Money market fund yields continue to bottom out just above zero -- our flagship Crane 100 inched down by just one basis point to 0.13% last week -- and expense ratios continue to inch lower as fee waivers slowly increase. The Crane 100 Money Fund 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. Over half of all money funds and over one quarter of MMF assets have already hit the zero floor, though many continue to show some yield. According to our Money Fund Intelligence Daily, as of Friday, 6/12, 459 funds (out of 849 total) yield 0.00% or 0.01% with assets of $1.398 trillion, or 27.6% of the total. There are 176 funds yielding between 0.02% and 0.10%, totaling $1.373 trillion, or 27.1% of assets; 128 funds yielded between 0.11% and 0.25% with $1.464 trillion, or 28.9% of assets; 78 funds yielded between 0.26% and 0.50% with $750.8 billion in assets, or 14.8%; and just four funds yield between 0.51% and 0.99% with $81.1 billion in assets or 1.6% (no funds yield over 1.00%).

The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 671), shows a 7-day yield of 0.09%, down a basis point in the week through Friday, 6/12. The Crane Money Fund Average is down 38 bps from 0.47% at the beginning of April. Prime Inst MFs were down 3 bps to 0.22% in the latest week and Government Inst MFs were down a basis point to 0.06%. Treasury Inst MFs were flat at 0.05%. Treasury Retail MFs currently yield 0.01%, (unchanged in the last week), Government Retail MFs yield 0.02% (down a basis point in the last week), and Prime Retail MFs yield 0.13% (down three bps for the week), Tax-exempt MF 7-day yields dropped by 1 basis point to 0.04%.

Our Crane Brokerage Sweep Index, which hit the zero floor a little over two months ago, remains at 0.01%. The latest Brokerage Sweep Intelligence, with data as of June 12, 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 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 eight 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).

Monday's MFI Daily, with data as of June 12, shows Prime assets continuing their rebound with $6.2 billion of inflows, increasing their asset total to $1.125 trillion in the latest week. Government assets again experienced outflows, though, decreasing by $30.8B to $3.803 trillion. (We expect big outflows Monday due to the June 15 quarterly corporate tax payment date too.) Tax-Exempt MMFs decreased $488 million. Month-to-date money fund assets have fallen by $56.2 billion. Prime assets are up $19.8 billion MTD, while Government assets are down by $75.8 billion. Tax-Exempt MMFs decreased by $97 million.

According to the our separate monthly data series, our June MFI XLS, with data as of May 31, 480 funds (out of 932 total) now yield 0.00% or 0.01% with assets of $913.0 billion, or 18.2% of the total. There are 173 funds yielding between 0.02% and 0.10%, totaling $1.157 trillion, or 23.1% of assets; 165 funds yielded between 0.11% and 0.25% with $2.207 trillion, or 44.0% of assets; 93 funds yielded between 0.26% and 0.50% with $772.4 billion in assets, or 15.4%; and just 12 funds yield between 0.51% and 0.99% with $105.1 billion in assets or 2.1% (no funds yield over 1.00%). (Our June MFI XLS and craneindexes.xlsx files were revised last Monday to include the latest expense numbers from the SEC's Form N-MFP data set. Subscribers may download these via our "Content" center.)

Looking at our revised MFI XLS numbers, Charged Expenses as of May 31 averaged 0.26% (down 4 bps from last month) and 0.21% (down 3 bps), respectively for the Crane MFA and Crane 100. Expense ratios for Prime Inst MF averaged 0.27% (down 3 bps) while Government Inst MFs and Treasury Inst MFs both showed expenses at 0.21% (down 3 bps and 4 bps, respectively). Treasury Retail MFs expense ratio fell to 0.27% (down 7 bps), Government Retail MFs dropped to 0.25% (down 9 bps) and Prime Retail MFs were flat at 0.45%. Tax-exempt MF expenses were 0.33% (unchanged).

Our June MFI XLS, with May 31 data, shows 7-day yields dropping in May. Our broad Crane Money Fund Average 7-Day Yield fell 9 bps to 0.10% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 12 bps to 0.14%. Prime Inst MFs were down 20 bps to 0.26% in May and Government Inst MFs were down 8 bps at 0.07%. Treasury Inst MFs dropped by 6 basis point to 0.06%. Treasury Retail MFs currently yield 0.01%, (down a basis point for the month), Government Retail MFs yield 0.02% (down 3 bps), and Prime Retail MFs yield 0.17% (down 22 bps for the month), Tax-exempt MF 7-day yields dropped by 5 basis point to 0.06%.

