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|MMFs Dodge Debt Ceiling, Back to Regs||1|
|Going Global: JPMAM's John Donohue||1|
|MMF Portals Continue Transparency Push||1|
|Money Mkt News, Benchmarks||1|
|Brokerage Sweep & Bank Saving||8|
|People, Calendar, Subscription||8|
|Top Performing Tables, Indexes||9-12|
|Fund Performance Listings||13-30|
|Crane Money Fund Indexes||24|
The content page contains archives and delivery settings for all subscriptions.
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The November issue of Crane Data's Money Fund Intelligence was sent out to subscribers Thursday morning. The latest edition of our flagship monthly newsletter features the articles: "MMFs Dodge Debt Ceiling Bullet, Back to Battling Regs," which reviews the mini crisis over the Treasury debt ceiling and threat of technical default; "Going Global w/Liquidity: JPMAM's John Donohue," which interviews the leader of the largest money fund manager worldwide; and, "MMF Portals Continue Transparency, Direct Push," which discusses the flurry of enhancements announced by online trading platforms last month. We've also updated our Money Fund Wisdom database query system with Oct. 31, 2013, performance statistics and rankings, and will be sending out our MFI XLS shortly. (MFI, MFI XLS and our Crane Index products are available to subscribers at our Content center.) Our October 31 Money Fund Portfolio Holdings are scheduled to go out on Tuesday, Nov. 12.
Our Debt Ceiling piece says, "In what seemed almost like a welcome relief from the seemingly permanent ultra-low yield and regulatory reform threats, money funds saw the threat of a Treasury debt ceiling default come and go, all within a matter of weeks in October. Assets fled and attention focused on what to do in the event of a Treasury default, and events unfolded just as they did the last time this overblown scare occurred late in the summer of 2011."
The November issue's lead story continues, "Money market mutual fund asset levels looked like a rollercoaster. (See the chart on page 2.) They had climbed slowly for 3 months straight through the end of September, then plunged by $70 billion in the first half of the month before rebounding strongly (up $60 billion) in the second half of the month. Treasury Institutional and Government Institutional funds drove the outflows, though Prime Institutional funds caught some of the rebound."
Our "profile" on JPMAM's John Donohue says, "In the latest Money Fund Intelligence, we speak with John Donohue, J.P. Morgan Asset Management's Head of Global Liquidity and Chief Investment Officer. Donohue shares his thoughts on market trends, portfolio strategies and the pending proposals for new money fund regulation. Our Q&A follows."
We write: "MFI: Tell us about JPMAM's history in money funds. Donohue: J.P. Morgan has been a provider of money market funds since 1987, which covers quite a few market cycles. In 2003, we decided to globalize the business and significantly bolster our investment platform, client service and fund management infrastructure. Back then, we had funds in just three currencies (USD, EUR, GBP). Now we have 30 different money market funds in eight currencies (including JPY, AUD, RMB, SGD, CNH) across 28 countries."
The article on the Portal Improvements explains, "As has been the case the last several years, the AFP's (Association for Financial Professionals') annual corporate treasury conference (most recently in Las Vegas) triggered a flurry of press releases, many from online money fund trading "portals". Among the most recent announcements -- Goldman Sachs' portal finally joined the "transparency" bandwagon, offering various look-through options on money fund portfolio holdings, SunGard released a survey on portal usage, BNY Mellon revealed enhancements to its Liquidity Direct portal, Cachematrix debuted a new module, ICD added functionality, and MyTreasury added funds to its portal."
Finally, registration is now open and the agenda is ready for Crane's Money Fund University, our "basic training" event, which will be held Jan. 23-24, 2014 in Providence, Rhode Island. Our 4th annual MFU will contain a heavy focus on money fund regulations, as well as the basics on money funds, interest rates, and overviews of various money markets. Our next big show, Crane's Money Fund Symposium, will take place June 23-25, 2014, in Boston. Registrations and sponsorships are now being accepted for this too, and the preliminary agenda is being finalized. (Watch for the agenda later this month.)
