.7B, 4.2%), Sumitomo Mitsui Trust Bank ($18.5B, 4.0%), and RBC ($17.3B, 3.7%).
The 10 largest CP issuers (we include affiliated ABCP programs) include: BNP Paribas ($17.4B, 5.7%), JP Morgan ($17.1B, 5.6%), Commonwealth Bank of Australia ($16.0B, 5.3%), RBC ($15.2B, 5.2%), HSBC ($12.7B, 4.2%), Westpac Banking Co ($12.4B, 4.1%), Bank of Tokyo-Mitsubishi UFJ Ltd ($10.9B, 3.6%), Bank of Nova Scotia ($10.4B, 3.4%), Credit Agricole ($10.1B, 3.3%), and ING Bank ($9.3B, 3.1%).
The largest increases among Issuers include: US Treasury (up $40.9B to $538.2B), Wells Fargo (up $9.4B to $88.3B), Natixis (up $8.7B to $44.8B), Canadian Imperial Bank of Commerce (up $8.4B to $29.1B), Federal Home Loan Bank (up $8.2B to $349.3B), DnB NOR Bank ASA (up $5.7B to $39.0B), Credit Agricole (up $5.0B to $81.0B), Societe Generale (up $4.8B to $59.9B), Bank of Nova Scotia (up $4.5B to $55.7B), and Swedbank AB (up $4.2B to $28.0B).
The largest decreases among Issuers of money market securities (including Repo) in February were shown by: Federal Reserve Bank of New York (down $26.6B to $68.6B), Federal Home Loan Mortgage Co. (down $5.1B to $62.0B), State Street (down $4.7B to $11.6B), Nordea Bank (down $4.5B to $20.2B), Sumitomo Mitsui Banking Co. (down $3.9B to $36.6B), Toronto-Dominion Bank (down $3.7B to $36.5B), Barclays PLC (down $3.4B to $17.7B), Svenska Handelsbanken (down $3.2B to $27.0B), Credit Mutuel (down $2.9B to $20.0B), and Goldman Sachs (down $2.3B to $10.1B).
The United States remained the largest segment of country-affiliations; it represents 53.3% of holdings, or $1.425 trillion (down $29.0B). France remained in second (11.3%, $302.5B), followed by Canada (8.6%, $231.2B) in third. Japan (6.6%, $176.0B) stayed in fourth, while Sweden (4.0%, $105.9B) held fifth. The United Kingdom (3.4%, $91.0B) remained sixth, while Australia (2.9%, $76.5B) stayed in seventh. The Netherlands (2.4%, $65.1B), Switzerland (2.3%, $62.1B), and Germany (2.0%, $52.1B) round out the top 10 among country affiliations. (Note: Crane Data attributes Treasury and Government repo to the dealer's parent country of origin, though money funds themselves "look-through" and consider these U.S. government securities. All money market securities must be U.S. dollar-denominated.)
As of Feb. 29, 2016, Taxable money funds held 29.4% (up from 27.9%) of their assets in securities maturing Overnight, and another 12.0% maturing in 2-7 days (down from 13.5%). Thus, 41.4% in total matures in 1-7 days. Another 20.6% matures in 8-30 days, while 12.5% matures in 31-60 days. Note that about three-quarters, or 74.5% of securities, mature in 60 days or less, the dividing line for use of amortized cost accounting under the new pending SEC regulations. The next bucket, 61-90 days, holds 10.5% of taxable securities, while 12.8% matures in 91-180 days, and just 2.2% matures beyond 180 days.
Crane Data's Taxable MF Portfolio Holdings (and Money Fund Portfolio Laboratory) were updated Wednesday, and our Tax Exempt MF Holdings and MFI International "offshore" Portfolio Holdings will be released Friday and Monday, respectively. Visit our Content center to download files or visit our Portfolio Laboratory to access our "transparency" module. Contact us if you'd like to see a sample of our latest Portfolio Holdings Reports.
The March issue of our flagship Money Fund Intelligence newsletter was sent to subscribers Monday morning. It features the articles: "Exodus: Prime & Tax-Exempt MMFs Liquidate En Masse," which reports on the most recent rash of fund conversions and liquidations; "UBS Asset Management's Abed & Sabatino on MMFs," where we profile Joe Abed and Rob Sabatino from UBS; and "Tweaks Keep Coming: JPM, Wells, BlackRock, Dreyfus," which looks at more lineup shuffles and announcements from fund groups. We have also updated our Money Fund Wisdom database query system with Feb. 29, 2016, performance statistics, and sent out our MFI XLS spreadsheet Monday morning. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our February Money Fund Portfolio Holdings are scheduled to ship Wednesday, March 9, and our March Bond Fund Intelligence is scheduled to go out Monday, March 14.
