Crane Data's latest monthly Money Fund Portfolio Holdings statistics will be published Wednesday, Oct. 9, and we'll be writing our normal monthly update on the Sept. 30 data for Thursday's News. But we also generate a separate and broader Portfolio Holdings data set based on the SEC's Form N-MFP filings, and we posted these to the website yesterday. (We continue to merge the two series, and the N-MFP version is now available via Holding file listings to Money Fund Wisdom subscribers.) Our new N-MFP summary, with data as of Sept. 30, 2019, includes holdings information from 1,099 money funds, representing assets of $3.885 trillion (up from $3.798 trillion last month). We review the latest N-MFP data below.
Our latest Form N-MFP Summary for All Funds (taxable and tax-exempt) shows Repurchase Agreement (Repo) holdings in money market funds totaling $1,231 billion (down from $1,308 billion), or 31.7% of all assets. Treasury holdings total $1,048 billion (up from $916.7 billion), or 27.0%, and Government Agency securities totaled $763.9 billion (up from $723.6 billion), or 19.7%. Holdings of Treasuries, Government agencies and Repo (the vast majority of which is backed by Treasuries and agencies) combined total $3.043 trillion, or 78.3% of all holdings.
Commercial paper (CP) totals $344.8 billion (up from $338.0 billion), or 8.9%, and Certificates of Deposit (CDs) total $254.1 billion (down from $262.0 billion), or 6.5%. The Other category (primarily Time Deposits) totals $145.2 billion (down from $151.1 billion), or 3.7%, and VRDNs account for $98.0 billion (down from $99.2 billion last month), or 2.5%.
Broken out into the SEC's more detailed categories, the CP totals were comprised of: $226.7 billion, or 5.8%, in Financial Company Commercial Paper; $62.1 billion or 1.6%, in Asset Backed Commercial Paper; and, $50.2 billion, or 4.7%, in Non-Financial Company Commercial Paper. The Repo totals were made up of: U.S. Treasury Repo ($756.6B, or 19.5%, U.S. Govt Agency Repo ($424.4B, or 10.9%) and Other Repo ($50.0B, or 1.3%).
The N-MFP Holdings summary for the 214 Prime Money Market Funds shows: CP holdings of $339.0 billion (up from $332.3 billion), or 31.6%; CD holdings of $254.1 billion (down from $257.9 billion), or 23.6%; Repo holdings of $189.0 billion (down from $262.0 billion), or 17.6%; Other (primarily Time Deposits) holdings of $99.4 billion (down from $104.3 billion), or 9.3%; Treasury holdings of $116.9 billion (up from $86.1 billion), or 10.9%; Government Agency holdings of $70.4 billion (up from $66.8 billion), or 6.6%; and VRDN holdings of $5.6 billion (down from $5.7 billion), or 0.5%.
The SEC's more detailed categories show CP in Prime MMFs made up of: $226.7 billion (up from $213.6 billion), or 21.1% in Financial Company Commercial Paper; $62.1 billion (down from $62.6 billion) or, 5.8% in Asset Backed Commercial Paper; and $50.1 billion (down from $56.1 billion), or 4.7% in Non-Financial Company Commercial Paper. The Repo totals include: U.S. Treasury Repo ($68.8 billion, or 6.4%), U.S. Govt Agency Repo ($70.0 billion, or 6.5%), and Other Repo ($50.0 billion, or 4.7%).
In other news, two recent articles discuss the latest entrants in high-yield internet banking and "fin-tech" options. In the first, The Wall Street Journal writes that, "Robinhood Joins the Online Cash War." They explain, "Robinhood Markets Inc. said it would offer a new higher-yielding cash account, in a bid to grow from its commission-free trading roots as bigger rivals scrap trading fees. The brokerage said Tuesday it would offer 2.05% annually on uninvested cash in customers' brokerage accounts, through partner banks, making it the latest fintech to use higher yields on cash to try to win business."
The piece explains, "Robinhood's move comes after Charles Schwab Corp., TD Ameritrade Holding Corp. and E*Trade Financial Inc. last week said they would eliminate commissions for online stock trades -- replicating the fee-free trading pitch that has helped Robinhood amass about 6 millions users since it was founded in 2012. To offer the relatively high yield on cash, Robinhood said it would sweep the money to a network of six partner banks, which in turn pay the interest that Robinhood passes back to customers. Through those partnerships, Robinhood -- which isn't itself a bank -- said it is able to offer Federal Deposit Insurance Corp. protection on as much as $1.25 million in cash for each client."
The Journal article continues, "Fintechs have been trying to move into traditional banking, betting that paying more on cash than many big banks and brokerages would draw new clients and more of existing customers' money. Robo-adviser Betterment LLC in July announced a similar new higher-yield offering, currently paying 2.04% annually on cash, and robo-rival Wealthfront Inc.'s version pays 2.07% annually. Those cash accounts work similarly to Robinhood's, distributing customer cash among partner banks that pay the interest and offer FDIC protection."
Finally, it adds, "Robinhood's new offering comes after a failed attempt late last year, when the firm announced a high-yield feature -- offering 3% on cash at a time when Federal Reserve rates were higher -- that it hadn't cleared with regulators. 'We made mistakes with that announcement, which led us to hit the reset button and start over from scratch,' Robinhood said in a blog post on its website Tuesday.... A Robinhood spokesman declined to comment on how much cash its clients typically have available in their brokerage accounts."
In the other article, American Banker writes about "A battle royal for online deposits." They tell us, "An online war is underway for deposits, as a wide range of players -- big banks, community banks, credit unions, digital-only bank platforms and fintechs -- offer high-interest savings and checking through apps and websites. Competition has hit a fever pitch for several reasons despite two interest rate cuts by the Federal Reserve this year."
