Our March Money Fund Market Share, with data as of Feb. 29, 2016, shows asset increases for about half of the largest U.S. money fund complexes in the latest month, led by a huge spike by Goldman Sachs assets. Money market funds increased by $37.3 billion overall, or 1.4%, in February, and increased by $59.1 billion, or 2.2%, over the past 3 months. For the past 12 months through Feb. 29, total assets are up $100.4 billion, or 3.9%. The biggest gainer by far in February was Goldman Sachs, which rose by $25.1 billion, or 15.1%. Also increasing were JP Morgan, Western, Federated, SSGA, and Invesco, which rose by $9.1 billion, $5.0B, $3.2B, $2.3B, and $2.2B, respectively. With its jump, Goldman moved into the top 5 MMF managers, displacing Vanguard. (Our domestic U.S. "Family" rankings are available in our MFI XLS product, our global rankings are available in our MFI International product, and the combined "Family & Global Rankings" are available to Money Fund Wisdom subscribers.) In other news, T. Rowe Price set the date on its planned conversion of Prime Reserves to Government, and filed for a name change on another fund.
Goldman Sachs, Fidelity, Federated, Northern, and Schwab had the largest money fund asset increases over the 3 months, rising by $36.5 billion, $15.7B, $10.0B, $9.3B, and $7.8B, respectively. Over the past year through Feb. 29, 2016, Goldman Sachs showed the largest asset increase (up $45.2B, or 31.0%), followed by Fidelity (up $42.8B, or 10.6%), Morgan Stanley (up $22.5B, or 20.4%), SSGA (up $10.0B, or 12.0%), and Northern (up $9.0B, or 10.8%). Other asset gainers for the past year include: Vanguard (up $8.3B, 4.8%), Federated (up $7.5B, or 3.6%), Schwab ($5.9B, 3.6%), BlackRock (up $3.6B, 1.7%), and BofA (up $2.4B, or 4.8%). The biggest decliners over 12 months include: Dreyfus (down $17.1B, or -9.9%), JP Morgan (down $15.3B, or -6.0%), Invesco (down $6.0B, or -9.8%), Deutsche (down $5.1B, or -15.4%), and Western (down $4.0B, or -8.5%). (Note that money fund assets are volatile month to month.)
We asked Goldman about their recent asset gains, but they didn't single out any particular factor or transaction. We'd guess that financial institutions and hedge fund money being pushed out of bank deposits is the culprit, but we can't confirm this. (Note that GSAM recently signed a deal to manage cash holdings for hedge funds -- see our Dec. 17, 2015 "Link of the Day", "GSAM, HazelTree Partner on Hedge Fund Sweep.")
Our latest domestic U.S. Money Fund Family Rankings show that Fidelity Investments remains the largest money fund manager with $447.2 billion, or 16.6% of all assets (down $786 million in February, up $15.7B over 3 mos., and up $42.8B over 12 months). Fidelity was followed by JPMorgan with $238.8 billion, or 8.9% market share (up $9.1B, down $10.4B, and down $15.3B for the past 1-month, 3-mos. and 12-mos., respectively). BlackRock remained the third largest MMF manager with $221.1 billion, or 8.2% of assets (up $1.1B, up $5.4B, and up $3.6B). Federated Investors was fourth with $214.7 billion, or 8.0% of assets (up $3.2B, up $10.0B, and up $7.5B). As we mentioned, Goldman Sachs moved ahead of Vanguard to become the fifth largest MMF manager, with $190.7 billion, or 7.1% of assets (up $25.1B, up $36.5B, and up $45.2B). (Last month, Goldman Sachs had moved up to sixth place from eighth.)
Vanguard fell to sixth place with $181.3 billion, or 6.7%, (up $503M, up $4.1B, and up $8.3B). Schwab ($167.7B, 6.2%) stayed in seventh place, followed by Dreyfus in eighth place with $154.7B (5.7%), Morgan Stanley in ninth place with $132.7B (4.9%), and Wells Fargo in tenth place with $113.7B (4.2%). The eleventh through twentieth largest U.S. money fund managers (in order) include: SSGA ($93.8B, or 3.5%), Northern ($92.3B, or 3.4%), Invesco ($55.2B, or 2.0%), which moved ahead of BofA ($53.3B, or 2.0%), Western Asset ($43.3B, or 1.6%), First American ($39.4B, or 1.5%), UBS ($38.7B, or 1.4%), Deutsche ($28.1B, or 1.0%), Franklin ($23.0B, or 0.9%), and American Funds ($16.3B, or 0.6%), which displaced RBC from the top 20. Crane Data currently tracks 65 U.S. MMF managers, the same number as last month.