MFI's lead article on the "Exodus," says, "We've documented the massive shift from Prime to Government funds, but the latest fallout from the SEC's MMF reforms is widespread fund liquidations. February was another busy month for both liquidations, especially Tax-Exempt MMFs, and fund conversions. This month's wave of Prime to Government declarations brings our total to $272.0 billion in MMFs "going Government" ($172.4 billion of this has converted to date). The new moves come from BBH, Invesco, MassMutual, PIMCO, PNC, and UBS."
The piece explains, "Among the most recent Prime to Govt conversion announcements, the $1.8 billion BBH Money Market Fund filed to convert to BBH US Govt MMF on April 1. (See our Feb. 16 News.) The $441 million MassMutual Premier MMF will change into MassMutual US Govt Premier MMF on May 1. (See our Feb. 11 Link of the Day.)"
It adds, "Crane Data's Pete Crane tells Fund Action, "For most of these small providers that have under $1bn and use their money fund just as a convenience for their clients, it's a no brainer.... The costs of converting to prime are substantial with the systems issues of dealing with a floating NAV, if they're institutional, or the gates and fees if they're retail or institutional. It's a pain for the systems. Their boards of directors don't want the responsibility of the gates and fees even though it's unlikely to happen."
Our UBS Profile reads, "This month, Money Fund Intelligence profiles the leaders of the money market fund team at UBS Asset Management, Joe Abed, Global Head of Distribution for Liquidity Management, and Rob Sabatino, Global Head of Liquidity Portfolio Management. They discuss how UBS is tackling the changing money fund environment, expanding its fund offerings and increasing its resources. Says Abed, "We're not just committed to the liquidity business, we're growing both our fund family and our distribution and investment team globally."
Responding to the question: What is your top priority right now? Abed says, "[It is] assuring that our menu of offerings continues to meet the needs of our clients -- both in the U.S., with the changes in money market fund regulations, and globally, to serve the liquidity needs of our clients around the world.... And we're adjusting other funds to ensure we continue to serve all of our clients. Outside the U.S. we have an equally long history in the money fund business.... Last year we expanded our fund range, launching additional CNAV, short term money market funds in Euro and Sterling to sit alongside our existing short term US Dollar money market fund. We see a significant opportunity to grow our business outside the U.S., and under the leadership of James Finch, we will continue to expand our liquidity distribution team in Europe."
The "Tweaks Keep Coming" article says, "In addition to the myriad Prime to Govt conversions and fund liquidations (see our lead story), there were a number of other money fund lineup tweaks and changes announced over the past month. Among the most notable, both JP Morgan Asset Management and Wells Fargo Funds revealed multiple strike times for their Prime Inst floating NAV funds, the first managers to declare intraday pricing details. Also, we report new details on the BofA Funds/BlackRock merger, and the latest lineup tweaks by Dreyfus."
We also discuss in a sidebar, "Negative Rates in the News." It says, "Michael Cloherty, Head of US Rates Strategy at RBC Capital Markets, asks, "Why is everyone talking about negative rates? We think this all stems from the Fed's 2016 bank stress tests and the Street echo chamber." We provide an overview of IMMFA's stance on European MMF reforms in the sidebar, "IMMFA on European Regs." Finally, as we do every month, we also review all the important "Money fund News."
Our March MFI XLS, with Feb. 29, 2016, data, shows total assets increasing $37.4 billion in February to $2.698 trillion, after decreasing $22.4 billion in January, increasing $44.2 billion in December, rising $3.5 billion in November, and jumping $56.5 billion in October. Our broad Crane Money Fund Average 7-Day Yield climbed by 2 bps to 0.11% for the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) increased 3 basis points to 0.21% (7-day).
On a Gross Yield Basis (before expenses were taken out), funds averaged 0.38% (Crane MFA, up 8 basis points) and 0.44% (Crane 100, up 7 bps). Charged Expenses averaged 0.27% (up 6 bps) and 0.24% (up 5 bps) for the Crane MFA and Crane 100, respectively. The average WAM (weighted average maturity) for the Crane MFA was 37 days (up 2 days from last month) and for the Crane 100 was 37 days (up 1 day). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
The preliminary agenda is available and registrations are now being taken for Crane's Money Fund Symposium, which will take place June 22-24, 2016 at The Philadelphia Marriott, in Philadelphia, Pa. Money Fund Symposium is the largest gathering of money market fund managers and cash investors in the world. Last summer's event in Minneapolis attracted a record 505 attendees, and we expect yet another robust turnout for our 8th annual event in Philadelphia this June. (Symposium participants include money fund managers, marketers and servicers, cash investors, money market securities dealers, issuers, and regulators.) Visit the MF Symposium website (www.moneyfundsymposium.com) for more details. Registration for attendees is $750, and discounted hotel reservations are also now available. We review the agenda and conference details below. (E-mail us at firstname.lastname@example.org to request the full brochure or click here.) We also excerpt some comments from yesterday's speech by the New York Fed's Simon Potter, who briefly mentioned money funds.
