The April issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Friday morning, features the articles: "Ultra-Short Bond Funds Big; Highlights from BF Symposium," which reviews our recent conference and developments in the short-term bond fund sector; "BFS Keynote: Schneider & Mejzak; Fidelity's Pope," which quotes from a couple of featured conference sessions; and, "Worldwide MF Assets at $6T; US Jumps, China Drops in Q4," which talks about the about money fund markets beyond the U.S. We've also updated our Money Fund Wisdom database with March 31 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 March Money Fund Portfolio Holdings are scheduled to ship on Tuesday, April 9, and our March Bond Fund Intelligence is scheduled to go out Friday, April 12.
MFI's "Ultra-Short Bond Funds Big; Highlights from BF Symposium," article says, "Crane's Bond Fund Symposium, our event focusing on the 'enhanced cash' and ultra-short bond fund space, took place recently in Philadelphia, and all signs indicate that the party is still going strong in this sector of the marketplace. Crane Data's Bond Fund Intelligence shows Conservative Ultra-Short Bond Funds grew by 48% (vs. 3% for all bond funds) in the 12 months through 2/28/19, the fastest growth among any bond fund category. We review some of the highlights our recent event below, and we take a closer look at the growth of ultra-short bond fund assets."
It continues, "We also review BFS's 'Senior Portfolio Manager Perspectives' session, which featured PGIM MD of Fixed Income Joseph D'Angelo and J.P. Morgan Asset Management Portfolio Manager & Head of Managed Reserves Dave Martucci. The pair discussed ultra-short funds and investment strategies."
Our BFS Keynote, reads, "This month, BFI quotes from the keynote at our recent Bond Fund Symposium, 'Ultra-Shorts vs. SMAs: Round II,' which featured Rich Mejzak, Managing Director at BlackRock, and Jerome Schneider, Managing Director at PIMCO. Moderator Pete Crane commented, 'We want to talk about both [SMAs and ultra-short funds], since separately managed accounts are a big chunk of the enhanced cash, beyond-money fund marketplace.'"
Schneider commented, "For PIMCO for much of the past 40 years, we were one of the first in the mutual fund space for short term in the ultra-short space and we've evolved that over the past few decades.... The bulk of the $300 billion that we manage is quite honestly in the ultra-short and short term and low duration space. For us, the focal point has always been trying to find client solutions ... products that more precisely fit the demand functions that we're seeing from clients."
He explained, "These include the products that we've introduced over the past decade or so, including our short term ETF MINT which is the largest actively managed ETF.... It's about $12 billion now in size. [Also] our Short Asset Investment Fund, they've really been focused on providing risk adjusted returns, and more importantly a nuanced allocation. So as an example, no derivatives in MINT is something that's actually been a focal point of marketing.... I think the key thing is trying to find the balance between risk and return, and sometimes those are very different things to different people."
Our "Worldwide MF" update says, "The Investment Company Institute released its 'Worldwide Regulated Open-Fund Assets and Flows, Fourth Quarter 2018' late last month, and the most recent data collection on mutual funds in other countries (as well as the U.S.) shows that money fund assets globally rose by $97.1 billion, or 1.6%, in Q4'18, to retake the $6.0 trillion level ($6.076T). The increase was led by big gains in U.S. and Luxembourg-based money funds. Money fund assets in China and France fell sharply. MMF assets worldwide have increased by $176.4 billion, or 3.0%, the past 12 months, and money funds in the U.S. moved up to represent 50.0% of worldwide assets."
The latest MFI also includes the sidebar, "MMF Expenses Up in '18," which reviews a 'Research Perspective' entitled, 'Trends in the Expenses and Fees of Funds, 2018.' It tells us, "The average expense ratios for money market funds rose 1 basis point to 0.26 percent in 2018.... The report shows stock fund expenses averaging 0.55% and bond funds averaging 0.48%." It adds, "Their section on 'Money Market Funds' states, 'The average expense ratio of money market funds rose for the third consecutive year to 0.26 percent in 2018 <b:>`_... The past three years have generally been a reversal from the historical trend in which money market fund expense ratios had remained steady or fallen each year since 1997.'"
A News brief, entitled, "Kiplinger's Says Avoid Sweep Yields," states, 'Kiplinger's Retirement,' says, 'Retirees, Avoid Sweep Accounts With Low Yields,' They write, 'Many major brokerage firms in recent years have eliminated higher-yielding money-market funds as a sweep option, pushing customers into lower-yielding bank sweep accounts.' It adds, 'Brokerage firm Edward Jones eliminated its money-fund sweep option for new brokerage customers in February <b:>`_.'"
Our March MFI XLS, with March 31, 2019, data, shows total assets fell by $10.2 billion in March to $3.292 trillion, after gaining $56.4 billion in February, $14.4 billion in January, and $41.9 billion in December. Our broad Crane Money Fund Average 7-Day Yield rose 2 bps to 2.09% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 2 basis points to 2.27% (its highest level since Oct. 2008).
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA rose 1 basis point to 2.52% and the Crane 100 rose to 2.54%. Charged Expenses averaged 0.43% (unchanged) and 0.27% (unchanged), respectively for the Crane MFA and Crane 100. The average WAM (weighted average maturity) for the Crane MFA and Crane 100 was 31 and 32 days, respectively (unchanged). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
