Money Fund Yields Fall to 0.22%
Money market fund yields, which fell below the 1.0% level eight weeks ago and below the 0.5% level six weeks ago, continued inching lower in the latest week. Our flagship Crane 100 Money Fund Index was down 4 basis points over the past week (through Friday, May 8) to 0.22%. The Crane 100 is down from 1.46% at the start of the year and down 2.01% from the beginning of 2019 (2.23%). While some funds have already hit the zero floor, most money funds maintain stubbornly high (given the Fed funds target), and they still maintain a yield advantage over sweeps and bank deposits, albeit a thinner one. According to our Money Fund Intelligence Daily, as of Friday, 5/8, 334 funds (out of 852 total) yielded 0.00% or 0.01% with total assets of $882.5 billion, or 17.4% of total assets. There were 131 funds yielding between 0.02% and 0.10%, totaling $682.3B, or 13.5% of assets; 198 funds yielded between 0.11% and 0.25% with $2.193 trillion, or 43.3% of assets; 105 funds yielded between 0.26% and 0.50% with $602.0 billion in assets, or 11.9% ; 79 funds yielded between 0.51% and 0.99% with $704.5 billion in assets or 13.9%; no funds yielded over 1.00%. The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 674), shows a 7-day yield of 0.17%, down 3 basis points in the week through Friday, 5/8. The Crane Money Fund Average is down 30 bps from 0.47% at the beginning of April. Prime Inst MFs were down 6 bps to 0.42% in the latest week and Government Inst MFs fell by 4 bps to 0.14%. Treasury Inst MFs dropped by 2 bps to 0.09%. Treasury Retail MFs currently yield 0.01%, (unchanged in the last week), Government Retail MFs yield 0.04% (down 3 bps for the week), and Prime Retail MFs yield 0.32% (down 6 bps for the week), Tax-exempt MF 7-day yields dropped by 2 bps to 0.09%. As we've mentioned in previous weeks, our Crane Brokerage Sweep Index, the average rate for brokerage sweep clients, has already hit the floor at 0.01%. It's down 27 bps from the end of 2018 (0.28%). The latest Brokerage Sweep Intelligence, with data as of May 8, shows no rate changes over the past week. All of major brokerages now offer rates of 0.01% for balances of $100K. No brokerage sweep rates or money fund yields have dropped to zero or gone negative to date, but this could become a distinct possibility in coming weeks or months. Crane's Brokerage Sweep Index has been flat for the last five weeks at 0.01% (for balances of $100K). Ameriprise, E*Trade, Fidelity, Merrill Lynch, Morgan Stanley, Raymond James, RW Baird, Schwab, TD Ameritrade, UBS and Wells Fargo all currently have rates of 0.01% for balances at the $100K tier level (and almost every other tier too).