Symposium's June 22 Opening (afternoon) Agenda kicks off with a "Welcome to Money Fund Symposium 2016" by Peter Crane, President & Publisher of Crane Data. Next, we've scheduled BlackRock to present our keynote discussion on "The New Look of Money Market Funds." (We just learned that CEO Larry Fink, who was originally invited, can't make it. So watch for this slot to be revised soon.) The rest of the Day One agenda includes: "Strategists Speak '16: Repo, Rates and Regs," with Mark Cabana of Bank of America Merrill Lynch, Joseph Abate of Barclays, and Rob Zambarana of Guggenheim Securities; "Enhanced Cash and Ultra-Short Bond Funds," moderated by J.P. Morgan Securities' Alex Roever, and featuring Dave Fishman of Goldman Sachs Asset Management and Michael Morin of Fidelity Investments; and , "Major Money Fund Issues 2016," moderated by Peter Crane and featuring Charlie Cardona of BNY Mellon Cash Investment Strategies, John Donohue of J.P. Morgan AM, and Roger Merritt of Fitch Ratings. (The opening evening's reception will be sponsored by Bank of America Merrill Lynch.)
Day 2 of Money Fund Symposium 2016 begins with "Treasury Update: Supply, FRNs, and Stability Issues, with John Dolan of the U.S. Treasury. The rest of Day Two features: "Senior Portfolio Manager Perspectives," moderated by Frank Dugan of Barclays, and including Laurie Brignac of Invesco, Tim Huyck of Fidelity, and `Peter Yi of Northern Trust; "Government and Treasury Money Fund Issues," moderated by Garrett Sloan of Wells Fargo Securities, and featuring Mike Bird of Wells Fargo Funds, and Rob Sabatino of UBS Global AM; "Muni & Tax Exempt Money Fund issues" with Justin Schwartz of Vanguard, and John Vetter of Fidelity.
The Afternoon of Day 2 (after a Dreyfus-sponsored lunch) features: "Dealer Roundtable: Supply and New Products," with Stewart Cutler of Barclays, John Kodweis of J.P. Morgan Securities, and Jean-Luc Sinniger of Citi Global Markets; "Portal Panel: Transparency and Direct Investments," moderated by Ryan Kipp of Cachematrix and featuring Greg Fortuna of State Street's Fund Connect, Tony Hazard of ICD, and Steve Kraus of FIS Global; "MMF Issues in Europe and in Asia," with Reyer Kooy of IMMFA, Jonathan Curry of HSBC Global AM, and Dan Morrissey of William Fry; and "Investor Issues: Corporate, Brokerage Sweeps" with Tony Carfang of Treasury Strategies, Tom Hunt of the AFP, and Sunil Kothapalli of Wells Fargo Advisors. (The Day 2 reception is sponsored by Barclays.)
The third day of Symposium features: "State of the Money Fund Industry" with Peter Crane, Deborah Cunningham of Federated Investors, and Alex Roever of J.P. Morgan Securities; "Money Fund Reforms: Outstanding Issues," moderated by Joan Swirsky of Stradley Ronon and featuring Jane Heinrichs of the Investment Company Institute, Sarah ten Siethoff of the U.S. Securities & Exchange Commission, and Jack Murphy of Dechert LLP; "Reform Issues: Credit Ratings, Floating NAVs" with Jimmie Irby of JPMAM and Charles Hawkins of BNY Mellon Asset Servicing. Finally, the last session is entitled, "Money Fund Data, Statistics, and Software," with Peter Crane presenting on the latest money fund information tools.
We hope you'll join us in Philadelphia this June! (We'd also like to encourage attendees, speakers and sponsors to register and make hotel reservations early.) In other conference news, Crane's 4th annual "offshore" money fund event, European Money Fund Symposium, will be held in London, England, September 20-21, 2016. This website (www.euromfs.com) will be live soon. (Contact us to inquire about sponsoring or speaking.) Our next Money Fund University "basic training" event is tentatively scheduled for Jan. 19-20, 2017, in Jersey City. Finally, the date and location for our inaugural Bond Fund Symposium are set –- it will be held March 23-24, 2017 in Boston. Watch www.cranedata.com in coming months for more details on these events.
