Press Releases & Quotes
Crane Data released a "beta" version of its latest product enhancement, the Money Fund Portfolio Laboratory this week. Designed as an online complement to our Money Fund Portfolio Holdings dataset, the Portfolio Laboratory allows subscribers to our Money Fund Wisdom service to build custom aggregate money fund portfolios and to "X-ray" and analyze the underlying holdings by country, issuer, maturity and category. Choose "Laboratory Beta" underneath our "Wisdom" menu to explore this new feature, or e-mail Pete for demo access or more details. In other news, ICI's latest "Money Market Mutual Fund Assets" says, "Total money market mutual fund assets decreased by $14.78 billion to $2.567 trillion for the week ended Wednesday, May 2, the Investment Company Institute reported today. Taxable government funds decreased by $3.51 billion, taxable non-government funds decreased by $12.39 billion, and tax-exempt funds increased by $1.12 billion."
With less than two months to go, preparations are heating up for our 4th annual Crane's Money Fund Symposium. We expect a record turnout (possibly approaching 500) for our 2012 Symposium, which will be held June 20-22, 2012, at The Westin Convention Center in Pittsburgh. (Crane Data's big annual money fund event attracted almost 400 speakers, sponsors, and attendees in Philadelphia last year.) For the full agenda and for more information, visit www.moneyfundsymposium.com. We're encouraging attendees to register <i:https://www.kinsleymeetings.com/Crane/register.asp>`_ and to make hotel reservations early this year due to the expected record turnout and due to the NHL Draft being in Pittsburgh the same week. Crane's Money Fund Symposium offers money market portfolio managers, investors, issuers, and service providers a concentrated and affordable educational experience, as well as an excellent and informal networking venue. Registration for Crane's Money Fund Symposium 2012 is still $750; exhibit space is $3,000; and sponsorship opportunities are $4.5K, $6K, $7.5K, and $10K. Our mission is to deliver a better and less expensive conference alternative to money market fund professionals and investors, and we hope to see you in Pittsburgh this summer! Crane Data is also assisting German conference company IQPC with a new European Money Fund Summit, which is tentatively scheduled for November 19-20, 2012, in Frankfurt, Germany. Finally, mark your calendars for next year's Money Fund University, which is tentatively scheduled for Jan. 23-24, 2013, in New York City.
The April issue of Crane Data's Money Fund Intelligence was e-mailed to subscribers Monday morning, and our March 31, 2012 monthly performance data and rankings were distributed via our Money Fund Intelligence XLS monthly spreadsheet, our Money Fund Wisdom database query website and our Crane Index money fund averages series. (Our monthly Money Fund Portfolio Holdings with 3/31/12 data will be distributed on the 9th business day, April 13.) The new edition of MFI features the articles: "Another Two Bite the Dust: Consolidation Becomes Real," which discusses the pending liquidations and exits of Fifth Third and Victory Funds from the money fund space; "Talking Tax Exempts w/Western Asset's Amodeo," our monthly fund "profile" which interviews Western Muni MMF Managers Robert Amodeo and Charles Bardes; and, "No Truce in MMF Reform Debate; No Proposal Yet," which discusses recent (unsuccessful) attempts to compromise over pending regulations.
Our lead piece says, "We've been arguing for years that predictions of consolidation in the money fund space have been greatly exaggerated, but the latest couple of announcements have us rethinking our position. Two decent-sized, long-term players (as opposed to the fringe outfit that have folded to date) have recently announced exits -- Fifth Third will have its money funds liquidated and its assets merged into Federated, and KeyBank's Victory Funds is also calling it quits and liquidating."
Money Fund Intelligence explains, "In the past two years, we've seen Old Mutual, Paypal, Pacific Capital, Pioneer (partial), Scout (UMB), Ridgeworth (merged into Federated), Eagle (Raymond James), and a handful of others announce liquidations. The number of funds tracked by Crane Data has fallen from 1,310 to 1,209, which also includes lots of mergers and stream-linings."
