The September issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Monday morning, features the articles: "Sweeps Get Messy: Fidelity vs. Schwab; Lawsuit," which reviews the recent attention around money funds vs. FDIC sweeps; "FIS SGN's Vogel & Borchardt on Portals, Tech and Reforms," which profiles the portal formerly named SunGard; and, "MFI Intl Shows Euro Assets Jumping Despite Negative," which discusses assets and issues in "offshore" or European money market mutual funds. We've also updated our Money Fund Wisdom database with August 31 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 September Money Fund Portfolio Holdings are scheduled to ship on Wednesday, Sept. 11, and our Sept. Bond Fund Intelligence is scheduled to go out Monday, Sept. 16.
MFI's "Sweep," article says, "August was a crazy busy month in the brokerage 'sweep' space. Brokerages were cutting rates in reaction to the Fed's July rate cut, then Fidelity decided to hike its rates and advertise one of the only remaining money fund sweep options available. An ad war, which we termed 'Cash of the Titans,' ensued between Fidelity and Charles Schwab. Then, finally, the month was capped off by a sweep lawsuit against Merrill Lynch."
It continues, "Following an incomprehensible press release from Fidelity saying new accounts would sweep to its money fund, the two brokerage giants traded full page ads in The Wall Street Journal and New York Times. (Fidelity points out a 1.80% rate on SPAXX vs. low sweep rates for Schwab, and Schwab touting its higher-yielding position money fund.) Fidelity has also been running TV commercials (on CNBC and on ABC's Evening News)."
Our FIS SGN profile reads, "This month, Money Fund Intelligence interviews FIS SGN's Vice President of Product Management Mike Vogel and FIS SGN's Short-Term Cash Management Product Manager Matt Borchardt. We discuss the online money market fund trading portal's history, their latest developments and overall market issues. Our Q&A follows."
MFI says, "Give us a little history." Vogel responds, "FIS is a leading provider of technology and solutions for merchants, banks and capital markets around the world. We focus on scale and an have extensive portfolio of solutions to help our clients connect and securely manage their operations. FIS continues to grow both organically and through acquisitions including SunGard in 2015 and our most recent acquisition, WorldPay, which closed in July 2019, bringing us to 55,000 employees in 48 countries."
Borchardt adds, "Our FIS SGN Short-Term Cash Management (STCM) Portal started with a SunGard acquisition in 2002 and we have been growing and expanding it ever since with a mission to serve treasury managers by adding efficiency in any way possible. Today, STCM provides access to 257 unique funds and other investments across 45 fund families processing over $4T in transactions each year."
Our "MFI Intl" update says, "Crane Data's latest MFI International shows assets in 'offshore' or European money market mutual funds rising sharply in the latest month through August 30. These U.S.-style funds, domiciled in Ireland or Luxemburg and denominated in US Dollars, Sterling and Euro, increased by $5.8 billion to $847.2 billion the past month, but they're up by $1.2 billion YTD."
It continues, "Offshore USD money funds rose $2.1 billion the past month and they're up $5.7 billion YTD. Euro funds jumped E10.4 billion to break into the black YTD, up E6.2 billion. GBP funds jumped by L11.6 billion during August, are they are up by L13.9B YTD. U.S. Dollar (USD) money funds (175) account for over half ($459.6B, or 54.3%) of our 'European' money fund total, while Euro (EUR) money funds (78) total E105.2B (13.3%) -- their highest level since 2011 -- and Pound Sterling (GBP) funds (103) total L223.3 billion (32.1%)."
The latest MFI also includes the News Brief, "Assets Up $500 Billion Over 1Yr." It tells us, "Money fund assets have risen in 18 out of the past 20 weeks and past 14 months in a row. ICI's new 'Money Market Fund Assets' report shows that MMF totals have increased by $316 billion, or 10.4%, year-to-date. Over the past 52 weeks, ICI's series has increased by $500 billion, or 17.5%, with Retail MMFs rising $224 billion (21.3%) and Inst MMFs rising $276 billion (15.2%). Crane Data's broader series shows assets rising $86.9 billion to break $3.7 trillion ($3.709T) level in August."
Our August MFI XLS, with Aug. 31, 2019, data, shows total assets rose by $86.9 billion in June to $3.709 trillion, after rising $78.1 billion in July, $40.0 billion in June and $91.1 billion in May. Our broad Crane Money Fund Average 7-Day Yield fell to 1.82% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 19 basis points to 1.93%.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA fell 17 basis points to 2.23% and the Crane 100 fell to 2.20%. Charged Expenses averaged 0.41% (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 30 and 33 days, respectively (up one day for the Crane MFA and two days for the Crane 100). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