In other news, Simon Potter, the executive vice president of the New York Federal Reserve, spoke Monday on "Money Markets after Liftoff: Assessment to Date and the Road Ahead." Potter discussed the Fed's RRP program, saying, "[T]he Federal Reserve instead pursued offering an overnight investment opportunity that could, with sufficient capacity, intensify competition in money markets and, without necessarily draining reserves, enhance the transmission of IOR into other overnight money market rates. This approach entailed a twist on a traditional Federal Reserve tool, reverse repos: Instead of running quantity-based, term operations aimed at altering reserve levels, the Desk would run interest-rate-based overnight operations aimed directly at influencing market rates.... To summarize my conclusion about the performance of the operating framework to date: I am extremely pleased with what we've seen so far."
He adds, "We have learned a lot about the structure of our operations from our experience with liftoff.... Let's begin with quantifying the aggregate capacity limit.... [T]he ON RRP is currently being run with an aggregate capacity limit of around $2 trillion, which is far in excess of typical daily demand and well above the $300 billion capacity limit the facility had had since September 2014. As the FOMC made clear in the minutes to its March 2015 meeting, this elevated capacity was intended to ensure a smooth liftoff, but the absence of an aggregate cap is only temporary. This is why the recent January minutes included a discussion of when and how it will be appropriate to reinstate an aggregate cap."
Potter continues, "So, what have we learned about the appropriate level of the cap? It seems likely that having a very elevated aggregate capacity was helpful in controlling market rates initially, perhaps because it showed the FOMC's commitment to achieving interest rate control, but it's unclear exactly how much available capacity, or "headroom," is needed to maintain such control. `Our recent experience suggests that having reasonably high aggregate capacity can help improve control without necessarily encouraging greater use of the facility.... This means that they might accept relatively low rates in money markets.... So, having a high capacity could actually reduce ON RRP take-up."
Finally, he explains, "We are also paying close attention to developments in the money market mutual fund industry and their potential impact on policy implementation The Securities and Exchange Commission recently announced new regulations for these funds aimed at enhancing financial stability. One important feature of these new rules is that government-only money funds receive different regulatory treatment than prime funds, possibly making government-only funds more attractive for some institutional investors. If the assets under management in government-only money funds were to grow significantly, that could put upward pressure on ON RRP take-up, since most fund managers consider the facility to be a government investment. As I noted earlier, we would not want to see growth in government-only money funds if it were predicated on a mistaken impression that ON RRP would be around indefinitely and with high capacity. Also, if assets under management in prime funds were to decline sharply, this could possibly lead to less efficient transmission of monetary policy."
Footnote 49 in the speech's transcript notes, "Assets under management in government-only funds could grow two ways: Prime funds could convert into government-only funds, or prime fund investors could transfer their money into government funds. Most prime funds have announced their intentions at this point, and among those that have converted to government funds, take-up has not markedly increased, so therefore we are less concerned about such conversions, but we continue to pay close attention to them, as we do to investor behavior."
The Weekend Wall Street Journal writes "Money-Fund Yields Are Rising After the Fed Move. It says, "The yields on money-market mutual funds already are starting to tick up in the wake of the Federal Reserve's boost to short-term interest rates on Wednesday. The average one-day yield for the 100 largest taxable money funds was 0.10% as of Thursday, up from 0.08% the prior day and 0.06% a week earlier, according to Crane Data LLC, a Westborough, Mass., firm that tracks money funds. Money funds buy very short-term government and corporate debt and aim to maintain a steady $1 share price. Investors in the funds "have been starving on zero yield for eight years now," said Peter Crane, president of Crane Data. It should take a little more than a month for higher rates to be fully reflected in fund yields, as it takes that long for the average money fund to turn over its portfolio, Mr. Crane said. But money-fund investors won't necessarily see an increase in yield matching the Fed's quarter-point boost in its short-term rate target.... [I]nvestors in some money funds may not see the full increase in market interest rates because of the continued unwinding of fee waivers that mutual-fund companies had put on their funds in the low-rate environment.... Across the industry, "my wild guess is that half of the first rate hike might flow through to investors," Mr. Crane said.... Money funds will decide on a fund-by-fund and day-by-day basis how much of the rate increase to pass through to investors, Mr. Crane said. The rate increase "may cause a flurry of interest" in money funds by some savers, and some fund companies may choose not to remove fee waivers right away because they won't want to be left behind in that initial investor interest, he said. That will depend on their customer base and competitive position, he added. That calculus won't apply if money funds have particularly low expenses and already have been able to restore their charges to the full usual levels." In other news, Bloomberg wrote Friday, "Day 1 After Fed Liftoff Shows Move Catapults Money Market Rates."
