The March issue of Crane Data's Money Fund Intelligence was sent out to subscribers on Friday morning. The latest edition of our flagship monthly newsletter features the articles: "Commissioners Push Alternatives in Reform Debate," which reviews recent SEC comments on pending regulations; "Federated Investors Debbie Cunningham," which interviews Federated's CIO for Global Money Markets; and, "Cash Breaks $10 Trillion; Deposits Continue Surging," which reviews the continued growth in bank deposits. We also updated our Money Fund Wisdom database query system with Feb. 28, 2014, performance statistics and rankings last night, and we sent out our MFI XLS spreadsheet earlier. (MFI, MFI XLS and our Crane Index products are available to subscribers at our Content center.) Our February 28 Money Fund Portfolio Holdings data are scheduled to go out on Tuesday, March 11.
The latest MFI newsletter's lead article comments, "After SEC Chair White indicated last month that completing money fund regulatory reforms is a "critical priority for the Commission in the relatively near term of 2014," several other SEC Commissioners have weighed in on the topic in recent speeches. Commissioner Michael Piwowar told the Wall Street Journal that he advocated letting investors choose between a floating NAV and a gates and fees option, while Commissioners Gallagher and Stein blasted and defended the FSOC, respectively. Meanwhile, meetings and lobbying over the pending regulations continues."
As we wrote in our March 4 CraneData.com News , "The Journal commented late last week: As U.S. securities regulators move to finalize long-awaited rules aimed at reducing risks to the $2.7 trillion money-market mutual-fund industry, one official wants investors to have greater choice in the types of funds in which they can invest."
The "profile" with Federated's Cunningham says, "This month MFI interviews Federated Investors' Executive VP & CIO for Global Money Markets Deborah Cunningham. Our Q&A follows. MFI: Tell us about your history. Cunningham: From Federated's perspective, we've been involved in running cash since the beginning of time. We now have the oldest registered money market fund on the books of the SEC, Federated Money Market Management. It has 40+ years of history at this point. We ran cash before we even had funds, so we had risk-averse strategies from the very beginning."
Cunningham's intro continues, "As far as our historical involvement in the money fund industry, we've been involved in every step of the process, from the original exemptive orders that led to amortized cost, to the first go-round of 2a-7, to the '92 amendments, the '96 amendments, the 2010 amendments, etc.... I started at Federated in 1981, and began in our accounting department. I moved in to the Investment Management and began actively involved in the team management process for the money funds in 1986." (Watch for excerpts of this interview later this month, or write us to request the full article.)
The February MFI article on Cash Breaking $10 Trillion explains, "The latest Federal Reserve statistics show that bank deposits, the main competitor of money funds and main beneficiary of the financial crisis, continue to surge, even following last year's expiration of unlimited FDIC insurance. Overall cash, including bank deposits (in banks and thrifts), money fund assets and small time deposits, broke above the $10 trillion level late last year for the first time in history."
Crane Data's March MFI with Feb. 28, 2014 data shows total assets falling by $44.9 billion (after rising by $561 million last month) to $2.574 trillion (1,238 funds, the same number as last month. Our broad Crane Money Fund Average 7-Day Yield and 30-Day Yield remained at a record low 0.01% while our Crane 100 Money Fund Index (the 100 largest taxable funds) yielded 0.02% (7-day and 30-day). On a Gross Yield Basis (before expenses were taken out), funds averaged 0.13% (Crane MFA, down one bps) and 0.16% (Crane 100) on an annualized basis for both the 7-day and 30-day yield averages. (So Charged Expenses averaged 0.12% and 0.14% for the two main taxable averages.) The average WAM and WAL for the Crane MFA and the Crane 100 were 45 and 47 days, respectively, unchanged from last month. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
