The July issue of Crane Data's Money Fund Intelligence was sent out to subscribers on Tuesday morning. The latest edition of our flagship monthly newsletter features the articles: MMF Reform Regulations Delayed; Stalemate Part II?," which discusses the delay and possible stalemate of money market reform; "Fidelity's Nancy Prior Says Black Clouds Parting," which summarizes the keynote speech from Fidelity's top money fund leader; and, "State of Money Funds: Highlights of Symposium," which reviews a number of sessions from our recent Money Fund Symposium conference. We also updated our Money Fund Wisdom database query system with June 30, 2014, performance statistics and rankings late Monday night, and will send out our MFI XLS spreadsheet Tuesday a.m. (MFI, MFI XLS and our Crane Index products are available to subscribers at our Content center.) Our June 30 Money Fund Portfolio Holdings data are scheduled to go out on Thursday, July 10.
The latest MFI newsletter's lead article comments, "Though SEC Chair Mary Jo White has repeatedly said Money Market Fund Reforms are coming in the "very near term," recent press reports and discussions among money fund managers and lawyers indicate that it could be months more before we see any final rules. Some are even predicting an indefinite stalemate. We still believe that dropping the floating NAV, or using it only after a threshold is broken, is the only path forward, given the lack of progress with the IRS over 'de minimis' gains issues."
The article explains, "Last month, The Wall Street Journal wrote in "SEC Divided on Money-Market Fund Rules," broke the news that it may be some time before we see money market fund reforms. The Journal article commented, "Six years after money-market mutual funds became a source of vulnerability in the financial crisis, U.S. securities regulators are still hashing out how to limit the risks they pose to the financial system. Tighter rules might not be finalized for several months, according to people familiar with the process.""
Our monthly "profile" piece says, "Nancy Prior, President of Fidelity Investments' Fixed-Income unit, gave the keynote address, entitled, "Money Market Funds: Past and Future," at Crane's Money Fund Symposium, late last month. We excerpt from the text of the speech below. Prior comments, "At long last, it appears we're getting close to the much-anticipated, long-awaited announcement of new money market fund rules from the Securities & Exchange Commission."
She continues, "The skies appear finally to be brightening after what seems like one long, gloomy winter. For the past 5 1/2 years, the money market mutual fund industry has been ... you can pick your metaphor here: Embattled, Under siege, Under a cloud.... Suffice it to say, the past few years have just not been a whole lot of fun. In addition to a very challenging, uncertain regulatory environment, we have had to manage through a prolonged and unprecedented period of extraordinarily low interest rates. Given all of this, it's not surprising that some financial writers predicted that money market mutual funds would not make it through this gauntlet."
The July MFI article on State of Money Funds: Highlights of Symposium explains, "Crane's Money Fund Symposium, held June 23-25 at the Renaissance Boston Waterfront Hotel, featured record attendance with approximately 500 attendees, speakers, and sponsors. It also earned rave reviews for its content, which delved into the major issues on the money fund landscape. Here are some of the highlights."
Crane Data's July MFI with June 30, 2014, data shows total assets decreasing by $13.4 billion (after rising $10.9 billion in May, falling by $59.5 billion in April and $25.9 billion in March) to $2.479 trillion (1,248 funds, down from 1,255 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, unchanged) and 0.16% (Crane 100) on an annualized basis for both the 7-day and 30-day yield averages. (Charged Expenses averaged 0.12% and 0.14% for the two main taxable averages.) The average WAM for the Crane MFA and the Crane 100 were 41 and 43 days, respectively, unchanged from the prior month. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