The November issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "MF Consolidation Accelerates; Govt Fund Conversions Begin," which looks at Prime to Government fund conversions, consolidation, and Schwab and Fidelity's declaration of "retail" funds; "Prior Speaks on Changes; New Reality at Fidelity," where we summarize recent comments from Fidelity's Nancy Prior and changes to the firm's funds; and "BlackRock Buys BofA MMFs in Biggest Deal of Decade," which recaps the news that BlackRock acquired BofA's $87 billion money fund business. We have also updated our Money Fund Wisdom database query system with Oct. 31, 2015, performance statistics, and sent out our MFI XLS spreadsheet earlier. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our November Money Fund Portfolio Holdings are scheduled to ship Tuesday, November 10, and our November Bond Fund Intelligence is scheduled to go out Monday, November 16.
MFI's lead "Consolidation" article says, "Acquisitions, liquidations, and conversions headlined a busy month in the money market fund space. With now less than a year until MMF reforms take effect, some Prime funds have already begun converting into Government funds. The first batch of these took place this week, and more are slated to convert in December and throughout 2016. To date, over $230 billion in Prime money funds have converted or declared their intent to convert into Government funds, with over $40 billion converting this week and next. On the acquisition front, BlackRock shook the money fund world with its purchase of BofA's cash management business, and a steady stream of minor fund liquidations, conversions and announcements continued."
The piece continues, "In October, two small Prime money market funds announced conversions to Government, and two more firms announced their exits from the money market space. Nationwide will convert its $1.0 billion Nationwide Money Market Fund and its $1.8 billion Nationwide VIT MMF to Government funds on 10/14/16. Also, Pioneer is converting its $280 million Pioneer Cash Reserves from Prime to Government on 11/13/15. Further, William Blair filed to liquidate its $1.4 billion Ready Reserves Fund on Nov. 18, and Delaware filed to convert its $169 million Delaware Cash Reserves to Delaware Ultrashort [Bond] Fund in Jan. 2016."
Our latest MFI "profile," reads, "Fidelity President of Fixed Income Nancy Prior spoke recently about the state of the money market fund industry in a speech at the AFP Annual Conference entitled, "Money Market Funds: The New Reality." She discussed Fidelity's second phase of changes to its money market fund lineup, which were announced October 14, and also talked about the size of the Government securities sector, conservative ultra-short bond funds and the fact that there is no "silver bullet" for corporate cash investors."
It adds, "The big news in the recent announcement, which followed the late January shocker that Fidelity Cash Reserves will "go government," is that Fidelity will convert both its $65.5 billion Fidelity Institutional Money Market Portfolio and its $2.2 billion FIMM Tax Exempt Portfolio into Retail funds. Fidelity will retain just one Prime Institutional fund, the $47.8 billion FIMM Prime Money Market Portfolio."
We quote Prior, "In the end, MMFs survived a very long and difficult regulatory process, and will continue to exist in a form we all recognize. That survival was not a given through a series of ups and downs of a regulatory process that lasted more than five years. One result of the regulation, however, is that the current value proposition of prime MMFs -- stability, liquidity, and a competitive market yield -- has been diminished. In fact, investors will no longer be able to maximize all three with any single MMF product. There will be tradeoffs between the different types of funds, and investors will have to choose which features are most important to them. For many of you here, prime MMFs have traditionally been a great cash investment option. They met your needs by providing all three elements -- stability, liquidity, and a competitive yield."
The "BlackRock Buys BofA" article says, "In one of the largest acquisitions ever in the money market fund space, BlackRock announced that it was taking over management of BofA Global Capital's cash business. BofA Funds is the 14th largest manager of money market fund assets that we track with $48.3 billion -- and according to BlackRock's press release announcing the move, has $87 billion in total cash assets under management. Prior to this transaction, the largest money fund mergers in the past included both BlackRock's merger with Merrill Lynch Investment Management in 2006 and BlackRock's merger with Barclays Global Investors in 2009. (See our Dec. 2, 2009 News, "Merged BlackRock, BGI Form World's 3rd Largest Money Fund Manager.") When the BofA transaction is complete, BlackRock will become the second largest manager of money fund assets with about $370 billion in AUM, jumping ahead of now No. 2-ranked JP Morgan."