Yesterday, Crane Data published its latest monthly Money Fund Intelligence Family & Global Rankings, which ranks the asset totals and market share of managers of money funds in the U.S. and globally. (It's available to our Money Fund Wisdom subscribers.) The latest reports show big asset gains by the majority of major money fund complexes in September and in the 3rd quarter. Dreyfus, Fidelity and JPMorgan showed the largest gains in September, rising by $6.4 billion, $5.8 billion and $5.3 billion, respectively, while JPMorgan, Fidelity and Dreyfus also led in Q3 (rising by $19.5B, $13.7B and $11.8B). Money fund assets overall rose by $42.7 billion in September, after rising by $26.7 billion in August and $27.8 billion in July (according to our Money Fund Intelligence XLS); they rose a total of $97 billion in Q3.
Our latest domestic U.S. money fund Family Rankings show that Fidelity Investments remained the largest money fund manager with $432.7 billion, or 17.1% of all assets (up $5.8 billion in Sept., up $13.7B over 3 mos. and up $18.7B over 12 months), followed by JPMorgan's $244.8 billion, or 9.7% (up $5.3B, up $19.5B, and up $21.7B for 1-month, 3-months and 12-months, respectively). Federated Investors ranks third with $226.5 billion, or 9.0% of assets (up $4.1B, up $5.3B, and down $7.9B), Vanguard ranks fourth with $175.9 billion, or 7.0% (up $2.3B, $5.7B, and $14.5B), and Schwab ranks fifth with $163.4 billion, or 6.5% (up $1.5B, $3.2B, and $9.8B) of money fund assets.
The sixth through tenth largest U.S. managers include: Dreyfus ($162.2B, or 6.4%), BlackRock ($146.9B, or 5.8%), Goldman Sachs ($126.9B, or 5.0%), Wells Fargo ($121.4B, or 4.8%), and Morgan Stanley ($97.9B, or 3.9%). The eleventh through twentieth largest U.S. money fund managers (in order) include: SSgA, Northern, Invesco, UBS, BofA, Western Asset, DB Advisors, First American, RBC, and Franklin. Crane Data currently tracks 74 managers, down one from last month. (Hartford liquidated its money fund in September.)
Over the past year, JPMorgan shows the largest asset increase (up $21.7B, or 9.5%), followed by Fidelity (up $18.7B, or 4.5%) and Wells Fargo (up $16.9B, or 15.8%). Other big gainers since Sept. 30, 2012, include: Vanguard (up $14.5B, or 9.0%), SSgA (up $13.9B, or 20.7%), Schwab (up $9.8B, or 6.4%), Dreyfus (up $9.1B, or 6.0%), and Invesco (up $8.2B, or 14.9%). The biggest declines over 12 months include: `Federated (down $7.9B, or 3.4%), UBS (down $7.6B, or 14.2%), First American (down $3.1B, or 7.8%), and DB Advisors (down $2.9B, or 7.0%). (Note that money fund assets are very volatile month to month.)
When "offshore" money fund assets -- those domiciled in places like Dublin, Luxembourg, and the Cayman Island -- are included, the top 10 managers match the U.S. list, except for BlackRock moving up to No. 3, Goldman moving up to No. 5, and Western Asset appearing on the list at No. 9. (displacing Morgan Stanley from the Top 10). Looking at these largest Global Money Fund Manager Rankings, the combined market share assets of our MFI XLS (domestic U.S.) and our MFI International ("offshore), we show these families: Fidelity ($437.3 billion), JPMorgan ($369.4 billion), BlackRock ($244.4 billion), Federated ($236.9 billion), and Goldman ($191.0 billion). Dreyfus, Vanguard, Schwab, Western, and Wells Fargo round out the top 10. These totals include offshore US dollar funds, as well as Euro and Sterling funds converted into US dollar totals.
