The Wall Street Journal published, "Will a Rate Rise Reach Money-​Fund Investors?." It says, "Few areas of finance have as much riding on the Federal Reserve'​s interest-​rate decision this week as the $​2.​7 trillion money-​market-​fund industry. While interest rates have been near zero, asset managers including Charles Schwab Corp. and Federated Investors Inc. have waived more than $​30 billion worth of fees on their money funds over the past six years to keep expenses from eating up the funds' yields and taking a bite out of investors’ principal. If the Federal Reserve raises interest rates -- which could happen as soon as Thursday -- asset managers will need to decide how to divvy up the funds' increased interest income between reinstating fees and passing along higher yields to return-​starved investors. "My guess is that half of the first rate hike won'​t be passed through to consumers, because it will go to unwinding these fee waivers," said Peter Crane, president of Crane Data LLC, a Westborough, Mass., firm that tracks money-​market-​fund assets. It continues, "Some share classes of Federated'​s institutional funds no longer have waivers, so all of a rate increase could flow through to those investors, said `​Deborah Cunningham, chief investment officer for money markets at the Pittsburgh-​based company. "It won'​t happen immediately, but will filter through over a month, with 60% of the increase expected in the first week, and the remainder happening over the rest of the month," she said.... Assuming the Fed raises rates in quarter-​point increments, that latter group would see a benefit with a second Fed move, she said, and by a third move all waivers should be gone. Asset managers have been forgoing much of their usual fees for running the funds because with interest rates so low, charging the full fees would cause the funds' share price to fall below the steady $​1 a share they aim to maintain." The WSJ piece adds, "Charles Schwab alone waived $​168 million in fees during the second quarter, on top of $​184 million in the first quarter and $​2.​01 billion over the three years through 2014. Money-​fund sponsors have gotten a bit of relief this year. Slight increases in some short-​term rates in the marketplace have allowed companies to scale back waivers.... Federated pointed to the reduced waivers -- costing it $​22.​2 million in the second quarter compared with $​29.​6 million in the same period a year earlier -- as a major reason its second-​quarter revenue rose by 7% from a year earlier. T. Rowe Price Group and Northern Trust Corp. also reported lower waivers.... Asset managers are anxious to claim the lion'​s share of that to help cover costs incurred due to regulatory changes that were put in place after the 2008 credit crisis, Mr. Crane said. In a recent conference call with analysts, Charles Schwab executives said they were looking for a resumption of higher fees on the more than $​150 billion Schwab clients hold in money funds to help generate revenue to support the company'​s growth plans. Investors in money funds with the lowest usual fees -- and thus either small or no waivers currently -- will see the biggest and most immediate benefit from rising interest rates. That could mean bigger gains for investors in institutional money-​market funds, which typically charge lower fees than funds for individuals."

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