We also look at how money fund managers are reducing fee waivers in the sidebar, "Fee Waivers Being Reduced." It says, "As yields creep up and a possible interest rate hike looms, money fund managers are beginning to reduce the amount of fee waivers. In Q3 earnings calls and releases, Federated, Schwab, Northern Trust and T. Rowe Price all reported lower fee waivers and higher MMF revenue. And, we take our quarterly look at the largest money fund markets in the world in our story, "Global MMF Data Shows: Big Jumps in Ireland and China." It says, "The Investment Company Institute's latest "Worldwide Mutual Fund Assets and Flows" show that global money market mutual fund assets increased in the 2nd Quarter of 2015, rising $31 billion, or 0.7%, to $4.580 trillion. Ireland solidified its spot as the second largest MMF market with a big jump, while China and Luxembourg also gained assets in Q2. Globally, MMF assets increased by $107.5 billion, or 2.2%, over the past year (through 6/30/15)."
Our November MFI XLS, with Oct. 31, 2015, data, shows total assets increasing $56.5 billion in October after declining by $9.4 billion in September, rising $7.2 billion in August, and jumping $52.4 billion in July. YTD, MMF assets are down by just $8.2 billion, or 0.3% (through 10/31/15). Our broad Crane Money Fund Average 7-Day Yield and 30-Day Yield remained at 0.02%, while our Crane 100 Money Fund Index (the 100 largest taxable funds) went up a basis point to 0.05% (7-day).
On a Gross Yield Basis (before expenses were taken out), funds averaged 0.18% (Crane MFA, up one bps) and 0.21% (Crane 100, unchanged). Charged Expenses averaged 0.15% (unchanged) and 0.17% (up one bps) for the two main taxable averages. The average WAMs (weighted average maturities) for the Crane MFA was 36 days (up two days from last month) and for the Crane 100 was 36 days (unchanged). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
Below, we link and excerpt from more coverage of BlackRock's takeover of BofA Funds money fund assets. (See yesterday's News, "BlackRock Taking Over BofA MMFs in One of Biggest Acquisitions Ever.") Reuters writes in "BlackRock to buy Bank of America's $87 billion money-market fund business," "Bank of America Corp, the No. 2 U.S. bank, has agreed to sell its $87 billion money-market fund business to BlackRock Inc in one of the cash-management industry's largest deals ever. The transaction comes as big banks have faced pressure to simplify their businesses since the global financial crisis and marks the largest in a series of deals reshuffling the cash-management industry before costly regulatory reforms take effect in 2016. Terms of the transaction were not disclosed. The agreement is expected to lift BlackRock's global cash-management business to $372 billion from about $285 billion, according to the New York-based company.... Mergers and acquisitions trimmed the money funds industry from 75 providers in the United States last summer to just 67 this year, according to Crane Data, an industry research service. Once the deal closes next year, BlackRock will leapfrog JPMorgan Chase & Co to become the second largest money fund family, behind Fidelity Investments, according to Peter Crane of the research service.... "Everybody has been talking about consolidation for years, but it really didn't happen until today," said Crane. "So many large players have resisted getting out of the business until now, but it's just a matter of the costs and uncertainty of money fund reforms proving to be overwhelming to some players." Crane said Bank of America's decision came after an evaluation of which businesses were essential. "At the same time asset managers are trying to get bigger, banks are trying to get smaller," he said. "This reflects regulatory pressure on both sides."" See too WSJ's "Bank of America to Sell $87 Billion Money-Market Fund Business to BlackRock" and Bloomberg's "BofA Sells $87 Billion Money-Market Funds Unit to BlackRock".
The Wall Street Journal published, "Will a Rate Rise Reach Money-Fund Investors?." It says, "Few areas of finance have as much riding on the Federal Reserve's interest-rate decision this week as the $2.7 trillion money-market-fund industry. While interest rates have been near zero, asset managers including Charles Schwab Corp. and Federated Investors Inc. have waived more than $30 billion worth of fees on their money funds over the past six years to keep expenses from eating up the funds' yields and taking a bite out of investors’ principal. If the Federal Reserve raises interest rates -- which could happen as soon as Thursday -- asset managers will need to decide how to divvy up the funds' increased interest income between reinstating fees and passing along higher yields to return-starved investors. "My guess is that half of the first rate hike won't be passed through to consumers, because it will go to unwinding these fee waivers," said Peter Crane, president of Crane Data LLC, a Westborough, Mass., firm that tracks money-market-fund assets. It continues, "Some share classes of Federated's institutional funds no longer have waivers, so all of a rate increase could flow through to those investors, said `Deborah Cunningham, chief investment officer for money markets at the Pittsburgh-based company. "It won't happen immediately, but will filter through over a month, with 60% of the increase expected in the first week, and the remainder happening over the rest of the month," she said.... Assuming the Fed raises rates in quarter-point increments, that latter group would see a benefit with a second Fed move, she said, and by a third move all waivers should be gone. Asset managers have been forgoing much of their usual fees for running the funds because with interest rates so low, charging the full fees would cause the funds' share price to fall below the steady $1 a share they aim to maintain." The WSJ piece adds, "Charles Schwab alone waived $168 million in fees during the second quarter, on top of $184 million in the first quarter and $2.01 billion over the three years through 2014. Money-fund sponsors have gotten a bit of relief this year. Slight increases in some short-term rates in the marketplace have allowed companies to scale back waivers.... Federated pointed to the reduced waivers -- costing it $22.2 million in the second quarter compared with $29.6 million in the same period a year earlier -- as a major reason its second-quarter revenue rose by 7% from a year earlier. T. Rowe Price Group and Northern Trust Corp. also reported lower waivers.... Asset managers are anxious to claim the lion's share of that to help cover costs incurred due to regulatory changes that were put in place after the 2008 credit crisis, Mr. Crane said. In a recent conference call with analysts, Charles Schwab executives said they were looking for a resumption of higher fees on the more than $150 billion Schwab clients hold in money funds to help generate revenue to support the company's growth plans. Investors in money funds with the lowest usual fees -- and thus either small or no waivers currently -- will see the biggest and most immediate benefit from rising interest rates. That could mean bigger gains for investors in institutional money-market funds, which typically charge lower fees than funds for individuals."