In other news, our October MFI and MFI XLS show net yields remained at record lows and gross yields continued to set new record lows for the month ended Sept. 30, 2013 Our Crane Money Fund Average, which includes all taxable funds covered by Crane Data (currently 831), remained at a record low of 0.01% for both the 7-Day and 30-Day Yield (annualized, net) averages <b:>`_. (The Gross 7-Day Yield moved down one bps to a record low 0.14%.) Our Crane 100 Money Fund Index shows an average yield (7-Day and 30-Day) of 0.02%, also a record low, and down from 0.05% at the start of 2013. (The Gross 7- and 30-Day Yields for the Crane 100 were 0.17%.)
Our Prime Institutional MF Index yielded 0.2% (7-day), the Crane Govt Inst Index, Crane Treasury Inst, Treasury Retail, Govt Retail and Prime Retail Indexes all yielded 0.01%. The Crane Tax Exempt MF Index also yielded 0.01%. (The Gross Yields for these indexes were: Prime 0.20%, Govt 0.10%, Treasury 0.07%, and Tax Exempt 0.14% in Sept.) The Crane 100 MF Index returned on average 0.00% for 1-month, 0.01% for 3-month, 0.02% for YTD, 0.04% for 1-year, 0.05% for 3-years (annualized), 0.19% for 5-year, and 1.68% for 10-years.
Below, we excerpt from the recent money fund "profile" in the June issue of our MFI newsletter, a piece entitled, "British Portal Invasion: MyTreasury's Meadows." MFI writes: This month's Money Fund Intelligence interviews Justin Meadows, CEO of the U.K.-based online money market fund trading "portal" MyTreasury. The company recently entered the U.S. market, and hired money fund veteran Paul Rice as Managing Director, Americas. We discuss the portal's history, recent initiatives and other major money fund issues in Europe and the U.S. with Meadows below.
MFI: Tell us about your history. Meadows: MyTreasury actually started off as a project funded by the European Commission back in 2004.... What we did was put together a project with quite a few European [corporate] treasury departments, funds, banks, and software providers. We did two years of initial research, and during the course of that we actually got over 200 corporate treasuries in various European organizations involved in the testing and validation of what we produced. That was through our contact with the European Association of Corporate Treasurers.... Having over 200 involved is why we believe we've ended up with something that actually works for treasurers, because it was largely designed and tested by them.
The project really focused on money market funds, time deposits and commercial paper, but funds were always at the forefront of that. When we completed the research we got a few strong messages back.... One was they wanted a direct trading platform, fully disclosed, not the omnibus trading platform which wasn't strongly supported at all.... [I]nvestors didn't want to be dis-intermediated in their relationships with the banks and the funds either, so that was a key thing. Another thing when they were looking for complete automation; they didn't want something that involved manual interference.... The other thing [was that to] get this off the ground we needed to find a strong partner to link with who had credibility in the market.
We ended up with ICAP largely because of the feedback that we'd been given. First of all, ICAP is the world's largest interdealer broker, so it has relationships, globally, with the all the banks and funds. So, we wouldn't start from scratch in that respect.... We thought funds and banks could be well delivered by ICAP and that has proved to be the case.... We have been given the space and the resources to build it.... We've got all the support and all the benefit of having a major player in the market and somebody with all the technical skills that we need to deliver the platform and the integration needed for automation.
MFI: Was it originally just European-domiciled funds? Meadows: Yes, it was. We started up as a European money market, or actually just "offshore" money market fund portal, for European corporate treasurers. When we did our first trade we had two investors and two money market funds on the platform. Now, in the offshore space, we have ... all the IMMFA funds, and we have quite a few others as well. In the U.S. space, we either already have or we are just finishing up turning live those major funds families that account for about 92% of institutional assets.
MFI: When did you guys enter the U.S.? Meadows: We are really only entering with trading now.... It's been a very slow process.... We are different from most portals which operate under seller and dealer agreements, or distribution agreements. We operate under a license agreement, and we regard ourselves as technology providers, not distributors, because we have this direct model. We don't open accounts on behalf of anybody. We don't take delegated trading authority on behalf on anybody. We're not signatures on accounts. So with this in mind, we just simply facilitate a complete view of the market and the secure execution of transactions.... It helped that we are cheap, if I can use that term. All our fees are based on wide distribution to a large number of clients, high volume low cost, and full automation. We got there in the end.