On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA was down 14 bps at 0.36% and the Crane 100 fell to 0.35%. Prime Inst MFs were down 23 bps to 0.53% in the latest week and Government Inst MFs were down 10 bps at 0.28%. Treasury Inst MFs dropped by 9 basis point to 0.27%. Treasury Retail MFs currently yield 0.28%, (down 7 bps in the last month), Government Retail MFs yield 0.27% (down 12 bps in the last month), and Prime Retail MFs yield 0.62% (down 22 bps in May), Tax-exempt MF 7-day yields dropped by 5 basis point to 0.39%. (Let us know if you'd like to see our latest MFI XLS or MFI Daily.)

In other news, the June issue of our Bond Fund Intelligence, which was sent to subscribers Friday morning, features the lead story, "Core Bonds Focus of PIMCO's Scott Mather on AssetTV," which highlights PIMCO Total Return, and, "BlackRock on Treasury ETFs; Launches Ultra-Short SGOV," which quotes Karen Schenone on Treasuries. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund yields plunged and returns jumped in May. We excerpt from the new issue below. (Contact us if you'd like to see our Bond Fund Intelligence and BFI XLS spreadsheet, or our Bond Fund Portfolio Holdings data.)

Our "PIMCO's Scott Mather" pieces says, "AssetTV features a video entitled, 'Straight From PIMCO: Core Bonds in Focus,' which tells us, "Scott Mather, CIO U.S. Core Strategies, discusses performance differences amid core bond funds, and how a focus on quality, liquidity and diversification has helped PIMCO Total Return provide portfolio ballast in this crisis.'"

Our BlackRock Treasury piece reads, "BlackRock Fixed Income Product Strategist Karen Schenone writes about the popularity of Treasury bonds in a new blog, 'Trending Now: Treasury ETFs.' She explains, 'The market volatility since the start of the COVID-19 crisis has highlighted one of the main reasons why investors own bonds: potential for principal protection. When the crisis first started in March and April, investors began to drastically shift their portfolios to cope with the new environment. As a result, short-term U.S. Treasuries have been a popular investment given the potential stability they can provide. Given their newfound popularity, let’s take a closer look at this critical sector.'"

Our Bond Fund News includes the brief, "Yields Plunge, Return Jump in May," which tells us, "Bond fund yields fell and returns jumped again last month. Our BFI Total Index returned 1.85% over 1-month and 3.48% over 12 months. The BFI 100 gained 1.53% in May and rose 4.91% over 1 year. Our BFI Conservative Ultra-Short Index returned 0.55% over 1-mo and 1.87% over 1-yr; Ultra-Shorts averaged 0.95% in May and 1.20% over 12 mos. Short-Term returned 1.27% and 2.84%, and Intm-Term rose 1.15% last month and 6.57% over 1- year. BFI’s Long-Term Index returned 1.34% in May and 9.46% for 1-year; our High Yield Index rose 3.92% but is down 0.64% over 1-year."

In another News brief, we quote the Morningstar piece, "Who Won, or Lost, in the Bond Fund Sell-Off." Tom Lauricella comments on March's madness, "[I]t was really a double whammy. On the one hand, the initial wave of fear was liquidity-driven. Everything just sort of froze up. Concurrent with that, all of a sudden we started having that credit fear.... [O]nce it started to look like we could go for quite a while and companies could actually go belly up and so forth, then anything that had a real even whiff of credit risk -- and especially things like high yield and bank loans and so forth, they really took it on the chin."

Finally, BFI also features a sidebar that covers the Barron's piece, "The Future of ETFs." It explains, "Exchange-traded funds, long maligned as the harbinger of the next crisis, have become the quiet and unlikely champions of the coronavirus bond market. During the critical week of March 23, when bond trading dried up, ETFs played a vital role. The iShares iBoxx High Yield Corporate Bond (HYG) traded 168,000 times a day, while its top five underlying holdings traded only 25 times a day. It was a similar case for iShares iBoxx Investment Grade Corporate Bond (LQD). This allowed institutional and individual bond investors to manage their portfolios; that ability to trade actually helped set, or predict, the prices of the underlying bonds."

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