The October issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Monday morning, features the articles: "Institutional Money Funds Now Driving Flows; Yields Sink," which reviews the surge in money fund assets starting back in April; "European MF Symposium in Ireland Focuses on Future," which excerpts from the Irish Funds and IMMFA EMFS Sessions; and, "Worldwide Assets Hit Record $6.2T: US Jumps, China Falls," which discusses asset growth in 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 September Money Fund Portfolio Holdings are scheduled to ship on Wednesday, Oct. 9, and our Oct. Bond Fund Intelligence is scheduled to go out Monday, Oct. 14.
MFI's "Inst Money Fund," article says, "We've been discussing the surge in money fund assets repeatedly since April, when assets began climbing following normal annual tax outflows. Assets continue to grow strongly, but the composition of the growth has shifted since earlier in the year. Whereas Retail flows were faster in 2018 and in early 2019, Institutional assets have now become the main engine for money fund asset growth."
It continues, "Crane Data's MFI totals show that assets overall rose by $80.2 billion in September to $3.786 trillion, after rising by $84.2 billion in August. Institutional MMFs increased by $51.5 billion, while Retail MMFs rose by $30.3 billion. Government & Treasury money funds are now also growing faster than Prime MMFs; they were up $36.4 billion and $28.9 billion, respectively, vs. Prime’s $16.4 billion increase last month."
Our European MFS summary reads, "Crane Data recently hosted its 7th annual European Money Fund Symposium in Dublin, Ireland, which was once again the largest gathering of money market professionals in Europe. We quote from some of our keynote presentations below. The first featured Patrick Rooney, Senior Regulatory Affairs Manager of Irish Funds, which represents funds domiciled in Ireland, while the second featured Institutional Money Market Funds Association Chair Kim Hochfeld and new IMMFA Secretary General Veronica Iommi."
It writes, "Rooney's speech, 'Money Market Funds in Ireland,' told attendees, 'Assets [of money funds domiciled in Ireland] are at E491 billion. There's been significant growth since 2014 and more modest growth more recently. We are fast approaching the E500 billion mark, so half a trillion in assets. It's a very significant MMF industry here, third in the world after the USA and China. Ireland has further cemented its position as the lead MMF domicile in Europe with Luxembourg next and France rounding out the top three locations."
He continued, "Retail is tiny.... We have new data from the Central Bank of Ireland which indicates that 57% of the assets ... are held by U.K. investors.... The next biggest segment is the U.S. and then Ireland. It's unusual for Ireland to feature so prominently in the investor base given the cross-border international nature of our investment funds. That is largely [due] to the presence of some very large U.S. multinationals here who are using the MMFs."
Our "Worldwide" update says, "The Investment Company Institute's 'Worldwide Regulated Open-Fund Assets and Flows, Second Quarter 2019' report shows that money fund assets globally rose by $32.5 billion, or 0.5%, in Q2'19, to a record $6.192 trillion. The increase was driven by big gains U.S.-based money funds, but money fund assets in China plummeted. MMF assets worldwide have increased by $230.2 billion, or 3.9%, the past 12 months, and money funds in the U.S. now represent 52.0% of worldwide assets."
It adds, "ICI's release says, 'Worldwide regulated open-end fund assets increased 2.9% to $51.43 trillion at the end of the second quarter of 2019, excluding funds of funds…. On a US dollar-denominated basis, equity fund assets increased by 2.9% to $22.72 trillion.... Bond fund assets increased by 4.4% to $11.10 trillion ... while money market fund assets increased by 0.5% globally to $6.19 trillion.'"
The latest MFI also includes the News Brief, "House Stable NAV Bill Filed Again." It tells us, "Wisconsin Representative Gwen Moore (D-WI-4) recently filed H.R.4492, the 'Consumer Financial Choice and Capital Markets Protection Act of 2019,' the latest bill in the House of Representatives that attempts to restore the $1.00 NAV for all money funds) <b:>`_."
A second MFI News Brief titled, "Blackstone Buying Promontory, reads, "We learned from the private-equity website PE Hub that, 'Blackstone Group is buying Promontory Interfinancial Network for $2.5 billion.' The piece explains, 'Launched in 2002, Promontory provides technology-based services to banks to help them retain large-dollar relationships. The ... fintech supplies balance sheet management as well as deposit allocation services to 3,000 financial institutions.' Promontory runs the CDARS (certificate of deposit account registry service) and IND (insured network deposits) programs. Promontory is one of the largest networks servicing the $1.5 trillion brokerage sweeps market."
Our August MFI XLS, with Sept. 30, 2019, data, shows total assets rose by $80.2 billion in September to $3.786 trillion, after rising $86.9 billion in August, $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 1.67% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 13 basis points to 1.81%.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA fell 12 basis points to 2.08% and the Crane 100 fell to 2.08%. 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 31 and 34 days, respectively (up one day for both the Crane MFA and Crane 100). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
