The April issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "Fed Hikes Again; MMF Yields Climb to 1.5%, Top MFs Hit 2%," which discusses the steady climb in MMF yields; "A Look at the New J.P. Morgan Inst Tax-Free MMF," which interviews JPMAM's Nick Rabiecki, Greg Dabrowski, and Paul Przybylski; and, "Bond Fund Symposium in LA: Ultra-Short Gets Even Hotter," which reviews highlights from our recent bond fund conference. We've also updated our Money Fund Wisdom database with March 31, 2018, 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 on Tuesday, April 10, and our April Bond Fund Intelligence is scheduled to go out Friday, April 13.

MFI's "Fed Hikes" article says, "Money fund yields jumped over the past month rising by 23 bps to 1.47% on average (as measured by our Crane 100). Our broader Crane MF Average rose 21 bps to 1.27%. The top-yielding MMFs are poised to break the 2% level over the next couple of days, the first time a money fund has yielded 2.0% since October 2008. While repatriation, Libor, and a number of other topics have been on money fund professionals’ mind of late, we think higher yields will soon become the story of 2018."

Our lead piece continues, "As expected, on March 14 the Federal Reserve raised short-term interest rates 1/4-point to the range of 1.5% to 1.75%, their sixth increase since December 2015 and first of 2018. The hike, along with higher T-bill and Libor-linked rates, is pushing money market fund rates higher."

MFI's latest Profile reads, "This month, MFI interviews several members of J.P. Morgan Asset Management's Tax Exempt Money Market Fund team. We speak with Portfolio Managers Nick Rabiecki and Greg Dabrowski, as well as Global Head of Product Strategy and Development Paul Przybylski, and discuss the tax-exempt MMF segment and the recent launch of J.P. Morgan Inst Tax-Free Money Market Fund."

MFI asks, "How long has JPMorgan been running cash? Tell us about your history. Rabiecki responds, "J.P. Morgan launched their first money market fund in 1987. Currently, J.P. Morgan Asset Management has approximately $1.7 trillion in AUM, around 30% of which is in our Global Liquidity strategy. I'm the head of the Municipal Liquidity trading desk within Global Liquidity, which currently has approximately $20 billion in AUM. I have more than 30 years of experience in the industry and have been at JPMAM for almost 25 years."

Dabrowski says, "I am a portfolio manager and trader on the Municipal Liquidity trading desk. I've been at JPMAM for 8 years and have been in the Global Liquidity business for more than 5 years. Together, Nick and I have over 30 years of combined experience managing municipal money market funds at JPMAM. Some of the funds in our municipal fund lineup even predate our employment."

MFI asks, "What's the biggest challenge in the municipal market today?" Rabiecki answers, "The biggest challenge we see is that supply has been limited by the historically low interest rates of the last decade. This low rate environment has encouraged municipal issuers to utilize the bond market for much of their issuance as opposed to issuing short-dated or variable rate debt. This, coupled with some regulatory restrictions with regards to tax-exempt issuance, have combined to reduce the supply available for purchase."

Our "BFS Recap" article says, "Our 2nd annual Bond Fund Symposium, which was held in Los Angeles recently, brought together fund professionals focused on the red-hot conservative ultra-short bond space. (Just don't call it, 'enhanced cash.') We review some of the highlights below. (Watch for more coverage in our April Bond Fund Intelligence too.)"

It continues, "The opening 'State of the Bond Fund Marketplace' session, featuring Crane Data's Peter Crane and the Investment Company Institute's Sean Collins, set the stage for the day and a half event. Crane commented, "We're going to talk primarily about ultra short issues, but we're going to discuss bond fund issues in general and try to address a number of hot topics in the overall market."

He adds, "Bond funds in general seem like a tale of two industries ... the best of times, the worst of times. We're going to talk about flows, which have been absolutely gigantic and magnificent. But at the same time, we're going to talk about trends of passive versus active and expense ratios and fees being crushed and compressed. And, of course, looming higher rates pose a threat to all of that."

Our April MFI XLS, with March 31, 2018, data, shows total assets decreased $52.6 billion in March to $2.975 trillion, after increasing $37.2 billion in February, decreasing $54.3 billion in January, and increasing $57.9 billion in December. Our broad Crane Money Fund Average 7-Day Yield was up 21 basis points to 1.27% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 23 bps to 1.47%.

On a Gross Yield Basis (7-Day) (before expenses were taken out), the Crane MFA rose 21 bps to 1.71% and the Crane 100 rose 23 bps to 1.75%. Charged Expenses averaged 0.45% and 0.28% (unchanged), respectively for the Crane MFA and Crane 100. The average WAM (weighted average maturity) for the Crane MFA and Crane 100 were both 31 days (up 2 days from last month). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

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