The August issue of our Bond Fund Intelligence newsletter features a profile of Fidelity Investments' Kim Miller, who manages the $4 billion Fidelity Conservative Income Bond Fund. The fund, which launched in 2011, is one of the largest offerings among our Conservative Ultra Short Bond Fund category and was designed to fill the space just outside of money market funds. In the Q&A, which we excerpt below, Miller tells us why he is bullish on ultra-short space. (Note: E-mail us to request a copy of the latest issue of our new Bond Fund Intelligence product and our BFI XLS spreadsheet "complement". As with our MFI, BFI is $500 a year; $1K including the XLS.)
Q: How long have you been managing short-term assets? Miller: I've been at Fidelity for 23 years. I started out as a Municipal Bond analyst then I became a Corporate Bond analyst. Beginning in 2003 I came to the taxable desk and ran both of our institutional money market funds. When I handed those off they had about $140 billion in assets. Then in 2011, I began managing the Conservative Income Bond Fund. Overall, Fidelity has been running short-term bond funds for almost 30 years. Our first short term bond fund was launched in 1986.
Q: Tell us about the launch of Conservative Income Bond Fund. Miller: After December 2008, when the Federal Reserve took interest rates to zero, a lot of Fidelity's institutional shareholders expressed interest in employing different strategies for their short-term investments that didn't need to be immediately available for operating needs. These clients didn't want to earn zero on their entire cash balance, so we started talking about differentiating their short-term investments, sometimes described as the difference between strategic cash and operational cash. By strategic cash, I mean money that they set aside for contingencies or long term capital expenditures. The question was: Is there a product that we can create beyond money markets that will provide a better yield to shareholders without introducing them to undue price volatility? By the end of 2010, we were pretty sure that the opportunity was there, and the fund was launched in in March 2011.
Q: What kind of growth has the fund seen? Miller: Conservative Income has about $4 billion in assets under management. It's been growing steadily, but has leveled off recently. From an institutional perspective, investors wanted to see a 3-year [performance] number, and the fund has been around for 4 years, so we may begin to get some traction from those types of shareholders. But [some of the] money that they would look to redeploy in this fund clearly resides in money market funds, and for the most part I think investors are inclined to wait until reform takes full effect in 2016 before they make any definitive decisions.
Q: What are the investment guidelines for the fund? Miller: The investment objective of the fund is to seek to obtain a high level of current income consistent with the preservation of capital. The fund is designed to complement traditional cash management or liquidity management strategies, not replace them, with less of an emphasis on competing in the Ultra Short category. We talk in 'WAM' terms, not in 'duration' terms, which is more familiar to traditional cash investors.
Normally, the fund maintains a [WAM] of 273 days or less. The fund's lower quality investment grade securities (BBB) exposure is capped at 5%. The fund generally does not purchase any structured product. But most importantly, from the standpoint of NAV stability, the fund normally does not invest in fixed rate securities with a maximum maturity of 2 years or floating rate securities with a maximum maturity of 3 years. That's a real governor when it comes to sourcing supply because it largely precludes the fund from participating in the primary market. So the fund sources most of its supply in the secondary market.
Q: What does the portfolio look like? Miller: It's predominately bonds -- some CDs and CP -- but it's predominantly just short term bonds. The other noteworthy thing is the fund does not buy any subordinated debt. [The fund] doesn't include many Treasury or Government securities, [but] that's more indicative of the interest rate environment.
