Money market fund yields once again inched lower in the latest week with our flagship Crane 100 down 3 basis points (through Friday, May 22) to 0.16%. The Crane 100 MF Index fell below the 1.0% level in mid-March and below the 0.5% level in late March, and is down from 1.46% at the start of the year and down from 2.23% at the beginning of 2019. While a number of money funds have already hit the zero floor, most continue to show some yield. According to our Money Fund Intelligence Daily, as of Friday, 5/22, 393 funds (out of 852 total) yielded 0.00% or 0.01% with assets of $1.316 trillion, or 25.7% of the total. There were 156 funds yielding between 0.02% and 0.10%, totaling $992.1B, or 19.4% of assets; 173 funds yielded between 0.11% and 0.25% with $1.647 trillion, or 32.2% of assets; 101 funds yielded between 0.26% and 0.50% with $837.5 billion in assets, or 16.4%; 24 funds yielded between 0.51% and 0.99% with $325.7 billion in assets or 6.4%; no funds yield 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 0.12%, down 2 basis points in the week through Friday, 5/22. The Crane Money Fund Average is down 35 bps from 0.47% at the beginning of April. Prime Inst MFs were down 4 bps to 0.30% in the latest week and Government Inst MFs fell by 2 bps to 0.10%. Treasury Inst MFs dropped by 1 bps to 0.07%. Treasury Retail MFs currently yield 0.01%, (unchanged in the last week), Government Retail MFs yield 0.03% (flat in the last week), and Prime Retail MFs yield 0.21% (down 5 bps for the week), Tax-exempt MF 7-day yields dropped by 1 bps to 0.06%. (Let us know if you'd like to see our latest Money Fund Intelligence Daily.)

Our Crane Brokerage Sweep Index, the average rate for brokerage sweep clients, which hit the floor two months ago, remains at 0.01%. It's down 27 bps from the end of 2018. The latest Brokerage Sweep Intelligence, with data as of May 22, shows no changes in the last week. All of the 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 seven 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).

Tuesday's MFI Daily, with data as of May 22, shows money fund assets with the first substantial outflow since the coronavirus crisis started in mid-March, with a decrease of $19.2 billion over the past week to $5.118 trillion. Prime assets continue their rebound, however, with $10.6 billion to $1.101 trillion in the latest week. Following inflows of $790 billion in March and $362 billion April, Government assets experienced outflows in the latest week, decreasing by $30.0B to $3.876 trillion. Tax-Exempt MMFs increased $281 million. Month-to-date money fund assets have risen $76.5 billion. Prime assets are up $83.1 billion MTD, while Government assets are down by $7.7 billion. Tax-Exempt MMFs increased by $1.1 billion.

In other news, T. Rowe Price filed a Prospectus Supplement for its T. Rowe Price Cash Reserves Fund, Summit Municipal MMF, California, Maryland and New York Tax-Free Money Funds, T. Rowe Price Tax-Exempt Money Fund, Government Money Fund, Institutional Cash Reserves Fund and U.S. Treasury Money Fund. It tells us, "The disclosure ... is supplemented to add the following: In an effort to maintain a zero or positive net yield for the fund, T. Rowe Price may voluntarily waive all or a portion of the management fee it is entitled to receive from the fund or reimburse all or a portion of the fund's operating expenses. T. Rowe Price may amend or terminate this voluntary fee waiver arrangement at any time without prior notice."

The filing continues, "In addition, the disclosure that appears after the heading 'Interest rates' or 'interest rate risks' ... is modified as follows: ... A decline in interest rates may lower the fund's yield, or a rise in the overall level of interest rates may cause a decline in the prices of fixed income securities held by the fund. The fund's yield will vary; it is not fixed for a specific period like the yield on a bank certificate of deposit. This is a disadvantage when interest rates are falling because the fund would have to reinvest at lower interest rates.... Although money market funds try to minimize this risk by purchasing short-term securities, during periods of extremely low or negative short-term interest rates, the fund may not be able to maintain a positive yield or yields on par with historical levels."

They add, "The following is added as a principal risk in section 2 of each fund's prospectus: ... The value of investments held by the fund may decline, sometimes rapidly or unpredictably, due to factors affecting certain issuers, particular industries or sectors, or the overall markets. Rapid or unexpected changes in market conditions could cause the fund to liquidate its holdings at inopportune times or at a loss or depressed value. The value of a particular holding may decrease due to developments related to the issuer, but also due to the general market conditions, including real or perceived economic developments such as changes in interest rates, credit quality, inflation, or currency rates, or generally adverse investor sentiment. The value of a holding may also decline due to factors that negatively affect a particular industry or sector, such as labor shortages, increased production costs, or competitive conditions. In addition local, regional or global events such as war, acts of terrorism, political and social unrest, regulatory changes, recessions, shifts in monetary or trade policies, natural or environmental disasters, and the spread of infectious diseases or other public health issues could have a significant negative impact on securities markets and the fund's investments. Unpredictable events such as natural disasters, pandemics, and widespread health crises may lead to unexpected suspensions or closures of securities exchanges, travel restrictions or quarantines, and an extended adverse impact on global market conditions."

Finally, Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of May 22) includes Holdings information from 52 money funds (down 28 from a week ago), which represent $1.835 trillion (down from $2.664 trillion ) of the $5.123 trillion (35.8%) in total money fund assets tracked by Crane Data. (Note that our Weekly MFPH are e-mail only and aren't available on the website. For our latest monthly Holdings, see our May 12 News, "May MF Portfolio Holdings: Treasuries Skyrocket, Repo Plunges in April.)

Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Treasury totaling $829.5 billion (down from $1.344 trillion a week ago), or 45.2%, Repurchase Agreements (Repo) totaling $460.8 billion (down from $635.7 billion a week ago), or 25.1% and Government Agency securities totaling $333.0 billion (down from $470.7 billion), or 18.1%. Commercial Paper (CP) totaled $63.7 billion (up from $59.2 billion), or 3.5% and Certificates of Deposit (CDs) totaled $57.0 billion (down from $70.7 billion), or 3.1%. A total of $54.5 billion or 3.0%, was listed in the Other category (primarily Time Deposits), and VRDNs accounted for $36.5 billion, or 2.0%.

The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $829.5 trillion (45.2% of total holdings), Federal Home Loan Bank with $205.0B (11.2%), Fixed Income Clearing Co with $93.4B (5.1%), BNP Paribas with $52.4B (2.9%), Federal Farm Credit Bank with $49.9B (2.7%), Federal National Mortgage Association with $41.3B (2.2%), JP Morgan with $39.0B (2.1%), Federal Home Loan Mortgage Corp with $35.9B (2.0%), RBC with $29.1B (1.6%) and Citi with $22.4B (1.2%).

The Ten Largest Funds tracked in our latest Weekly include: JP Morgan US Govt ($218.9B), BlackRock Lq FedFund ($172.8B), Federated Govt Oblg ($156.3B), JP Morgan 100% US Treas MMkt ($134.6B), Wells Fargo Govt MM ($133.3B), Morgan Stanley Inst Liq Govt ($115.0B), State Street Inst US Govt ($106.4B), BlackRock Lq T-Fund ($87.8B), BlackRock Lq Treas Tr ($73.4B) and JP Morgan Prime MMkt ($68.8B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary, or our Bond Fund Portfolio Holdings data series.)

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