The May issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Tuesday morning, features the articles: "Prime Comeback Strengthens; Crane Data Hits Lucky 13 Yrs," which reviews the explosive recent growth in the Prime and particularly Prime Retail sector; "ICI's 2019 Fact Book Goes Global w/MMF Commentary," which excerpts from the Investment Company Institute's annual compilation; and, "More Green MMFs: SSGA Files for ESG Money Fund," which reviews the filing for the industry's third environmentally-correct money fund. We've also updated our Money Fund Wisdom database with April 30 statistics, and sent out our MFI XLS spreadsheet Tuesday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our May Money Fund Portfolio Holdings are scheduled to ship on Thursday, May 9, and our May Bond Fund Intelligence is scheduled to go out Tuesday, May 12.
MFI's "Prime Comeback," article says, "While talk of a recovery in Prime money funds was mostly wishful thinking in the first year and a half following 2016's Money Fund Reforms, that's no longer the case. Prime is back, bigtime. Prime MMFs have grown by $119.7 billion, or 16.4%, YTD, and $190.1 billion, or 28.9%, over 12 months (through 4/30/19). (Note: This is after we removed the addition of the new $108 billion American Funds Central Cash Fund.)"
It continues, "Prime Retail MMFs led the charge last year, but Prime Inst MMFs have since joined in. Prime Retail assets have increased by $41.9 billion (12.3%) YTD to $382.6 billion, and they've exploded by $125.6 billion (48.9%) over the past 12 months. Prime Inst have gained $77.8 billion year-to-date (or 20.1%) to $573.7 billion. (The total includes the new American fund but the gain figures do not.)"
Our ICI Fact Book piece reads, "The Investment Company Institute released its '2019 Investment Company Fact Book,' an annual compilation of statistics and commentary on the mutual fund industry. Subtitled, 'A Review of Trends and Activities in the Investment Company Industry,' the latest edition reports that equity funds again saw outflows, bond fund inflows slowed, and money market funds had their strongest inflows in almost 10 years in 2018 ($159 billion). Overall, money funds assets were $3.037 trillion at year-end 2018, making up 17% of the $17.7 trillion in overall mutual fund assets. Retail investors held $1.187 trillion, while institutional investors held $1.850 trillion. We excerpt from the latest 'Fact Book' below."
ICI writes, "Worldwide net sales of money market funds totaled $78 billion in 2018, a decrease from the $598 billion in net sales in 2017, driven mostly by a sharp decrease in net sales in the Asia-Pacific region. Money market funds in the Asia Pacific region had net outflows of $99 billion in 2018 after experiencing $404 billion in net inflows in 2017." (See pages 18-21 in the PDF Fact Book.)
They explain, "Investor demand for Chinese money market funds accounts for much of the net sales of money market funds in the Asia-Pacific region. Eighty percent of Asia-Pacific's total net assets in money market funds were held in funds domiciled in China at year-end 2018. Demand for money market funds in China weakened substantially in 2018 as the spread between money market fund yields and those on bank savings deposits narrowed from 3.1 percent at year-end 2017 to 1.9 percent at year-end 2018. In 2018, money market funds in the Asia-Pacific region saw net outflows of $99 billion compared with net inflows of $404 billion in 2017."
Our "SSGA ESG" update says, "As we reported via our CraneData.com Daily News recently, State Street Global Advisors (SSGA) has filed to launch State Street ESG Liquid Reserves Fund, which will soon become the third environmental or 'green' money market fund in the marketplace. This follows the conversion of a DWS MMF into DWS ESG Liquidity Fund late last year and the launch of BlackRock Liquid Environmentally Aware Fund (LEAF) earlier this year. (Note: We just added LEAF to MFI this month.) The pending Prime Institutional SSGA fund will have the following share classes: Institutional Class ($25M minimum), Administration Class ($1K), Investment Class ($25M), Investor Class ($10M), Premier Class ($250M)."
The latest MFI also includes the sidebar, "SEI N-CR Filing Minor," which says, "The first 'Form N-CR' filing of 2019 was recently disclosed for the SEI Daily Income Trust Treasury Fund, which received a 'Capital Contribution' from adviser SEI Investments Management Corporation. The March 2019 filing is in the nominal amount of $56,455, and explains the reason as, 'The support, in the form of a capital contribution, related to the Treasury Fund's historical losses. While the amount of the losses did not increase recently, more recent redemptions in the Treasury Fund have caused the historical losses to become more material to the net asset value than when the Fund had greater assets."
Our April MFI XLS, with April 30, 2019, data, shows total assets rose by $105.7 billion in April to $3.412 trillion (this includes the addition of a new $108 billion fund, American Funds Central Cash), after falling $10.2 billion in March, gaining $56.4 billion in February, and gaining $14.4 billion in January. Our broad Crane Money Fund Average 7-Day Yield rose to 2.10% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 1 basis points to 2.26%.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA fell 1 basis point to 2.52% and the Crane 100 fell to 2.53%. 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 29 and 31 days, respectively (down 1 and 2 bps, respectively). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