MFI: Can you talk about the size of the portal? Meadows: We service about $70 billion on the platform.... That is almost all money market funds at the moment, but time deposit and CD trading is beginning to build. There was about $500 billion traded through the platform last year. We have almost 500 share classes in about 250 different funds at the moment.... It is fairly evenly divided [between currencies]. To be honest our Euro assets have kept up despite what has been going on over there. Dollar is probably our fastest growing, partly of course because we are coming into the US now. But before when we were just offshore, it started with almost all GBP and then Euro started growing quite significantly.... At the moment, our initial US clients are bringing just under $10 billion on board, but it is growing quite quickly. The rest is Dublin and Luxemburg.
The June issue of Crane Data's Money Fund Intelligence newsletter was e-mailed to subscribers Friday morning. It features the articles: "SEC Issues MMF Reform Proposal; Is Floating Out?," which talks about the recently-issued 700-page proposed regulations; "British Portal Invasion: MyTreasury's Meadows," which interviews ICAP's Justin Meadows; and, "Ultra-Short Space Getting Uncomfortably Warm," which excerpts from recent articles on activity in the enhanced cash and the space beyond money funds. We've also updated our Money Fund Wisdom database query system with May 31, 2013, performance statistics and rankings, and our MFI XLS was also sent out Friday a.m. Our May 31 Money Fund Portfolio Holdings are scheduled to go out tomorrow, June 11. Note that we're also making final preparations for next week's Crane's Money Fund Symposium, which will be held June 19-21, 2013, in Baltimore, Md. Registrations ($750). We hope to see many of you in Baltimore!
Our SEC Issues piece says, "The U.S. Securities & Exchange Commission, the primary regulator of money market mutual funds, issued its long-awaited Money Market Fund Reform Proposal earlier this week following a unanimous vote to release it at an Open Meeting on Wednesday. The Commission pleasantly surprised money fund managers and investors with a downright reasonable proposal, relegating the floating NAV option to one of two alternatives and limiting it to just Prime Institutional funds. They also included an alternative option of liquidity fees plus "gates", which should gather broad support from fund providers."
MFI explains, "The SEC's Proposal says, "The Securities and Exchange Commission is proposing two alternatives for amending rules that govern money market mutual funds under the Investment Company Act of 1940. The two alternatives are designed to address money market funds' susceptibility to heavy redemptions, improve their ability to manage and mitigate potential contagion from such redemptions, and increase the transparency of their risks, while preserving, as much as possible, the benefits of money market funds. The first alternative proposal would require money market funds to sell and redeem shares based on the current market based value of the securities in their underlying portfolios, rounded to the fourth decimal place (e.g., $1.0000), i.e., transact at a "floating" net asset value per share ("NAV"). The second alternative proposal would require money market funds to impose a liquidity fee (unless the fund's board determines that it is not in the best interest of the fund) if a fund's liquidity levels fell below a specified threshold and would permit the funds to suspend redemptions temporarily, i.e., to "gate" the fund under the same circumstances. Under this proposal, we could adopt either alternative by itself or a combination of the two alternatives."
MFI writes in its monthly "profile," "This month's Money Fund Intelligence interviews Justin Meadows, CEO of the U.K.-based online money market fund trading "portal" MyTreasury. The company recently entered the U.S. market, and hired money fund veteran Paul Rice as Managing Director, Americas. We discuss the portal's history, recent initiatives and other major money fund issues in Europe and the U.S. with Meadows below."
The article on Ultra-Short Bond Funds explains, "The sectors just beyond money market funds, enhanced cash and ultra-short bond funds, are once again seeing a resurgence eerily familiar to 1993 and 2004. When a number of mutual fund companies launch similar products, it's time to get a little nervous. Ultra-short bond funds have been in the news a little too much lately." See the latest issue and future excerpts for more, or contact us to request the latest issue.