The September issue of Crane Data's Money Fund Intelligence was sent out to subscribers Monday morning. The latest edition of our flagship monthly newsletter features the articles: "MMF Assets Jump in August; SEC Reforms Loom in 10/16," which discusses how MMF assets have increased since new regulations were passed; "IMMFA's Susan Hindle Barone on MMFs in Europe," our monthly "profile" with the Secretary General of the Institutional Money Market Fund Association; and, "MFI Intl Review: Sterling, USD MFs Gain; Euro Down," which looks at assets, market share, and trends among "offshore" money market funds. We also updated our Money Fund Wisdom database query system with August 31, 2014, performance statistics, and sent out our MFI XLS spreadsheet this morning. (MFI, MFI XLS and our Crane Index products are available to subscribers via our Content center.) Our August 31 Money Fund Portfolio Holdings are scheduled to go out on Wednesday, Sept. 10.
The latest MFI newsletter's lead article comments, "When the Securities & Exchange Commission adopted money market fund reforms on July 23rd -- and subsequently posted in the Federal Register on August 14 -- there was an expectation among many that the new rules would result in outflows from money market funds. But here we are, about a month and a half later, and we haven't seen any yet. In fact, there have actually been inflows into money market funds, and more specifically, prime institutional MMFs, since July 23. Of course, the new rules have not yet kicked in and won't until October 2016. But still, it's a development that not everyone expected, given the level of concerns about the SEC proposal."
Our monthly "profile" featuring IMMFA's Susan Hindle Barone. "Tell us about the history of IMMFA? How long have you been promoting money funds? IMMFA was set up in 2000. The original thought behind it was, some standardization would be good for the product in the sense that if investors were more familiar with what money funds were, what they represent, than it would be good for the product overall. A lot of the people that were involved then are involved today. Some of the original members are people like Peter Knight and David Hynes; Mark Hannam was involved back then; so was Jonathan [Curry]. So it's a good gang of people. Back in 2000, I was working at Goldman Sachs on the short-term debt desk, but I knew of them. I've only been working for them since June of 2012."
She continued, "We have been hugely focused on the regulatory debate. IMMFA only represents CNAV triple A rated funds yet there's a possibility that they just won't exist in two years, so we're very conscious of that. We've also been thinking about what does IMMFA represent? Does it represent the short term fund industry? Does it represent the funds that are CNAV? Does it represent only Europe? Does it represent anything to do with short-term investing? We've been throwing around a lot of ideas of what we think IMMFA should do and what people want it to do. Does it exist on a standalone basis? Are there other trade associations out there that cover our space but not with the same focus? It's definitely still evolving. We can't really come to any conclusions until we know what the regulations are going to look like."
The September MFI article on international money market trends says, "With Crane's 2nd Annual European Money Fund Symposium just around the corner, we thought we'd look at the international money fund management landscape -- from largest managers, to largest funds, to the regulatory environment. Of course, the international money market industry will be discussed in depth at the Euro Symposium, which will be held Sept. 22-23 at the Hilton London Tower Bridge in London, England. Visit www.euromfs.com for more details."
Crane Data's September MFI with August 31, 2014, data shows total assets increasing $40.1 billion (after decreasing by $20.9 billion in July and decreasing by $20.6 billion in June) to $2.499 trillion (1,245 funds, 7 more than 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 42 and 45 days, respectively, unchanged from the prior month. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
Finally, last-minute preparations are being made for our European Money Fund Symposium, which will take place Sept. 22-23 in London at the Hilton London Tower Bridge. Though there has been no word from European regulators and the newly elected European Parliament has yet to even commence, we expect them to eventually craft legislation similar to the SEC's. This will be a main topic of discussion at Euro MFS, along with other issues impacting Euro, Sterling, USD and "offshore" money market funds domiciled in Dublin, Luxembourg and other European and global financial centers.