Q: Who invests in the fund? Miller: There are two classes, and the distinction is between over $1 million and under $1 million. It's about evenly split between the two. The former is built almost entirely on high net worth individuals and the retail class is just retail investors that are looking for the slightly higher yield associated with short-term bond funds. I don't have a lot of strong institutional sponsorship yet, because they are figuring out how they're going to deal with pending changes to Rule 2a-7.
Q: How has the regulatory environment impacted the space? Do you expect to see inflows due to MMF reforms? Miller: There are a couple things going on with the institutional investors that we speak to. First of all, many of them are going to have a lot of difficulty accepting provisions for gates and fees. But I think the bigger challenge is interpreting and understanding the implications of the floating NAV. There are going to be changes in NAV, potentially more frequent than a $10 fund with only two decimals.
Q: What are the risks and rewards of rising interest rates? Miller: We learned a lot in 2004 about how funds behave when the Fed starts raising interest rates. This fund now has close to 65% in floating rate securities indexed to 3-month LIBOR, which I'm hoping starts creeping higher in anticipation of rising rates. With respect to the Fed, I think the threshold for raising rates has never been lower. First of all, FOMC members have indicated a desire to get off zero and labor market conditions certainly allow them to do that. Also, the economy is starting to show some wage inflation. FOMC members have said they only need to be reasonably confident that inflation returns to 2% in a reasonable period. (Note: This interview took place in late July, prior to recent market turmoil.)
How do you interpret what a reasonable period is? The market is thinking a reasonable period is 1 to 2 years, but I think the Fed has a longer term view -- 3 to 5 years. I have every confidence that inflation is going to get to 2% in 3 to 5 years. To me, that gives them the liberty of raising as soon as they want. Frankly, you are going to get a better indication of how the market is going to respond to a rate increase in September than you would in December, so based on the current environment, I fully expect a move in September.
Q: What are the risks to Ultra Shorts? Miller: I think a slower Fed will insulate them a little bit, but the Ultra Short category has a lot of different strategies. The fund has competitors that have up to 20% in high yield, and other competitors buy structured products, some of which are negatively convex and will not do well in a rising interest rate environment. So depending on the strategy, we could see at least for some portion of the asset class, a repeat performance of 2007. But again, I don't think we’re going to have the credit dislocation that we had in 2007.
Q: What do you see for the future of Ultra Shorts? Miller: I'm very bullish on the Ultra Short space. Ultra Shorts serve two purposes: it allows investors that are traditional fixed income investors to shorten up without leaving the asset class entirely. Also, cash right now isn't paying much, so they are not necessarily going to drop all of their fixed income assets into cash. If they are looking to hold on to their investments until other asset classes become more attractive, I think they will look at the conservative end of the Ultra Short category. After the recent changes to 2a-7 become effective, traditional cash investors will probably employ several different strategies. Some of their cash will remain in general purpose money market funds, some will go into government money market funds, and some may be invested directly in treasuries or CDs. Investors with a long time horizon may establish an SMA, but those with shorter scopes will look to conservative Ultra Short bond funds.
We wanted to remind those attending (or considering) our upcoming European Money Fund Symposium in Dublin, Sept. 17-18 to make hotel reservations asap if you haven't yet. Our block of rooms at the Conrad Dublin is almost sold out (and the hotel expects to sell out), and attendees only have a couple more days to get our discounted rate. Visit www.euromfs.com to see more Hotel details, to register or for more information. Crane's European Money Fund Symposium is the largest annual gathering of money fund professionals outside the U.S., and features two days of sessions and discussions on European and global money fund issues. (Note: Mark your calendars too for next year's U.S. Money Fund Symposium, the largest money fund conference in the world, which will take place June 22-24, 2016, in Philadelphia. Our next "basic training" event, Crane's Money Fund University, will take place Jan. 21-22, 2016 at the Hyatt Regency Boston, and we're also preparing to launch a new Bond Fund Symposium, though likely not until March 2017.) In other news, the Financial Times wrote late Friday, "Investors Head for Cash and Gold in Volatile Week. The piece says, "Stock market volatility ... drove investors out of equity funds this week and into gold and money market funds. Outflows of $29.5 billion from equity funds ... were the highest on record in nominal terms, according to an analysis of data from EPFR by Bank of America Merrill Lynch. Meanwhile, more than $22 billion flowed into money market funds, a cash proxy.... "The Chinese situation has some investors taking stock, and there certainly has been an increase in US money market fund assets," says Dennis Gepp, a managing director who runs the European money market funds for US-based Federated Investors." (Note: Crane Data's Money Fund Intelligence Daily shows money fund assets increasing by just $10.7 billion through Thursday (8/27), hinting that flows subsided late last week. Money fund assets inflows have been strong all summer though, even long before the recent market correction.)Archives »