Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of Feb. 14) includes Holdings information from 62 money funds (up 15 from two weeks ago), or $3.585 trillion (up from $2.901 trillion) of the $7.213 trillion in total money fund assets (or 49.7%) tracked by Crane Data. (Note: Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our Feb. 12 News, "Feb. Money Fund Portfolio Holdings: Treasuries Higher, Fed Repo Plunges.")
Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.713 trillion (up from $1.383 trillion two weeks ago), or 47.8%; Repurchase Agreements (Repo) totaling $1.226 trillion (up from $1.003 trillion two weeks ago), or 34.2%, and Government Agency securities totaling $306.3 billion (up from $273.5 billion), or 8.5%. Commercial Paper (CP) totaled $139.4 billion (up from two weeks ago at $107.1 billion), or 3.9%. Certificates of Deposit (CDs) totaled $79.5 billion (up from $58.4 billion two weeks ago), or 2.2%. The Other category accounted for $85.2 billion or 2.4%, while VRDNs accounted for $36.3 billion, or 1.0%.
The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.713 trillion (47.8% of total holdings), Fixed Income Clearing Corp with $345.3B (9.6%), the Federal Home Loan Bank with $196.2 billion (5.5%), JP Morgan with $110.2B (3.1%), Citi with $87.2B (2.4%), BNP Paribas with $82.4B (2.3%), Federal Farm Credit Bank with $75.2B (2.1%), RBC with $64.1B (1.8%), Barclays PLC with $51.2B (1.4%) and Goldman Sachs with $47.1B (1.3%).
The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($294.9B), Goldman Sachs FS Govt ($277.7B), JPMorgan 100% US Treas MMkt ($251.9B), Fidelity Inv MM: Govt Port ($220.5B), Morgan Stanley Inst Liq Govt ($182.5B), BlackRock Lq FedFund ($172.3B), State Street Inst US Govt ($168.5B), BlackRock Lq Treas Tr ($154.7B), Fidelity Inv MM: MM Port ($150.7B) and Dreyfus Govt Cash Mgmt ($131.2B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
In other news, Investment News writes on, "Pershing discussing move to control portion of broker-dealers' cash." They tell us, "The financial advice industry's skirmish over cash sweep accounts is taking another turn, with clearing giant Pershing evaluating plans to create a new charge, akin to a tax, on cash held by its broker-dealer clients. Pershing is discussing with broker-dealers that use its platform plans to get first dibs on cash -- up to $10,000 -- held in their customers' accounts."
The piece explains, "Industry sources stressed that Pershing has not yet finalized details of the new cash sweep plan but is discussing it with broker-dealer clients. But, similar to a decision late last year by its leading competitor, Fidelity, Pershing is discussing intentions to sweep the first $10,000 held in a broker-dealer's customer's account into a money market fund or similar cash product that it controls, according to two senior industry executives with first-hand knowledge of Pershing's plan."
Investment News comments, "Cash sweep programs have turned into a bit of a viper's nest for the financial advice industry, particularly large broker-dealers. Brokerage firms in particular have been criticized for having low rates in their sweep options while benefiting from margin loans they make and the spreads they retain from that cash. There have been numerous lawsuits filed over the issue, and companies have responded to the pressure by increasing the rates they pay clients for those cash positions."
They add, "The interest rate for the customer's cash -- as currently discussed by Pershing -- will be 2.25 percent annually, according to the executives, who spoke confidentially to InvestmentNews about the matter. Pershing, however, would not rebate, meaning share, any additional interest it receives from borrowers when it lends the cash, potentially eating into a broker-dealer's profitability. Pershing is currently discussing with its broker-dealer clients about the changes to its cash sweep program and it's not clear when any new plan goes into place."
Finally, they state, "Toward the end of last year, Fidelity told registered investment advisors it would begin default all non-retirement cash to an in-house option in 2025. A subsidiary of The Bank of New York Mellon Corp., Pershing provides trading and clearing services to and works with some of the largest independent broker-dealers in the industry, including Osaic and Cetera Financial Group."
A separate article, "Osaic Is Focus of Latest Cash Sweep Class Action Suit," published on WealthManagement.com, says, "Osaic is the latest firm to face a class action lawsuit targeting its cash sweep practices. In the suit filed in Arizona federal court, plaintiff Robert Gehring argued the firm 'underpaid their customers in violation of their fiduciary duties' by undercutting the interest owed to clients. In some cases, Osaic's rate of interest was as high as five to 21 times the customers' paid rate."
The piece explains, "The suit against Osaic is the latest in an ever-growing number of calls for class actions in the past year that have targeted nearly every major financial services firm, from the wirehouses to independent behemoths like LPL and Ameriprise. According to the suit, New Hampshire-based Gehring was originally a customer of American Portfolios before it was acquired by Advisor Group (later rebranded as Osaic). Like many firms, Osaic runs cash sweep programs for discretionary and non-discretionary accounts.... Osaic offered cash sweep programs through Pershing and National Financial Services, which established and ran deposit programs, including Osaic's Bank Deposit Sweep Program and the Insured Cash Account Program."
It adds, "Last month, the SEC charged Wells Fargo and Merrill Lynch's advisor units with failing to supervise their cash sweep programs. The agency claimed the firms' policies didn't consider clients' best interests when selecting cash sweep options. Merrill and Wells Fargo agreed to pay $60 million to settle the charges collectively. Last year, lawsuits calling for broader class actions related to the firms' cash sweep policies were filed against Wells Fargo, Ameriprise, LPL, UBS, Raymond James and J.P. Morgan (among others). Wells Fargo, Bank of America and Morgan Stanley were among the firms that changed their sweep pricing in response to the scrutiny."