The Western Asset Profile, which we'll excerpt later this month, tell us, "This month, MFI interviews managers of `Western Asset Management's Municipal Money Market Funds. We speak with Robert Amodeo, Portfolio Manager and Head of the Municipal Group, and Charles Bardes, a Portfolio Manager on the Tax-Exempt Money Market Mutual Funds. The two have been running money funds with the unit since its days as Salomon Brothers Asset Management (in the late '80's/early '90's), which then became Citigroup Asset Management and eventually was acquired by Western parent Legg Mason. Our Q&A involving tax-exempt money fund issues follows."
The third feature piece in our monthly says, "Despite SEC Commissioner Elisse Walter's recent call for a "step back" and a "re-engage"-ment in the discussion over additional money market fund regulatory reforms, the public battle between the money fund industry and the bank regulatory community rages on. While a number of the most public comments occurred at the ICI's Phoenix Mutual Funds and Investment Management Conference, regulators and industry participants continue to wage a PR war on multiple fronts. The pending reform proposal, which The Wall Street Journal claimed was imminent, remains nowhere to be seen. (We're guessing June.)"
The April MFI also contains monthly News, Indexes, top rankings and extensive performance tables. E-mail info@cranedata.us to request the latest issue. Subscriptions to Money Fund Intelligence are $500 a year and include web access to archived issues and fund "profiles". Additional users are $250 and bulk pricing and "site licenses" are available. Crane Data's other products include: Money Fund Intelligence XLS ($1K/yr), MFI Daily ($2K/yr), Money Fund Wisdom ($4K/yr), MFI International ($2K/yr), and Brokerage Sweep Intelligence ($1K/yr).
Crane Data's Peter Crane is scheduled to speak at the 30th Anniversary New York Cash Exchange, hosted by the Treasury Management Association of New York May 23-25 at the New York Hilton. Crane will present a session entitled, "Money Funds After the Makeover: Cash Investing Strategies," along with Barclays' Joseph Abate and Federated Investors' Debbie Cunningham. The session description says, "Money market mutual funds and cash investors continue to adjust to regulatory changes and market events and turmoil. Money fund expert Peter Crane will lead a panel with Barclays Capital's Joseph Abate and Federated Investors' Debbie Cunningham on the new Rule 2a-7 proposals and other money market changes, and how they have altered and will continue to alter the investment landscape. The session will also discuss what investors should be aware of in analyzing their money funds and cash investments and will review recent trends, regulations, and concerns in the money markets." Note also that all three presenters will be among those speaking at Crane's Money Fund Symposium, which will take place in Pittsburgh on June 20-22. Visit www.moneyfundsymposium.com for more details.
A press release sent out yesterday entitled, "Fitch Updates Global Money Market Fund Criteria, Core Ratings Framework Unchanged," says, "Fitch Ratings has published updated global criteria for rating money market funds (MMFs). The core analytical framework remains unchanged, and Fitch does not expect any ratings changes as a result of the updated criteria. The updated criteria makes one notable change in relation to Fitch's treatment of highly-rated sovereign, government agency and supranational securities with respect to repurchase agreement collateral and portfolio liquidity."
The release adds, "Other and more marginal criteria adjustments include clarification on how Fitch treats MMFs' direct and collateralized exposures to a fund's sponsor or parent, which is mostly relevant for European MMFs, more detailed guidelines on investments denominated in a currency other than that of the fund's base currency and related currency hedging, as well as guidelines on the fund's custodian bank. Fitch's global MMF criteria focuses on MMFs that seek to achieve principal preservation and provide shareholder liquidity through active management of credit, market, and liquidity risks."
Fitch adds, "MMF ratings are assigned to MMFs that operate as constant net asset value (CNAV) funds as well as certain European variable net asset value (VNAV) funds." The full report is entitled, "Global Money Market Fund Rating Criteria."
