The January issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Wednesday morning, features the articles: "Highlights of '19: Assets Grow 20%; Inst, ESG Big Stories," which discusses the biggest cash stories of 2019; "BlackRock's Callahan Talks Cash, Tech, 2020," which profiles BlackRock's Global Head of Cash Management Tom Callahan; and, "Top Money Funds of 2019; 11th Annual MFI Awards," which writes about the top-performing money funds of 2019. We've also updated our Money Fund Wisdom database with Dec. 31 statistics, and sent out our MFI XLS spreadsheet Wednesday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our January Money Fund Portfolio Holdings are scheduled to ship on Friday, Jan. 10, and our Jan. Bond Fund Intelligence is scheduled to go out Wednesday, Jan. 15.
MFI's "Highlights of '19" article says, "Money fund assets jumped by over 20% in 2019, their fastest growth since 2008 (and one of the biggest years ever), even as yields retreated due to three cuts in the Federal funds target rate. Prime funds and retail MMFs continued their recovery, but heavier inflows were seen by Government and Institutional money funds. And unlike in 2018, money funds didn't benefit from declines in stocks and bonds. Below, we take a look at the highlights of 2019, and also provide a brief outlook for 2020."
It continues, "Crane Data's numbers showed assets rose by $707.7 billion, or 22.0%, to end just shy of $4.0 trillion ($3.992 trillion) in 2019. The SEC's MMF statistics collection, which is slightly larger than Crane Data's but released later, will likely show assets breaking $4.0 trillion in 2019. ICI's narrower asset collection settled at $3.632 trillion, up by $584 billion, or 19.2%."
Our "BlackRock" piece reads, "This month, we interview Tom Callahan, BlackRock's Global Head of Cash Management. We discuss a number of issues in the money market fund space, including the outlook for 2020, technology, ESG, European money funds and more. Our Q&A follows."
MFI says, "Give us some history. Callahan responds, "BlackRock's Cash business is actually older than BlackRock itself. You can trace our history back to 1973 when TempFund was launched by Provident National Bank. In '95, when PNC made an investment in BlackRock, they merged their entire fixed income business, including their money funds, into BlackRock. Cash has been a core, critical part of BlackRock’s franchise since the firm was founded."
He continues, "For my own history, I came to BlackRock in 2013, by way of Merrill Lynch and the New York Stock Exchange. When I joined, the Cash management industry was plagued by zero interest rates, outflows and fee waivers. Back then, BlackRock's cash management business had roughly $250 billion. Now, 5 1/2 years later, we have enjoyed terrific growth, much of it organic. As we announced in our last earnings report, in mid-2019 we crossed our long-term goal of $500 billion in total client cash management assets, and we've kept growing! It's been a great run and a lot of fun."
Our "Top Money Funds" piece says, "This issue recognizes the top performing money funds, ranked by total returns, for calendar year 2019, as well as the top funds for the past 5‐year and 10‐year periods. We present the funds below with our annual Money Fund Intelligence Awards. These are given to the No. 1‐ranked funds based on 1‐year, 5‐year and 10‐year returns, through Dec. 31, 2019, in each of our major fund categories -- Prime Institutional, Government Institutional, Treasury Institutional, Prime Retail, Government Retail, Treasury Retail and Tax‐Exempt."
It continues, "The Top-Performing Prime Institutional fund (and fund overall) was BlackRock Cash Inst MMF SL (BRC01), which returned 2.49%, but DWS ESG Liquidity Inst (ESGXX) was first if restricted funds are excluded with a return of 2.41%. For Prime Retail funds, Vanguard Variable Insurance MM Fund (VAN03) ranked No. 1 (2.32%), but Fidelity Inv MM: MM Port Inst (FNSXX) had the best return in 2019 (2.30%) if restricted funds are excluded."
The latest MFI also includes the News brief, "Money Market Yields Flat," which says, "Rates on money market funds, brokerage sweep accounts and bank accounts remained flat in December and early January after falling in the weeks after the Fed’s last (Oct. 30) rate cut."
A second News piece, "SEC Stats: MMF Assets Poised to Break $4.0 Tril, Up 17th Month in a Row," reads, "The Securities and Exchange Commission's separate 'Money Market Fund Statistics' summary shows total money fund assets increased by $45.6 billion in November to a record $3.984 trillion, the 17th straight month of gains for money fund assets overall. Prime MMFs increased $20.2 billion in November to close at $1.122 trillion, their highest level since July 2016, while Govt & Treasury funds rose by $24.2 billion to a record $2.718 trillion. Tax Exempt funds rose by $1.2 billion to $143.8 billion. Yields fell across the board with Prime MMFs, Govt MMFs and Tax-Exempt MMFs all decreasing in November."
Our January MFI XLS, with Dec. 31 data, shows total assets rose by $72.7 billion in December to $3.994 trillion, after rising $40.9 billion in November, $85.2 billion in October and $80.2 billion in September. Our broad Crane Money Fund Average 7-Day Yield fell to 1.31% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 4 basis points to 1.46%.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA fell 4 basis points to 1.72% and the Crane 100 fell to 1.73%. Charged Expenses averaged 0.41% (up one basis point from last month) and 0.27% (up one basis point from last month), respectively for the Crane MFA and Crane 100. The average WAM (weighted average maturity) for the Crane MFA and Crane 100 was 33 (up one day) and 37 days (unchanged), respectively. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
