The September issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Tuesday morning, features the articles: "Bad News Good News for MFs; More Prime Changing to Govt," which discusses a confluence of forces that may be driving MMF assets higher; "New IMMFA Chair Reyer Kooy on European MMFs," where we discuss regulations, negative yields, and all things euro money funds with the new Chair of IMMFA; and "MFI International Review: Negative Yields, Regs Loom," an annual look at the largest funds and current trends in European money funds. We have also updated our Money Fund Wisdom database query system with August 31, 2015, performance statistics, and sent out our MFI XLS spreadsheet shortly. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our September Money Fund Portfolio Holdings are scheduled to ship Thursday, Sept. 10, and our September Bond Fund Intelligence is scheduled to go out on Tuesday, Sept. 15. (Note: We also look forward to seeing those of you planning to attend Crane's European Money Fund Symposium, which will take place Sept. 17-18 in Dublin.)
The lead "Bad News Good News” article in MFI says, "It was a pretty good summer for money market mutual funds, all things considered. Assets increased for the 4th month in a row, climbing back to almost $2.7 trillion for the first time since January 2015. With the market turmoil, it even felt a little like the pre-crisis good old days, when bad news for the rest of the world was good news for money funds."
The piece continues, "However, changes ahead of next year's Money Fund Reforms continue, as small and even mid-sized fund companies either announce that their prime funds are "going government" or that they're exiting the space entirely. We review flows and the latest fund reform-related changes below. (See our Link of the Day on the latest liquidations, Forward Funds and Eaton Vance.)"
Our latest "profile," "New IMMFA Chair Reyer Kooy," reads, "This month, we profile the new Chair of the Institutional Money Market Fund Association, Reyer Kooy. Kooy, the Head of Institutional Liquidity Management, EMEA and Asia business for Deutsche Asset & Wealth Management, replaces Jonathan Curry who served as IMMFA Chair for the past three years. Kooy comes aboard in a challenging environment for money funds in Europe, as the industry faces negative yields and the likelihood of substantial reforms. But he remains optimistic about the future."
MFI asks, "When did you become Chair?" Kooy responds, "I was elected to become Chairman of IMMFA in June of this year for a two year term. Previously I was an IMMFA board member and Treasurer of the association for the preceding three years. IMMFA has been around for more than 15 years and is focused on the European CNAV money market fund industry specifically. I've personally been involved with the money fund industry twelve years."
We also ask, "What has been IMMFA's main focus?" Kooy says, "Regulation has been the main focus of the association over the last two to three years. We focus on making the case for money market funds in general, but also for constant NAV. We are keen to share our knowledge and insights with the decision makers of the European regulatory process. Regulations will be a prime focus going forward as well as the yield environment. These two key items are of crucial importance to our members and therefore to IMMFA."
The third article, "MFI International Review," says, "The European money market fund industry is in the midst of extreme challenges and major changes as it endures a negative yield environment and braces for a regulatory overhaul. With Crane's 3rd annual European Money Fund Symposium taking place next week (Sept. 17-18) in Dublin, we thought it would be a good time to take a look at the latest trends in Europe -- including assets, largest funds and fund managers, WAMs, yields, and others. The two big themes are -- assets are down and yields have gone negative, and continue to drop, in Europe."
It adds, "Total international or "offshore" money market fund assets in US dollar, euro, and sterling stand at USD $686 billion through August 31, according to our Money Fund Intelligence International -- down $69 billion since the end of 2014. The bulk of that total, $372 billion, is in USD denominated funds, while L147 billion is in Sterling, and E76 billion is in Euros. Year-to-date through 8/31, USD MMFs are down $12B, Sterling MMFs are down $5B, and Euro MMFs are down E15B. In the second quarter, assets dropped sharply among Euro funds. Sterling funds fell 10.3% in Q2, while USD funds were relatively stable."
We also write in MFI's "News" briefs about "Yet More Money Fund Liquidations," saying, "Forward Funds (US Govt MMF) and Eaton Vance are the latest managers to give up on the money fund space. (See today's Link of the Day for details.) Municipal fund liquidations also continue with Dreyfus Basic Muni MMF liquidating and Western Asset Institutional AMT Free Municipal MMF merging into Western Asset Inst Tax Free Reserves. (Dreyfus Basic NY Muni MMF and Dreyfus NY AMT-Free Muni MMF will also liquidate 10/28/15.)
Our September MFI XLS, with August 31, 2015, data, shows total assets rising by $7.2 billion in August, after rising $52.4 billion in July and $15.5 billion in June. YTD, MMF assets are down by $55.2 billion, or 2.1% (through 8/31/15). Our broad Crane Money Fund Average 7-Day Yield and 30-Day Yield remained at 0.02%, while our Crane 100 Money Fund Index (the 100 largest taxable funds) remained at 0.04% (7-day). On a Gross Yield Basis (before expenses were taken out), funds averaged 0.16% (Crane MFA, same as last month) and 0.20% (Crane 100, unchanged from last month). Charged Expenses averaged 0.14% and 0.16% (unchanged) for the two main taxable averages. The average WAMs (weighted average maturities) for the Crane MFA and the Crane 100 were 33 and 36 days, respectively, both down 3 days from last month. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