When European and "offshore" money fund assets -- those domiciled in places like Dublin, Luxembourg, and the Cayman Islands -- are included, the top 10 managers match the U.S. list, except for Goldman moving up to No. 4 (dropping Vanguard to 6) and SSGA breaking into the top 10. Looking at the largest Global Money Fund Manager Rankings, the combined market share assets of our MFI XLS (domestic U.S.) and our MFI International ("offshore"), the largest money market fund families are: Fidelity ($454.8 billion), JPMorgan ($360.8 billion), BlackRock ($326.3 billion), Goldman Sachs ($278.5 billion), and Federated ($222.9 billion). Vanguard ($181.3B) moved up one spot to sixth, followed by Dreyfus/BNY Mellon ($177.9B), Schwab ($167.7B), Morgan Stanley ($153.7B), and SSGA ($115.0B) round out the top 10. SSGA broke into the top 10, displacing Wells Fargo. These totals include "offshore" US Dollar money funds, as well as Euro and Pound Sterling (GBP) funds converted into US dollar totals.
Finally, our March Money Fund Intelligence and MFI XLS show that both net and gross yields continue to rise in February, after jumping in January. The Crane Money Fund Average, which includes all taxable funds covered by Crane Data (currently 813), rose 2 basis points to 0.11% for the 7-Day Yield (annualized, net) Average, while the 30-Day Yield also went up 2 basis points 0.10%. The Gross 7-Day Yield was 0.38% (up 7 basis points), while the Gross 30-Day Yield was 0.37% (up 6 basis points).
Our Crane 100 Money Fund Index shows an average 7-Day (Net) Yield of 0.21 (up 3 basis points) and an average 30-Day Yield of 0.20% (up from 0.16%). The Crane 100 shows a Gross 7-Day Yield of 0.44% (up 7 basis points), and a Gross 30-Day Yield of 0.43% (up 8 basis points). For the 12 month return through 2/29/16, our Crane MF Average returned 0.04% (up 1 basis point) and our Crane 100 returned 0.07% (up 2 basis points). The total number of funds fell to 1,161, down 6 from last month.
Our Prime Institutional MF Index (7-day) yielded 0.24% (up 4 bps) as of Feb. 29, while the Crane Govt Inst Index was 0.12% (up 2 basis points) and the Treasury Inst Index was 0.09% (up 2 bps). The Crane Prime Retail Index yielded 0.07% (up 2 bps), while the Govt Retail Index yielded 0.03% (unchanged) and the Treasury Retail Index was 0.02% (unchanged). The Crane Tax Exempt MF Index yielded 0.01% (unchanged).
The Gross 7-Day Yields for these indexes in February were: Prime Inst 0.51% (up 6 basis points from last month), Govt Inst 0.35% (up 6 bps), Treasury Inst 0.30% (up 9 bps), Prime Retail (0.43%), Prime Govt (0.30%), Treasury Retail (0.24%), and Tax Exempt 0.08% (down 3 bps). The Crane 100 MF Index returned on average 0.01% for 1-month, 0.04% for 3-month, 0.03% for YTD, 0.07% for 1-year, 0.04% for 3-years (annualized), 0.04% for 5-year, and 1.20% for 10-years. (Contact us if you'd like to see our latest MFI XLS, Crane Indexes file or "Market Share" report.)
In other news, T. Rowe Price set the conversion date for its $6.5 billion Prime Reserve Portfolio to "go Government" in an SEC filing. (See our Aug. 19, 2015 News, "T Rowe Price to Launch Prime Inst MMF; ICI, JPM on Holdings, WAMs," where we wrote that T. Rowe Price was planning to launch a Prime Inst fund and convert Prime Reserves portfolio to Government.) The recent filing sets the conversion date at May 2. It says, "T. Rowe Price has been carefully considering these SEC rule changes and their implications and is crafting responses designed to minimize the impacts on our money fund shareholders. As such, we will introduce changes to our money fund lineup in 2016. While most modifications will have little effect on the majority of shareholders, some will be more noticeable, such as changes to some funds' investment objectives or the suitability of a given fund for certain classes of investors."
It continues, "As for the Prime Reserve Portfolio, we have decided to change its name to Government Money Portfolio, effective May 1, 2016. The portfolio will invest only in government money market securities, and it will not be subject to liquidity fees or redemption restrictions (also known as "gates") that the SEC is mandating for retail and institutional money funds. We expect to provide more detailed information about these and other money fund rule-related changes within the coming months to help shareholders make informed decisions."
Finally, a separate filing says, "Effective August 1, 2016, the T. Rowe Price Summit Cash Reserves Fund will change its name to T. Rowe Price Cash Reserves Fund. The fund intends to qualify as a "retail money market fund" in accordance with amendments to Rule 2a-7 that go into effect on October 14, 2016. The fund's overall investment program will remain unchanged <b:>`_. "Retail money market funds" are required to implement policies and procedures reasonably designed to limit investments in the fund to accounts beneficially owned by natural persons. On or before July 1, 2016, the fund will implement these policies and procedures to limit investments in the fund to accounts beneficially owned by natural persons. On or before September 30, 2016, the fund will, upon advance written notification, involuntarily redeem investors that do not satisfy these eligibility requirements."
