The December issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Friday morning, features the articles: "Money Fund Assets Break Over $7.0 Trillion; Still Going," which reviews the continued jump in MMF assets; "Top 10 Stories of 2024: Asset Surge Continues, Yields Peak," which looks back at some of Crane Data's top stories of the year; and, "BlackRock Files for Money Market ETFs: Will They Fly?" which looks at the new ETF filing. We also sent out our MFI XLS spreadsheet Friday a.m., and we've updated our Money Fund Wisdom database with 11/30/24 data. Our Dec. Money Fund Portfolio Holdings are scheduled to ship on Tuesday, December 10, and our Dec. Bond Fund Intelligence is scheduled to go out on Friday, December 13. (Note: We're still taking registrations for our "basic training" event, Money Fund University, which is Dec. 19-20 in Providence, R.I.)
MFI's "$7.0 Trillion" article says, “Money market mutual fund assets broke the $7.0 trillion barrier for the first time ever on Wednesday, Nov. 13, according to our Money Fund Intelligence Daily. Assets jumped following the Federal Reserve's Nov. 7 25 basis point rate cut, and they've continued surging higher in December, rising $58.0 billion month-to-date (through 12/3) to a record $7.121 trillion. Money fund assets have increased by $816.0 billion (13.0%) year-to-date in 2024 (through 12/4).
It continues, "According to our monthly MFI XLS, money fund assets increased by $196.1 billion in November to a record $7.066 trillion. Assets rose by $97.5 billion in October, $149.8 billion in September, $109.7 billion in August, $16.6 billion in July, $15.7 billion in June and $91.4 billion in May. They declined by $15.8 billion in April and $68.8 billion in March. They rose $72.1 billion in February, $93.9 billion in Jan., $32.7 billion in December and $226.4 billion last November."
We write in our Top 10 article, "Dramatic asset growth was again the biggest story of the year, as money market fund assets jumped by $800 billion to a record $7.0 trillion (after jumping by over $1.0 trillion last year). With still almost a month to go, money fund asset growth could approach $1.0 trillion by yearend. In 2023, rising yields were the big news. Though yields have begun declining, and are now below 4.5%, yields remained above 5% for most of the past year. So great yields were another theme of 2024. Other major headlines of 2024 included: the implementation (and minor impact) of the SEC's latest Money Fund Reforms, the birth of tokenized money market funds (and money fund ETFs), the continued growth of Social (and shrinkage of ESG) MMFs and the increase in assets and now decline in yields in European and other worldwide markets. Below, we excerpt from a number of our biggest and most representative news stories of 2024 to highlight the major trends of the past year."
It states, "Crane Data's Top 10 Stories of 2024 include (in chronological order): 'Dreyfus Liquid Assets Celebrates 50th Birthday; ICI Trends for December' (1/31/24); 'American Funds Central Cash to Convert to Govt to Avoid Liquidity Fees' (2/6/24); 'BlackRock Launches Private Tokenized Money Fund, BUIDL; BVI Domicile' (3/22/24); 'ICI: Worldwide MF Assets Jump in Q4'23, Break $10 Trillion; US Leads' (3/25/24); 'Goldman Files to Liquidate Prime Inst MMFs; Barron's: MMFs Tempting' (4/22/24); 'More AFP Liquidity Survey: Banks, MMFs, T-Bills Kings of Cash; MMFs Up' (6/27/24); 'WSJ, Investment News on Brokerage Deposit, Advisory Sweep Pressures' (7/19/24); 'SSGA Sticks w/Prime Inst Money Funds; Discusses Reforms; Benchmarks' (8/29/24); 'MMF Assets Break $6.7 Trillion; Crane 100 Falls Below 5.0%; FT on MMFs' (9/24/24); 'Bloomberg, ignites on Latest MMF Reforms; Prime Inst Shift a Nonevent' (10/3/24); and, 'Money Fund Assets Break Over $7.0 Trillion; S&P on AAA Rated MFs in Q3' (11/13/24)."
