The November issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Thursday morning, features the articles: "Portal Wars: Fund Managers Add to Competition in Space," which reviews the latest in online money market portals; "J.P. Morgan A.M. Enters Portal Market w/Morgan Money," which discusses JPMAM's recent changes and initiatives; and, "Reversal of Fortunes: Yields Plunge in '19 After '18 Jump," which discusses the recent decline in yields. We've also updated our Money Fund Wisdom database with Oct. 31 statistics, and sent out our MFI XLS spreadsheet Thursday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our November Money Fund Portfolio Holdings are scheduled to ship on Tuesday, Nov. 12, and our Nov. Bond Fund Intelligence is scheduled to go out Thursday, Nov. 14.
MFI's "Portal Wars" article says, "Online money market trading portals, which have quietly become the major distribution channel for Institutional money market funds, are seeing new entrants and major changes for the first time since the 'transparency' battles following the financial crisis. Last year, we saw BlackRock buy Cachematrix and Parthenon Capital invest in ICD Portal. But now we're seeing J.P. Morgan Asset Management enter the space (see our story at right) and Goldman and others branch out and become 'platforms' instead of 'portals'."
It continues, "On a recent podcast, Morgan Stanley Investment Management's Rick Wilkinson comments, 'Let's look at the portal landscape first. That was one of the first technologies that was introduced that really helped the corporate treasurer in their day to day activities. It allowed them to go to one spot to place all of their investments instead of having to go to each of the fund families independently.'"
Our J.P. Morgan A.M. piece reads, "J.P. Morgan Asset Management recently unveiled some major changes in the liquidity space, including launching its own 'portal' and going 'ESG' with its entire fund lineup. The company also released the latest results of its annual corporate investor survey."
A press release entitled, "J.P. Morgan Launches New Liquidity Management Platform, Morgan Money," tells us, "J.P. Morgan Asset Management ... announced the launch of Morgan Money, a new institutional investing platform to replace the firm's existing Global Cash Portal. The platform delivers a real-time dashboard to invest, a single access point for operations, and enhanced risk management controls."
Paula Stibbe, Global Head of Liquidity Sales, comments, "Morgan Money is designed to deliver a seamless customer experience, centered on operational efficiency, end-to-end system integration, and effective controls. The platform was designed for clients, by clients -- embedding their needs and priorities into its core capabilities and functionality."
Our "Yields Plunge" update says, "A year ago, we wrote the story 'Money Fund Yields Break 2.0%; Still Going Higher.' What a difference a year makes. The about-face in short-term yields is unprecedented. The average money fund yield, as measured by our Crane 100, hit 2.01% a year ago on 10/31/18, its first time above 2.0% in 11 years. Yields then peaked at 2.27% in March 2019, and they’re now 1.67% (10/31/19). Yields fell 14 bps in October, and we're still digesting the latest Fed move."
It adds, "Last week, the Federal Reserve Board cut interest rates for the third time in the past three months, lowering its Federal funds target rate range to 1.50-1.75 percent.... As the money markets digest the Fed's 3rd cut, yields on money market funds, bank deposits and brokerage sweeps continue to inch lower."
The latest MFI also includes the News brief, "Money Fund Assets Break $3.5 Tril." It tells us, "ICI's latest 'Money Market Fund Assets' report show totals broke above $3.5 trillion for the first time since September 2009 and have increased by $466.0 billion, or 15.3%, year-to-date. Over the past 52 weeks, ICI's money fund asset series has increased by $629 billion, or 21.8%, with Retail MMFs rising by $249 billion (22.8%) and Inst MMFs rising by $380 billion (21.2%)."
A second News piece, "Local Govts Lobby for Stable NAV," reads, "As we mentioned in our Oct. 3 Link of the Day, 'Stable NAV Bill Filed in House Again,' efforts are again underway to roll back the last round of money market fund reforms and to return the $1.00 NAV for all money funds. Bills have again been filed in the House and Senate, and the lobbying has begun."
Our November MFI XLS, with Oct. 31 data, shows total assets rose by $85.2 billion in October to $3.873 trillion, after rising $80.2 billion in September, $86.9 billion in August and $78.1 billion in July. Our broad Crane Money Fund Average 7-Day Yield fell to 1.53% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 14 basis points to 1.67%.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA fell 14 basis points to 1.94% and the Crane 100 fell to 1.93%. 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 33 and 36 days, respectively (up two days for both the Crane MFA and Crane 100). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
