ICI's Antoniewicz Defends MMFs
ICI Chief Economist Shelly Antoniewicz posted a response to the recent Wall Street Journal column, "Your Money-Market Fund Is Ripping You Off." Her LinkedIn Post says, "Some recent media reports are trying to make the claim that money market funds (MMFs) are a bad deal for investors, accusing them of overcharging investors -- a 'king's ransom' as one reporter describes it. But such reports do not hold water. First, for years, when interest rates were low, most MMFs waived their fees to protect investor returns. In 2021, for example, 97% of MMF managers offered fee waivers, allowing retail investors to earn some yield despite near-zero rates. In other words, for several years managers charged a fee of 0% -- nothing -- and instead absorbed the costs on behalf of investors. Given this fact, it is unconscionable for the press to claim that investors are getting 'ripped-off' on their money market funds." Antoniewicz writes, "Second, now that rates have risen and stayed higher, those waivers are being phased out -- returning MMFs to normal operations. These reports would like readers to think these normal operations represent an unreasonable level of fees. But the fact is that annual expense ratios of MMFs have declined over the last 20 years and are less than expense ratios for other mutual funds. For some reason, the press wishes to play down these numbers." She adds, "Third, let's not forget that the primary reason investors are moving their money into MMFs is that MMFs offer superior returns. As of April 2025, government MMFs offered an average net yield of 4.10%, much higher than the measly 0.62% for money market deposit accounts in banks. We should celebrate, not denigrate, the ability of MMFs to offer investors such good value. Bottom line: MMFs offer liquidity, stability, and low cost, competitive returns. They remain strong value for investors."
