The October issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "Prime MFs Clawing Back Two Years After Reform's 'Big Sort'," which looks at how Prime assets have fared of late; "Highlights from European MFS: Irish Funds' Rooney," which quotes a recent presentation from Irish Funds' Pat Rooney; and, "China, Ireland Still Dominate Global Money Fund Ranks," which reviews the latest statistics on money fund markets outside the U.S. We've also updated our Money Fund Wisdom database with Sept. 30 statistics, and sent out our MFI XLS spreadsheet Monday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our October Money Fund Portfolio Holdings are scheduled to ship on Wednesday, October 10, and our Oct. Bond Fund Intelligence is scheduled to go out Monday, October 15.
MFI's "Prime MFs Clawing Back" article says, "Two years after the SEC's Money Fund Reforms triggered a $1.1 trillion shift out of Prime money market funds and into Govt, Prime assets continue to extend a slow and steady recovery. While assets dipped in the latest month (Sept.), Prime MMFs are up $170 billion, or 30.3%, since hitting their low of $562 billion on 10/31/16."
It continues, "Year-to-date through Aug. 31, the SEC shows Prime MMF assets up $66 billion, or 10.0%, to $733 billion, and up $91 billion, or 14.2%, over 12 months. Govt MMF assets are down $49 billion, or -2.1%, YTD and up just $62 billion, or 2.8% over 12 months."
Our "EMFS Highlights" excerpt reads, "Crane Data hosted its 6th annual European Money Fund Symposium two weeks ago in London, and European Money Market Fund Reforms took center stage. Below, we highlight from one the sessions, 'Irish & European Fund Issues' featuring Pat Rooney, Senior Regulatory Affairs Manager at Irish Funds. He presented a number of statistics on money funds domiciled in Ireland, the largest segment of the European money fund industry, and gave an Irish take on the new regulations and the fate of the RDM, reverse distribution mechanism."
Rooney says, "Firstly, the MMF industry in Ireland is one of very significant scale.... We're talking about E490 billion in terms of assets ... the largest domicile by quite some margin in Europe, followed by France and Luxembourg. There has been significant growth ... in the past 5 years dating back to 2013, with 77% growth since then. So it is a very strong and growing industry in Ireland."
He continues, "The number of funds stands at 115 today; that is down slightly from 122 in 2012. So while the assets have been growing, there has been a slight amount of consolidation in the industry. This is an industry of scale.... We have quite a few big players with very big funds, so there is a lot of concentration. But also there is also still broad diversity, too. We've counted 48 MMF managers ... from 11 countries."
Rooney tells us, "Predominantly the managers in funds of scale are coming from the U.S., the U.K. and Germany. This industry accounts for 20% of our [overall fund] assets. So it is an industry that is vital to Irish Funds and one that we have fought vigorously to defend throughout the MMF reform, which hasn't been easy, in order to ensure that this is a sector that can continue to thrive." (Watch for more Rooney and European Money Fund Symposium excerpts in coming weeks, or see the latest issue of MFI for the full article.)
MFI's "China, Ireland" piece says, "The Investment Company Institute's 'Worldwide Regulated Open-Fund Assets and Flows, Second Quarter 2018' shows that money fund assets globally fell by $135.6 billion, or -2.2%, in Q2'18, led by big drops in Chinese and French money funds. Money funds in the U.S. and India rose substantially. MMF assets worldwide have increased by $632.8 billion, or 11.9%, the past 12 months."
ICI's release says, "On a US dollar denominated basis, ... bond fund assets decreased by 2.9 percent to $10.25 trillion in the second quarter ..., while money market fund assets decreased by 2.3% globally to $5.96 trillion."
Also, MFI includes a sidebar, "ESMA Seeks Feedback on European MF Stress Testing," which says "A statement posted Friday and entitled, 'ESMA consults on stress testing rules for money market funds,' tells us, 'The European Securities and Markets Authority (ESMA) has today opened a public consultation on how European money market funds (MMFs) should conduct their internal stress testing."
Our October MFI XLS, with Sept. 30, 2018, data, shows total assets inched up by $1.6 billion in September to $3.072 trillion, after increasing $29.2 billion in August, increasing $36.3 billion in July, and decreasing $49.9 billion in June. Our broad Crane Money Fund Average 7-Day Yield rose 8 bps to 1.69% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was also up 8 bps to 1.88% (its highest level since Oct. 2008).
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA rose 7 bps to 2.13% and the Crane 100 rose to 2.16%. Charged Expenses averaged 0.44% (unchanged) 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 was 30 and 31 days, respectively (up 1 day). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
