The May issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Thursday morning, features the articles: "MMF Assets Break $5 Trillion; Huge Liquidity Build Continues," which reviews the continued massive inflows into money market funds; "ICI's Stevens Revisits MMFs Once More Before Retiring," which profiles the ICI President and CEO; and, "ICI 2020 Fact Book Shows Money Fund Trends in '19," which looks at the newly released Investment Company Fact Book. We've also updated our Money Fund Wisdom database with April 30 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 May Money Fund Portfolio Holdings are scheduled to ship on Monday, May 11, and our May Bond Fund Intelligence is scheduled to go out Thursday, May 14.

MFI's "MMF Assets Break $5 Trillion" article says, "After a historic buildup of liquidity in March due to panic over coronavirus shutdowns, money funds continued to see huge inflows in April, as assets broke above the $5.0 trillion level for the first time ever. MMF assets increase by $417.9 billion in April after rising $688.1 billion in March, a total 2-month gain of $1.106 trillion. Assets have risen slightly in May month-to-date too, but they’re up just $17.3 billion through May 5."

It continues, "Government funds (including Treasury MMFs) jumped $329.3 billion in April to $3.900 trillion (after a surge of $821.0 billion in March), while Prime funds saw assets rise $79.7 billion, retaking the $1.0 trillion level, to $1.038 trillion in April (after falling $123.9 billion in March). Tax-Exempt assets increased $8.9 billion to $140.6 billion in April (after falling $8.9 billion in March).

Our latest "Profile" reads, "This month, MFI interviews Paul Schott Stevens, President & CEO of the Investment Company Institute (ICI). Stevens has been with the mutual fund trade association for 20 years and has been involved in the fund industry for even longer. We discuss his storied career, and ICI’s crucial involvement in the development of money fund regulations. Our Q&A follows."

MFI says, "Give us some history. Stevens tells us, "The ICI is 80 years old this year. We started in 1940 at the time that the Investment Company Act was passed, and the SEC needed an industry group to work with as it began to develop implementing regulations. If you look at what our mission is, it's been the same over those 80 years.... It's to advance the interests of funds and their investors and the constituencies that make fund investing possible, the advisers and boards. Funds are complicated financial instruments in many respects for people and so, trying to provide public information about them has always been a part of our mission.... The third part is, trying to promote high ethical standards. That is incredibly important in an industry that serves 100 million individual investors here in the United States."

Stevens continues, "Outside of ICI, I've spent 15 years in private law practice.... I had my first money market fund related assignment, I think probably in 1979. So, my involvement with this industry goes back -- can it possibly be that long -- over 40 years.... It has been an interesting and varied career. But I'll tell you, no challenge of that career, no position that I'd ever held, has been quite as satisfying as leading the ICI. Very few lawyers actually get the chance to move out of the law and into a CEO role. I found meeting the challenges of our organization, working with our members and the incredible staff we have to be among the most gratifying things that I've done."

He adds, "It has been a pretty challenging period.... When I came in in 2004, we were in the midst of our late trading and market timing situation. No sooner did we get out of that when we entered the phase of the great financial crisis, with a preoccupation about money fund issues lasting over five years and two cycles of SEC rulemaking. In 2011, our board said we want you to refashion the ICI as a global organization. We've been working on that ever since.... And now, dealing with this global pandemic and having to adopt completely new ways of working. It has been one extraordinary challenge after another."

The "ICI 2020 Fact Book" article tells readers, "ICI's new '2020 Investment Company Fact Book' looks at MMF demand and Government MMF flows, as well as worldwide money fund issues. Overall, money funds assets were $3.632 trillion at year-end 2019, making up 17.1% of the $21.3 trillion in overall mutual fund assets. Retail investors held $1.370 trillion, while institutional investors held $2.262 trillion."

ICI adds, "In 2019, money market funds received $553 billion in net new cash flows, up from $159 billion in 2018. Government money market funds received the bulk of the inflows ($364 billion), followed by prime money market funds with $198 billion in inflows. Tax-exempt money market funds, on the other hand, had net outflows of $9 billion."

The latest MFI also includes the News brief, "Money Fund Yields Approach Zero," which writes, "Money market fund yields continued lower in April, falling 25 bps to 0.25% (Crane 100 Money Fund Index). Almost 20% of assets are now yielding 0.00% or 0.01% and waiving portions of fees."

A second News piece titled, "Vanguard Closes Treasury Money Market Fund to New Investors," says, "Vanguard ... closed its $39.5 billion Treasury Money Market Fund (VUSXX) to new shareholder accounts. The company is seeking to protect existing Fund shareholders from high levels of cash flow that could potentially accelerate reductions to the Fund's yield. Existing shareholders ... can continue to make purchases.”

Our May MFI XLS, with April 30 data, shows total assets jumped by $417.9 billion in April to $5.078 trillion, after jumping $688.1 billion in March, rising $23.4 billion in February and falling $7.8 billion in January. Our broad Crane Money Fund Average 7-Day Yield fell 19 bps to 0.20% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 18 bps to 0.26%.

On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA was down 20 bps at 0.54% and the Crane 100 fell to 0.50%. Charged Expenses averaged 0.34% (unchanged from last month) and 0.25% (unchanged), respectively for the Crane MFA and Crane 100. The average WAM (weighted average maturity) for the Crane MFA and Crane 100 was 38 (up five days) and 41 days (up six days) respectively. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

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