Last week, the New England AFP (Association for Financial Professionals) hosted their Annual Conference in Boston, and no fewer than 8 of the sessions focused on cash investing and money market mutual funds. Crane Data attended and exhibited, as did most of the major institutional money fund providers. (The spring conference season of regional Treasury management shows continues next week in Chicago with the Windy City Summit and the following week with the New York Cash Exchange, respectively.) The main topics involved in many of the presentations we saw (and people will see over the next few weeks) included whether investors will return to Prime money funds in force, which of the alternatives to Prime are gaining traction or poised to bring in assets, and a number of other cash management and investing topics. We review some of the sessions below, and we also remind people to register ASAP for next month's Money Fund Symposium (June 21-23 in Atlanta).
In the first NEAFP session, "Managing Short Term Investments in the New Cash Paradigm," RBC Global's Brandon Swenson said that "Prime funds have lost critical scale." He discussed the benefits of SMA's and warned attendees about ratings and fixed income ETFs. He cited SMA benefits: Potential higher returns, portfolio transparency, greater portfolio control, diversification, scheduled and flexible liquidity, and infrastructure to simplify accounting and custody.
Swenson said when asked about investors' time horizons, "If it's unknown and you may need it, it has to be in that first [Govt MMF] bucket." He added, "The future of cash investing is evolving.... Government funds will maintain market share gains. Prime funds will be a niche, and innovation is difficult under existing rules." Swenson also mentioned that on fees and gates, there could be further reform. "We could see some relief there."
The second session, with Fitch Ratings' Ian Ramusson & Treasury Strategies Tony Carfang, was entitled, "Cash Management Tune-Up." Carfand said, "There may be an opportunity for a rollback" of money fund regulations. He also expressed dismay at those calling the building of corporate cash "hoarding." The bill to roll back the floating NAV in Prime Institutional money funds was recently re-introduced in the Senate (SIII7) and in the House (HR2319). "Until the corporate voice is heard, these bills may be stuck." But, he added, "This bill could get some traction," given its support among PA, OH, MI and WI representatives.
Another session, "Where Do We Go From Here? Liquidity Management in a Post Reform Environment," which featured Goldman Sachs' Pat O'Callaghan and Larry Walsh and Dell's Jamie Cortas, asked "Is it time to go back into Prime?" O'Callaghan commented that Prime fund "NAV's have moved higher, but they can move lower." He discussed the new "Trilemma" of "Stability, Liquidity, and Yield," saying, "You can get 2 out of 3, its very hard to get all 3."
Finally, he added, "When you look at cash [last year], [it was] driven by absolute change. A lot of those drivers were around the gates and fees." Now, however, "It's more about fund size and NAV's and not about the gates; fees." Watch for more coverage of the NEAFP in coming days.
In other news, we're making final preparations for next month's Crane's Money Fund Symposium, which will take place June 21-23, 2017 at The Hyatt Regency Atlanta, in Atlanta, Ga. Money Fund Symposium is the largest gathering of money market fund managers and cash investors in the world. Last summer's event in Philadelphia attracted a record 575 attendees, and we expect a similar turnout for our upcoming show. Symposium participants include money fund managers, marketers and servicers, cash investors, money market securities dealers, issuers, and regulators. Visit www.moneyfundsymposium.com) for more details. Registration for attendees is $750, and hotel reservations are still available. We review the agenda and conference details below. (Click here to see the full brochure.)
Money Fund Symposium's agenda kicks off with the keynote, "The Elevation of Money Market Funds," featuring Martin Flanagan, President & CEO of Atlanta-based Invesco. The rest of the Day One agenda includes: "Private Money Funds, SMAs and ETFs," with Deborah Cunningham of Federated Investors and Rich Mejzak of BlackRock; "Corporate Investment & Issuance Issues," with Treasury Strategies' Tony Carfang, and AFP's Tom Hunt; and, "Major Money Fund Issues 2017," featuring Jeff Weaver of Wells Fargo, Tracy Hopkins of Dreyfus/BNY Mellon CIS, and Pat O'Callaghan of Goldman Sachs A.M.. (The opening evening's reception will be sponsored by Bank of America Merrill Lynch.)
Day 2 of Money Fund Symposium 2017 begins with "The State of the Money Fund Industry, with Peter Crane of Crane Data, Rick Holland of Charles Schwab, and Alex Roever of J.P. Morgan Securities. The rest of Day Two features: "Senior Portfolio Manager Perspectives," including John Tobin of J.P. Morgan A.M., Jeff Plotnik of First American Funds, and Rob Sabatino of UBS Asset Management; "Government and Treasury Money Fund Issues," with Mike Bird of Wells Fargo Funds and Marques Mercier of Invesco; "Muni & Tax Exempt Money Fund Issues" with Fidelity's John Vetter and Dreyfus' Colleen Meehan.
The Afternoon of Day 2 (after a Dreyfus-sponsored lunch) features: "Dealer & Issuer Panel: Looking at Supply," moderated by Laurie Brignac of Invesco, with Stewart Cutler of Barclays, Ron Flynn of J.P. Morgan Securities, and Rob Crowe of Citi Global Markets; "Ratings Agency Roundtable: Criteria, Risks, NAVs," with Robert Callagy of Moody's Investors Service, Greg Favilevich of Fitch Ratings, and Guyna Johnson of S&P Ratings; "MMFs in Ireland, France & China," with Reyer Kooy of IMMFA, Alastair Sewell of Fitch Ratings, and Jonathan Curry of HSBC Global AM; and, "Brokerage Sweep Options & Issues" with Ted Hamilton of Promontory Interfinancial Network and Sunil Kothapalli of the Wells Fargo Advisors. (The Day 2 reception is sponsored by Barclays.)
The third day of Symposium features: "Strategists Speak '17: Rising Rates & Fed RRP" with Rob Zambarano of Guggenheim Securities, Mark Cabana of Bank of America Merrill Lynch, and Garrett Sloan of Wells Fargo Securities; "Treasury & Agency Supply Outlook," with John Dolan of the U.S. Dept. of Treasury, Dave Messerly of the FHLBanks Office of Finance, and Dan Davis of CastleOak Securities; and, the "Pros & Cons of Ultra-Short Bond Funds" with Kerry Pope of Fidelity and Morten Olsen of Northern Trust AM. Finally, the last session is entitled, "Money Fund Trading, Technology & Data," with Peter Crane presenting on the latest money fund information tools, and featuring Sabrina Hartzog of Citi on the portal marketplace, and Jason Anderson of Investortools on money fund trading and compliance software.
We hope you'll join us in Atlanta next month! We'd like to encourage attendees, speakers and sponsors to register and make hotel reservations ASAP. (Note that the conference attendee list will only be given out to those staying at the conference hotel.)
Also, we'll be hosting Crane's 5th annual "offshore" money fund event, European Money Fund Symposium, in Paris, Sept. 25-26, 2017. This website (www.euromfs.com) is now live. (Contact us to inquire about sponsoring or speaking.) Finally, our next Money Fund University "basic training" event is tentatively scheduled for Jan. 18-19, 2018, in Boston. Watch www.cranedata.com in coming months for more details on these events, or visit the bottom of our "Content" page for past and future conference materials.
