The May issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Wednesday morning, features the articles: "Money Funds Shift Away from Treasuries; Stablecoins Step In," which discusses recent portfolio composition shifts in the MMF space; "ICI 2025 Fact Book Shows Money Fund Trends in '24," which looks at ICI's latest stats on the fund industry; and, "Charles Schwab Q1 Earnings Discuss Sweeps, Higher Cash" which reviews Schwab's Q1 earnings. We also sent out our MFI XLS spreadsheet Wednesday a.m., and we've updated our Money Fund Wisdom database with 4/30/25 data. Our May Money Fund Portfolio Holdings are scheduled to ship on Friday, May 9, and our May Bond Fund Intelligence is scheduled to go out on Wednesday, May 14.
MFI's "Money Funds Shift" article says, "Fidelity Investments published a rare Money Market Monthly Commentary titled, 'Inflated Uncertainties.' It states, 'In addition to the uncertain interest rate path, our funds are also experiencing a decline in money market eligible supply as the Treasury navigates the constraints on their issuance program as a result of having reached the debt ceiling earlier this year. Treasury Bills declined by $212 billion during the month of March to a total outstanding amount of $6.155 trillion. Going forward we anticipate further declines of Treasury Bill supply until a resolution is reached on the debt ceiling.'"
It continues, "A recent J.P. Morgan 'JPM Mid-Week US Short Duration Update' includes a 'March holdings update: MMFs lean on ON RRP.' It says, 'Last month, MMFs navigated through an environment where demand exceeded supply, with flows into MMFs totaling $41bn and net T-bill issuance falling by over $200bn in response to Treasury hitting the debt ceiling. As a result, both government and prime funds reduced their T-bill holdings by $155bn collectively, bringing total allocations to approximately $2.2tn, and redirected the cash primarily to the Fed's ON RRP. Combining that with the typical quarter-end technical factors amid counterparty constraints between dealers and MMFs, balances at the ON RRP among MMFs increased by $147bn month-over-month to $347bn. MMFs continue to be the largest participant at the ON RRP facility, comprising 87% of usage.'"
We write in our ICI Fact Book article, "The Investment Company Institute released its '2025 Investment Company Fact Book,' 'A Review of Trends and Activities in the Investment Company Industry.' The latest edition tells us, 'With stock markets rising across the globe in 2024 (24% in the United States and 10% in the Asia-Pacific region) worldwide total net assets of equity funds, which invest primarily in publicly traded stocks, increased by 12% to $35.7 trillion at year-end 2024. Bond funds -- which invest primarily in fixed-income securities -- saw their total net assets increase 7% over the same period, somewhat reflecting total returns (capital gains and interest income) on bonds in Europe and the Asia-Pacific region of 3% and 7%, respectively. Net assets of money market funds, which are regulated funds restricted to holding short-term, high-quality debt instruments, also increased substantially."
It states, "Discussing 'Worldwide' mutual funds (page 18), ICI writes, 'Worldwide net sales of money market funds remained robust in 2024, totaling $1.5 trillion, unchanged from 2023.... Investors across all geographical regions continued to demonstrate demand for money market funds, with the United States accounting for more than half of total net inflows. Investor demand for money market funds in the United States and Europe was $920 billion and $239 billion in 2024, respectively. Additionally, in the Asia-Pacific region, money market funds experienced net inflows of $336 billion in 2024.'"
Our "Schwab" piece says, "Charles Schwab reported Q1'25 earnings and hosted its '2025 Spring Business Update' recently. CFO Mike Verdeschi tells us, 'Transactional cash levels continue to reflect normalized cash behaviors inclusive of organic growth, seasonality and investor sentiment. And we made additional progress on reducing the level of bank supplemental funding to approximately $38 billion, down more than 60% from peak levels.'"
The article continues, "He explains, 'In terms of rates, the outlook for 2025 remains dynamic with the forward curve moving between three to four 25 basis point cuts to the Fed’s target rate versus the one cut assumed back in January for our financial scenario.'"
MFI also includes the News brief, "Assets Decline in April on Taxes." It says, "ICI's 'Money Market Mutual Fund Assets' show assets falling $4.1 billion to $6.908 trillion in the week ended April 30. MMF assets are up by $907 billion, or 15.1%, the past 52 weeks (through 4/30/25), with Inst MMFs up $470 billion, or 13.1% and Retail MMFs up $437B, or 18.1%. Our MFI XLS shows assets down $26.6 billion in April to $7.307 trillion.
Another News brief, "Ramirez Liquidates Money Fund; Schwab Changes Value Advantage to Prime Advantage Money Fund," tells readers, "A filing for Ramirez Government Money Market Fund (Retail Class, RMZXX and Institutional Class, RAMXX), states, 'The Board ... upon a recommendation from Ramirez Asset Management ... has determined to close and liquidate the Fund immediately after the close of business on April 29, 2025. This decision was made due to the Fund's inability to obtain a level of assets necessary for it to be viable."
A third News brief says, "The WSJ Claims 'Your Money-Market Fund Is Ripping You Off." They write, "Cash is king. If only you didn't have to pay a king's ransom to hold it.... Money-market mutual funds -- the most convenient form of cash for most investors -- have stayed stable while providing steady income that has cushioned the damage in other markets. Yet money-market funds are surprisingly expensive, and a recent attempt to make them cheaper has been stymied."
A sidebar, "Federated Q1 Earnings," says, "Federated Hermes reported Q1'25 earnings and hosted its Q1'25 earnings call late last month. On the call, President & CEO J. Christopher Donahue, comments, 'We ended Q1 with record assets under management of $840 billion, driven by record money market assets of $637 billion.... We reached another record-high for money market assets at the end-of-the quarter, $465 billion and total money market assets of $637 billion. Total money market assets increased by about $7 billion in the first quarter as money funds added $3.2 billion and money market separate accounts added $3.6 billion.'"
Our May MFI XLS, with April 30 data, shows total assets fell $26.6 billion to $7.307 trillion, after decreasing $4.6 billion in March, but increasing $90.4 billion in February, $47.9 billion in January, and $113.0 billion in December. Assets jumped $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 last May.
Our broad Crane Money Fund Average 7-Day Yield was down 2 bps to 4.02%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 2 bps to 4.13% in April. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 averaged 4.39% and 4.40%. Charged Expenses averaged 0.37% 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 4/30/25 on Thursday, 5/8.) The average WAM (weighted average maturity) for the Crane MFA was 34 days (unchanged) and the Crane 100 WAM was down 2 day from the previous month at 34 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