Our "BlackRock" piece says, "A Form N-1A Registration Statement for the BlackRock ETF Trust and its new iShares Prime Money Market ETF tells us, 'The iShares Prime Money Market ETF seeks as high a level of current income as is consistent with liquidity and stability of principal.... The Fund seeks to achieve its investment objective by investing, under normal circumstances, in a broad range of U.S. dollar-denominated money market instruments, including government, U.S. and foreign bank, and commercial obligations and repurchase agreements. The Fund invests in securities maturing in 397 days or less (with certain exceptions) and the portfolio will have a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less.'"
The piece continues, "The Fund's Board of Trustees has determined that the Fund will qualify as a 'money market fund' pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended ('Rule 2a-7'). The securities purchased by the Fund are subject to the quality, diversification, and other requirements of Rule 2a-7, and other rules of the Securities and Exchange Commission ('SEC'). Unlike a traditional money market fund, the Fund operates as an exchange traded fund ('ETF'). As an ETF, the Fund's shares will be traded on [an exchange] and will generally fluctuate in accordance with changes in net asset value ('NAV') per share as well as the relative supply of, and demand for, shares on [the exchange]."
MFI also includes the News brief, "Reuters: 'America's $7 Trillion Cash Stash Isn't Going Anywhere.' They write, 'A record-high $7 trillion of cash is currently sitting 'on the sidelines' in money market funds.... Anyone hoping to see a significant chunk of this flooding the wider investment field in the coming months may be disappointed. Many strategists assume this massive pile of cash will start to shrink now that the Federal Reserve is cutting interest rates as investors seek a more profitable home for their capital in the face of diminishing cash yields.... Not so fast.'"
Another News brief, "Money Fund Yields Dip Below 4.5%," states, "Money fund yields declined by 20 basis points to 4.44% on average during the month ended November 30 (as measured by our Crane 100 Money Fund Index), after falling 11 bps in October and 35 bps in September. Yields now reflect the majority of the Fed's 25 bps cut on November 7, but they should continue inching lower this week and next. They've declined by 58 bps since the Fed cut its target rate by 50 bps on Sept. 18 and by 15 bps since the Fed cut rates by 1/4 point on 11/7."
A third News brief, "Northern Trust A.M.'s 'Global Investment Outlook 2025," quotes NTAM, "Money fund assets up while rates go down.... Importantly for money market investors, we and the markets see little chance rates return to the zero lower bound anytime soon -- a welcome change from much of the past 15 years of very low yields on cash."
A sidebar says, "Barron's asks, 'Can Cash Be King Again? Suddenly, T-Bills Look More Attractive.' Subtitled, 'The potential for higher-for-longer rates means cash vehicles, including Treasury bills, money market funds and savings accounts, could continue to offer attractive yields into next year,' the article says, 'Cash could be the best game in town. That’s the argument of one prominent Wall Street analyst after market shifts make short-term investments look a lot more attractive.'"
Our December MFI XLS, with Nov. 30 data, shows total assets increased $196.1 billion to a record $7.066 trillion, after increasing $89.9 billion in October, $155.2 billion in September, $105.6 billion in August, $19.7 billion in July, $11.8 billion in June and $79.7 billion in May. They decreased $17.6 billion in April and $66.7 billion in March, but increased $50.0 billion in February, $87.0 billion in January and $24.5 billion last December.
Our broad Crane Money Fund Average 7-Day Yield was down 20 bps at 4.34%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was also down 20 bps at 4.44% in November. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 averaged 4.71% and 4.71%. Charged Expenses averaged 0.38% and 0.27% for the Crane MFA and the Crane 100. (We'll revise expenses once we upload the SEC's Form N-MFP data for 11/30/24 on Monday, 12/9.) The average WAM (weighted average maturity) for the Crane MFA was 36 days (up 1 bp) and the Crane 100 WAM was up 1 bp from the previous month at 37 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
