P&I on Federated's Women-Lead Team
Pensions & Investments published the article, "Women-led team at Federated Hermes reigns in money market fund boom," which tells us, "Higher yields in money market funds are drawing in new types of customers -- including corporations, family offices and even pension funds and endowments -- according to Federated Hermes' global liquidity team. Deborah Cunningham, CIO of global liquidity markets at the $715.2 billion asset management firm, said the yields, which are currently hovering above 5%, have lured both retail and institutional investors away from banks, which offer near zero interest on deposits. Cunningham said that in the last year and a half alone, there's been a trillion-dollar decrease in bank deposits and a trillion-dollar increase in money funds." Federated's Sue Hill adds, "Five percent rates on cash draws in a lot of people -- institutions that traditionally have relied on deposits at banks but see this attractive investment on the other side in the money fund space.... The pension and endowment space is not a traditional home for money fund investors. I know there have been allocations we're aware of where that's a part of the market that has been drawn into the space or seen value in the products that we offer." See also Federated Hermes' latest monthly commentary, "Cutting through the noise." It says, "All told, the size of U.S. money market funds continued to grow last month. Industry fund assets vaulted over the $6.2 trillion bar for the first time ever in November, says Crane Data. All three sectors—government, prime and municipal—added net assets, led by retail products. With the Crane 100 Money Fund Index at 5.20%, it's easy to see why. If the Fed does pause for most of 2024, the asset class should remain hard to beat." Cunningham writes, "`Liquidity products worldwide have benefited from the higher rates and the leadership of most central banks, including those of Canada and Australia, resulting in an adequate and stable supply of sovereign bonds. The large, high-quality corporate banks that comprise much of liquidity-product collateral have strong balance sheets, excess capital and hefty reserves. While flows to global money funds have not been as abundant as in the U.S., they are healthy."
