The January issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Wednesday morning, features the articles: "Yields Bottoming Near 4.20%; Assets Keep Breaking Records," which discusses the move lower and plateauing of yields and jumps in assets; "ICI: Worldwide MMF Assets Rise in Q3'24 to $11.2 Tril.," which looks at the latest MMF statistics outside the U.S.; and, "Top Money Funds of 2024; 16th Annual MFI Awards" which reviews the best performing MMFs of 2024. We also sent out our MFI XLS spreadsheet Wednesday a.m., and we've updated our Money Fund Wisdom database with 12/31/24 data. Our Jan. Money Fund Portfolio Holdings are scheduled to ship on Friday, December 10, and our Jan. Bond Fund Intelligence is scheduled to go out on Wednesday, January 15.
MFI's "Yields Bottoming" article says, "Money fund yields fell by 16 basis points to 4.28% on average during December (down from 5.20% at the start of 2024). Our Crane 100 Money Fund Index continues inching lower, falling to 4.23% as of 1/6/25. Fund yields have now digested most of the Federal Reserve's 25 basis point cut on Dec. 18, though they may inch a lower in coming days. But yields should remain solidly above 4.0% in the near-term, and they may even hold these levels for the entire year as expectations for more rate cuts evaporate."
It continues, "Yields on average have declined by 81 bps since the Fed first cut its Fed funds target rate by 50 bps percent on Sept. 18, and they've declined by 38 bps since the Fed cut rates by 1/4 point on 11/7. Yields were 4.45% on 11/30/24, 4.65% on 10/31, 4.75% on 9/30, 5.10% on 8/31, 5.13% on 7/31 and 6/28, 5.14% on 3/31/24 and 5.20% on 12/31/23."
We write in our Worldwide article, "The Investment Company Institute published, 'Worldwide Regulated Open-Fund Assets and Flows, Third Quarter 2024,' which shows that money fund assets globally rose by $572.9 billion, or 5.4%, in Q3'24 to a record $11.215 trillion. Increases were led by a sharp jump in money funds in U.S., Ireland and China, while Luxembourg and France also rose. Meanwhile, money funds in Mexico and Korea were lower. MMF assets worldwide increased by $1.271 trillion, or 12.8%, in the 12 months through 9/30/24, and MMFs in the U.S. now represent 60.4% of worldwide assets."
It states, "ICI's release says, 'Worldwide regulated open-end fund assets increased 6.8% to $74.95 trillion at the end of the third quarter of 2024, excluding funds of funds. Worldwide net cash inflow to all funds was $913 billion in the third quarter, compared with $819 billion of net inflows in the second quarter of 2024. The Investment Company Institute compiles worldwide regulated open-end fund statistics on behalf of the International Investment Funds Association (IIFA), the organization of national fund associations. The collection for the third quarter of 2024 contains statistics from 44 jurisdictions.'"
Our "Top Money Funds of 2024" piece says, "This issue recognizes the top performing money funds, ranked by total returns, for calendar year 2024, as well as the top funds for the past 5‐year and 10‐year periods. We present the funds below with our annual Money Fund Intelligence Awards. These are given to the No. 1‐ranked funds based on 1‐year, 5‐year and 10‐year returns, through Dec. 31, 2023, in each of our major fund categories -- Prime Institutional, Government Institutional, Treasury Institutional, Prime Retail, Government Retail, Treasury Retail and Tax‐Exempt."
The piece continues, "The Top-Performing Prime Institutional fund (and fund overall) was BlackRock Cash Inst MMF SL (BISXX), which returned 5.43%. Among Prime Retail funds, Schwab Value Adv MF Ultra (SNAXX) had the best return in 2024 (5.36%). (Our Crane 100 Money Fund Index returned 5.08% in 2024.)"
MFI also includes the News brief, "Fed Cuts Rates Another 1/4 to 4.375%. The FOMC's Statement says, 'Inflation has made progress toward the Committee’s 2 percent objective but remains somewhat elevated.... In support of its goals, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4-1/4 to 4-1/2 percent.'"
Another News brief, "J.P. Morgan's 'Mid-Week US Short Duration Update,' features, 'November MMF Holdings Update: Sufficient Supply Meeting MMFs' Demand.' It states, 'Taxable MMFs experienced another strong month of inflows in November, with AUMs increasing by nearly $200bn, bringing total balances to just under $7tn. Despite this significant rise in balances, MMFs successfully found enough supply to meet their demand throughout the month, aided by a rise in T-bill, repo, and time deposit outstandings. As a result, MMFs' use of ON RRP fell to an end-of-month low since May 2021.'"
A third News brief, "SEC Stats: MMF Assets Jump to Record $7.13 Tril. in Nov., Yields Fall," says, "The SEC's 'Money Market Fund Statistics' show that total money fund assets rose by $197.8 billion in November to a record $7.125 trillion. Prime MMFs increased $12.9 billion to $1.187 trillion, Govt & Treasury funds increased $181.5 billion to $5.797 trillion and Tax Exempt funds increased $3.4 billion to $141.3 billion. Taxable yields fell again in November after plunging in October.'"
A sidebar, "WSJ on Why to Cheer MMFs," says, "The Wall Street Journal tells us, 'Why You May Want to Cheer for Money-Market Funds.' Subtitled, 'Money funds remain an attractive place for excess cash and can help keep a lid on short-term borrowing costs,' the article says, 'Cash might be a trash asset to some risk-loving traders. But it's a pretty good thing to have sloshing around the economy. U.S. money-market fund assets have so far through mid-December grown by over $800 billion in 2024, bringing the nearly two-year gain since the end of 2022 to roughly $2 trillion, according to [ICI]. This continuing flow may be a surprise to some. At points in 2024, it often seemed that Fed ... cuts, plus a bullish tilt to equity markets, would push more investors out of cash.'"
Our January MFI XLS, with Dec. 31 data, shows total assets increased $113.0 billion to a record $7.184 trillion, after increasing $196.1 billion in November, $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 and $87.0 billion last January.
Our broad Crane Money Fund Average 7-Day Yield was down 15 bps at 4.19%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was also down 16 bps at 4.28% in December. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 averaged 4.58% and 4.55%. Charged Expenses averaged 0.39% 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 12/31/24 on Thursday, 1/9.) The average WAM (weighted average maturity) for the Crane MFA was 37 days (up 1 bp) and the Crane 100 WAM was unchanged from the previous month at 37 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
