The December issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Monday morning, features the articles: "Assets Flat 4th Year in a Row; Prime Exodus Begins, Lineups," which says MMF assets are flat again in 2015 and discusses the latest Prime to Govt moves; "BlackRock's Henderson & Erbeck on Tax-Exempt MMFs," where we interview BlackRock's Muni money market team; and "Tax Exempt MFs Hit by Ultra-Low Yields; Will Any Go Inst?," which reviews recent trends in the municipal money market. We have also updated our Money Fund Wisdom database query system with Nov. 30, 2015, performance statistics, and sent out our MFI XLS spreadsheet earlier. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our December Money Fund Portfolio Holdings are scheduled to ship Wednesday, December 9, and our December Bond Fund Intelligence is scheduled to go out Monday, December 14.

MFI's lead "Assets Flat 4th Year" article says, "As the year winds down, money fund assets continue their second half rebound. For the fourth year in a row, MMFs fell by about 5% in the first half of the year, then recovered all of the deficit to end the year slightly positive. Assets are now flat YTD in 2015. Meanwhile, changes continue as more managers announce lineup tweaks and assignments, and a major chunk of assets shifts from Prime to Government. We review 2015 and the latest reform-related moves below."

It continues, "Following a surge in October, money fund assets inched higher in November, up $3.5 billion. Assets have increased in 9 out of the last 11 weeks, hitting their highest levels of 2015. Below, we show assets over the past 5 years, and on page 2 we show historical MMF asset levels. Overall, assets have increased in five of the last 6 months. The only month that showed a decline was September, when assets were down $​5.​1 billion. Assets are currently at their highest levels of 2015 and appear poised to move higher in December, particularly if the Federal Reserve raises interest rates at its Dec. 15-16 FOMC meeting, as expected."

Our latest MFI "profile," reads, "This month, Money Fund Intelligence interviews BlackRock’s William Henderson, Managing Director & Lead Portfolio Manager on the Municipal Liquidity Portfolio Team, and Jack Erbeck, Managing Director & Municipal Credit Analyst. BlackRock manages about $9.2 billion in Tax-Exempt money fund assets, including the $2.5 billion BIF Tax Exempt MF and the $1.4 billion BlackRock MuniFund. (BlackRock is also poised to almost double its Tax-Exempt MMF assets once it acquires BofA’s cash business in April 2016.) Henderson has been running Tax-Exempt money funds for BlackRock since 1993, and Erbeck has been a credit analyst supporting Tax-Exempt funds since 1999. We discuss recent events in the Tax-Exempt or Municipal money markets below."

We ask, "MFI: How long has BlackRock been running Tax-Exempt cash? Henderson: Our flagship Tax Exempt money market fund, the BlackRock Muni Fund, began operations in 1980. We have a variety of Tax-Exempt funds -- the BlackRock Liquidity Funds, the BlackRock Institutional Funds, and the BlackRock retail funds. They are all managed here in Princeton, where we conduct tax-exempt fund portfolio management and credit research. It’s all part of Blackrock’s $110 billion municipal platform. MFI: What is your biggest priority currently? Henderson: My number one priority is to keep the client and fiduciary responsibility front-and-center for the team."

The "Tax-Exempt MMF" article says, "While Taxable money fund assets have held steady the past 5 years, Tax Exempt MMFs have not fared as well. Tax-Exempt MMFs total $244.6 billion, down almost 50% from Dec. 2008 when the zero yield environment began, and down 23% over the past 5 years. (Assets peaked at over $500 billion in Aug. 2008.) We briefly review this sector below, and we discuss recent designations fund companies have made in the Tax-Exempt space. Also, though taxable MMFs have seen some relief of late, yields in the Municipal money markets continue making record lows. Crane’s Tax Exempt MF Index remains at 0.01%, down from 0.91% at year-end 2008."

We also review the month's lineup change announcements in a sidebar entitled, "Managers Firm Up Lineups." It says, "BlackRock, Federated, Dreyfus, and Invesco all made announcements recently that provide a clearer picture of how their money fund lineups will look after MMF reforms take effect in October 2016. Federated further laid out its Institutional offerings, designating four -- Federated Money Market Management, Prime Obligations, Prime Value Obligations, and Tax-Free Trust."

Our December MFI XLS, with Nov. 30, 2015, data, shows total assets increasing $3.5 billion in November after increasing $56.5 billion in October, declining by $9.4 billion in September, rising $7.2 billion in August, and jumping $52.4 billion in July. YTD, MMF assets are flat, down by just $8.4 billion, or 0.3% (through 11/30/15). Our broad Crane Money Fund Average 7-Day Yield rose by one bps to 0.03%, while our Crane 100 Money Fund Index (the 100 largest taxable funds) remained at 0.05% (7-day).

On a Gross Yield Basis (before expenses were taken out), funds averaged 0.18% (Crane MFA, same as last month) and 0.22% (Crane 100, up one bps). Charged Expenses averaged 0.16% (up one bps) and 0.17% (unchanged) for the two main taxable averages. The average WAMs (weighted average maturities) for the Crane MFA was 33 days (down 3 days from last month) and for the Crane 100 was 35 days (down one day). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

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