In other news, Reuters released an article entitled, "Big US money funds' fees outpace investor returns", which features a relatively detailed discussion on fee waivers, revenues and industry consolidation. It says, "The biggest U.S. money market funds have done a better job of preserving their management fees than many realize, a development that may surprise investors whose dividends have plummeted 96 percent from peak levels five years ago."
The article explains, "Investors collected $5.24 billion in total dividends from money funds in 2011, a 72 percent decline from $18.6 billion two years earlier and a huge plunge from the $127.9 billion gained back in 2007, before the Federal Reserve chopped short-term rates to near zero. In contrast, the fees collected by money fund sponsors declined to $4.7 billion last year, a 57 percent drop from 2009 and a 52 percent decline since five years earlier, according to data from the Investment Company Institute, the trade group for the fund industry."
Reuters adds, "The big players have demonstrated plenty of resiliency in even the most trying market conditions, said Pete Crane, who runs research firm Crane Data. Large funds, which generate far more in fees than are needed to pay for their managers, credit analysts and other expenses, have enormous economies of scale, he said."
They quote Crane, "The money fund industry has yet to see any real consolidation or the exodus of a major player. If the pressure were that acute, you would see fees being introduced."
Bloomberg writes "Top Money Funds Doubled French Bank Holdings Last Month". The article says, "The 10 biggest prime U.S. money market mutual funds more than doubled their holdings in French banks in February, as lending from the European Central Bank bolstered investor confidence. French bank holdings rose to $18.2 billion from $8.8 billion in the month, according to data compiled and published in today's Bloomberg Risk newsletter. Funds run by New York- based JPMorgan Chase & Co. (JPM) and Boston's Fidelity Investments accounted for one-third of the total increase." Bloomberg quotes us, "It appears the risk trade is back on, but funds are still staying very cautious," Peter Crane, president of research firm Crane Data LLC in Westborough, Massachusetts." The piece adds, "The top U.S. money market funds have boosted lending to French banks for two straight months after withdrawing from them for most of 2011 because of concern that Europe's sovereign-debt crisis might lead to defaults. The European Central Bank offered three-year loans to the banks in December and February, easing funding worries surrounding French banks since August."
Money Fund Symposium, Crane Data's annual money market mutual fund conference (the 4th one will be in Pittsburgh, June 20-22), is featured in Meeting Planning firm Kinsley Associates' latest "In the Know" newsletter, in an article entitled, "5 Keys to Successful Conferences and Meetings for Small Businesses." The article cites the show's dramatic growth in its first three years and says, "Many small companies fall prey to the belief that only large companies are poised to include conferences and meetings in their solution offerings. Admittedly, larger companies may have more advantages due to their size, but smaller companies can reap the same benefits if they partner with the right company and utilize best practices. In fact, smaller companies can achieve fantastic results because they are small and nimble. Crane Data, a company with just seven employees hired Kinsley Meetings to help with its initial conference. These are the keys to success we employed for Crane Data that prove small companies can successfully navigate conferences and meetings: 1. Plan Ahead. 2. Speakers and content drive the momentum. 3. Leverage existing products/services. 4. Destination is key. 5. Hire the right company. Hosting a conference or meeting takes strategic planning and attention to detail. Finding the right partner is crucial to conducting a successful conference or meeting.... In the case of Crane Data, Kinsley Meetings handles all the logistics for the conferences, including the destination, venue, registration, and all the fine details. This well-defined separation of responsibilities enables Peter to focus on the educational content of the meeting, and Kinsley to focus on its core strength: meetings." For more on Crane's Money Fund Symposium, visit http://www.moneyfundsymposium.com.
