The April issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Friday morning, features the articles: "Conservative Ultra-Shorts Big Draw at Bond Symposium," which recaps our recent Bond Fund Symposium conference in Boston, "J.P. Morgan's Przybylski on Prime, Rates, Repatriation," which "profiles" the Executive Director, Head of Global Liquidity Product Development & Strategy for J.P. Morgan Asset Management and, "Private Liquidity Funds Focus of SEC Paper, CAG's Pan," which reviews recent papers on this little noticed segment of the money markets. We have also updated our Money Fund Wisdom database query system with March 31, 2017, performance statistics, and sent out our MFI XLS spreadsheet Friday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our April Money Fund Portfolio Holdings are scheduled to ship Tuesday, April 11, and our April Bond Fund Intelligence is scheduled to go out Friday, April 14.
MFI's "Conservative Ultra-Shorts" lead article says, "Crane Data recently hosted its first Bond Fund Symposium conference in Boston, and the turnout and enthusiasm of attendees confirmed what many had thought, that the ultra-, ultra short or "conservative" ultra-short bond fund sector is one of the hottest and fastest-growing in the mutual fund industry. We briefly review some of the highlights from the sessions and recent news on this growing segment below."
The piece continues, "Bond Fund Symposium's Keynote, "The Time Is Now for Short‐Term Strategies," featured PIMCO's Jerome Schneider, who gave an excellent overview of the short-term space and PIMCO's dramatic growth in this area. (Assets in their ultra-shorts have increased from under $4 billion before the crisis to over $18 billion currently.) He urged attendees to redouble efforts to educate investors on the benefits of ultra-short bond funds."
Our JPMAM profile reads, "This month, Money Fund Intelligence spoke with Paul Przybylski, Executive Director, Head of Global Liquidity Product Development & Strategy for J.P. Morgan Asset Management, and we also include a couple of comments from some other members of the JPMAM team. We discussed recent trends in the global money markets, including the gradual shift back into Prime money funds in 2017 and how the pending European money fund reforms will affect how you should think about cash investments. JPMAM is the 3rd largest U.S. money fund manager and the 2nd largest MMF manager globally with over $250 billion in US assets and another $150+ billion in Europe and elsewhere. Our Q&A follows."
MFI says, "Tell us about your history and the current team at JPMAM. Przybylski comments, "I started working in the space as Chief Operating Officer and Chief Financial Officer for the J.P. Morgan Global Liquidity business around three years ago. Prior to that, I was CFO for the Global Fixed Income & Liquidity business for four years. Over the past three years, I was involved in various strategic projects, which included, among other things, product development and working directly with JD [John Donohue, CEO, Asset Management Americas and Head of Global Liquidity] and the team."
He adds, "The current Liquidity team includes: John Tobin, Global Head of Liquidity Portfolio Management; Dave Martucci, Global Head of Managed Reserves Strategy; Paula Stibbe, Global Head of Sales across Money Market Funds, Managed Reserves, and Short Duration Strategies; Jimmie Irby, Heads of Credit Risk Administration; and, Ted Ufferfilge, Head of Global Short-Term Fixed-Income Client Portfolio Managers."
Our "Private Liquidity Funds" update explains, "Two new papers review "Private Liquidity Funds," a little noticed segment of the money markets which recent SEC Statistics estimate at over $500 billion. The SEC's paper, "Private Liquidity Funds: Characteristics and Risk Indicators," says in its "Abstract," "At the end of 2015, $534 billion in assets were held by private liquidity funds or managed in their parallel accounts that follow similar investment mandates as money market mutual funds (MMFs), but are unregistered. Limited information is publically available about these funds that are in AUM terms roughly a quarter of the size of institutional MMFs. This white paper characterizes these private liquidity funds using data from Form PF and compares them to MMFs."
It continues, "The SEC also published, "Private Funds Statistics, Second Calendar Quarter 2016," which says, "This report provides a summary of recent private fund industry statistics and trends, reflecting data collected through Form PF and Form ADV filings. Form PF information provided in this report is aggregated, rounded, and/or masked to avoid potential disclosure of proprietary information of individual Form PF filers." (Note: Crane Data believes that the majority of these funds are securities lending reinvestment cash, and these "private liquidity funds" are not the same as some new ones that are being marketed to corporate investors.)"
In a sidebar, we discuss, "JP Morgan, BlackRock Say Time to Come Back to Prime," saying, "J.P. Morgan Asset Management and BlackRock published briefs urging investors to reconsider Prime money market funds. JPM's lead piece, entitled, "Capitalizing on the prime opportunity," and subtitled, "A fresh look at the case for prime money market funds (MMFs)," explains, "SEC amendments to Rule 2a-7 have spurred growing demand for government MMFs, resulting in a move away from prime MMFs. However, growing confidence in the operational stability of prime funds -- along with increasingly attractive spreads — is gearing up to entice investors back again."
Our April MFI XLS, with March 31, 2017, data, shows total assets decreased $25.2 billion in March to $2.741 trillion after increasing $51.5 billion in February, and decreasing $38.6 billion in January. Our broad Crane Money Fund Average 7-Day Yield was up 12 bps to 0.41% for the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 13 bps to 0.61% (7-day).
On a Gross Yield Basis (before expenses were taken out), the Crane MFA rose 0.11% to 0.81% and the Crane 100 rose 12 bps to 0.88%. Charged Expenses averaged 0.40% and 0.27% for the Crane MFA and Crane 100, respectively. The average WAM (weighted average maturity) for the Crane MFA was 33 days (down 2 days from last month) and for the Crane 100 was 35 days (down 2 days from last month). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
