"The Return of Money Fund Fees"
Friday's Bond Buyer featured, "The Return of Money Fund Fees". It says, "Money market funds are taking advantage of higher short-term interest rates the past few months to reclaim some of the management fees they have been waiving to avoid negative yields. The $2.8 trillion money fund industry is generating more cash via the types of short-term instruments it invests in, from variable-rate demand debt to floating-rate paper tied to the London Interbank Offered Rate. While nearly all funds continue to waive some portion of their fees, thanks to higher yields those portions are getting smaller. The average money fund now charges fees of 0.27% of assets, compared with 0.23% in the first quarter, according to iMoneyNet." The piece quotes Thomas Gibbons, CFO of Bank of New York Mellon, from a recent conference call, "There's actually a little more yield in money market funds, and therefore a little more fees for us." (See Crane Data's July 26 News "Light at the End of Tunnel? Fee Waivers Retreating, Outflows Halting".) Bond Buyer explains, "In reporting their results for the second quarter, many of the biggest money fund complexes indicated that the boost in short-term yields had allowed them to restore some of their management fees. Federated, Schwab, Northern Trust, and BNY Mellon all mentioned lower fee waivers in their second-quarter reports."