Crane Data's Peter Crane will be featured on a Webinar hosted by StoneCastle Cash Management on Tuesday, February 28 from 4-5pm. (To register, go here.) StoneCastle's description says, "In response to the many questions related to recent money fund headlines and decline in earned credit yields, StoneCastle Cash Management is hosting the webcast, Cash Management Today: Beyond the Headlines, with special guests Peter Crane, President of Crane Data.... The call is scheduled for Tuesday, February 28th at 4pm. This call is geared for the treasury professional." In other news, ICI reported its latest weekly "Money Market Mutual Fund Assets" Thursday. It says, "Total money market mutual fund assets increased by $6.22 billion to $2.665 trillion for the week ended Wednesday, February 22, the Investment Company Institute reported today. Taxable government funds decreased by $9.86 billion, taxable non-government funds increased by $16.02 billion, and tax-exempt funds increased by $60 million." The numbers show a shift from Government to Prime funds, saying, "Assets of institutional money market funds increased by $4.25 billion to $1.743 trillion. Among institutional funds, taxable government money market fund assets decreased by $10.07 billion to $713.02 billion, taxable non-government money market fund assets increased by $14.99 billion to $934.30 billion, and tax-exempt fund assets decreased by $670 million to $95.26 billion."
The Wall Street Journal writes "Money-Fund Plan Gets Cold Shoulder". It says, "Regulators' latest plan to shore up the $2.7 trillion money-market mutual fund industry is getting an icy reception from some individual investors. As part of a proposal being floated by the Securities and Exchange Commission, investors who wish to sell all their holdings in a money-market fund would only be allowed to receive 95% to 97% of their cash back immediately. The remaining money would be returned to them after 30 days, according to the SEC. That isn't sitting well with investors like Robert "Willie" Williamson, a 66-year-old retired Navy rear admiral who lives in Annapolis, Md.... The goal of the SEC's proposal, expected to be announced as soon as the end of March, is to make sure the funds, which are designed to be safe, have enough cash on hand to pay back all investors during a market storm. It also would require money funds to boost their capital cushions, an idea that is meeting stiff resistance from the fund industry. The SEC proposal is presenting a rare instance where money-management firms and some customers are united." The Journal adds, "Industry experts warn that funds still are struggling under the weight of the 2010 rules, which have forced some funds to hold lower-yielding securities -- at a time when interest rates are at multidecade lows. The yield on the Crane 100, an index of the 100 largest money funds, sunk to 0.06% at the end of January from 4.98% in January 2007, according to Crane Data LLC, a Massachusetts-based money-fund tracker. Assets in retail money funds have fallen to $939 billion at the end of last year from a 14-year-peak of $1.2 trillion in 2007, according to Crane Data. Peter Crane of Crane Data says low returns are the main reason investors are fleeing. "Retail investors have not blinked when it comes to safety issues in money-market funds," says Mr. Crane. "It's all about yield.""
St. Louis Post-Dispatch writes "Money market funds mix low yields with high controversy". It says, "Money-market funds aren't making much money for anybody right now, but they're becoming a hot issue in Washington. The Securities and Exchange Commission is about to propose rules designed to bolster confidence in the funds. Its goal is to prevent a repeat of 2008, when one fund's losses caused a run on other funds, forcing the government to implement a temporary insurance program. The SEC hasn't made a formal proposal yet, but the mutual fund industry is already accusing the agency of regulatory overkill. The industry worries that drastic changes could cause investors to pull out much of the $2.7 trillion they hold in money market funds. Certainly no one invests in money funds today for the yields, which average just 0.03 percent.... The SEC reportedly is considering three types of new rules: A floating share price, a 30-day hold on part of each investor's account, and higher capital requirements.... The fund industry is gearing up to fight the proposed rules. Paul Schott Stevens, president of the Investment Company Institute, a trade group, posted a commentary last week saying that the proposals would "drive fund sponsors out of the industry ... and leave the remaining sponsors with a product that few investors or their financial advisers will use." The piece quotes, "Peter Crane, founder of fund-tracking firm Crane Data, thinks none of the ideas will be implemented. SEC Chairman Mary Schapiro wants tighter regulations, but it's not clear whether she has enough votes on the commission, or whether the rules could withstand a legal challenge." Crane says, "The thought that the SEC is going to harm 30 million investors is ridiculous. It's one of the most powerful voting blocs in the country: people with money."
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