Wells Fargo Money Market Funds published their monthly "Portfolio Manager Commentary," yesterday, and authors Jeff Weaver, Laurie White, et. al., tell us, "​If the end of the first quarter of 2020 felt like deja vu all over again, the second quarter positively felt like a renaissance. As we watched the tremendous risk-​off trades and liquidity raising taking place in March, we couldn'​t help but flash back to 2016 and the implementation of money market reform, which saw institutional prime funds shrink by over 86%, bottoming out that year at just north of $​119 billion. While that was clearly a regulatory-​driven event, the pandemic-​related selling we saw in the prime funds was prompted by a confluence of a few different factors: investors raising cash to meet liquidity needs, shareholders conducting precautionary cash raises in case fees and/​or gates were implemented, falling net asset values (​NAVs) in institutional floating NAV (​FNAV) funds due to market dislocations, and a general flight to perceived safety.... Some funds were hit harder than others -- institutional versus retail -- as were different fund families. But by and large, with only one exception, funds were able to manage their liquidity in excess of the 30% regulatory requirement, and all funds avoided implementing fees and gates. The Federal Reserve (​Fed) played a vital role in ensuring this outcome and helping calm the financial markets with the implementation of its Money Market Mutual Fund Liquidity Facility (​MMLF), which went operational on March 23, and outflows from prime funds ceased by the end of March. At the end of the day, so to speak, prime funds ended down over 15% on the month, with institutional prime funds down almost 19%." Wells continues, "And then a funny thing happened: Prime funds started growing again.... April inflows were $​82 billion followed by another $​87 billion in May, which then slowed to $​23 billion in June. All in all, prime fund assets under management reached a post-​reform high of over $​1.​1 trillion. This focus on prime funds is not to downplay the tremendous growth of government funds during the past two quarters, which propelled the industry to record assets under management of over $​5 trillion. It is meant to illustrate that in spite of market dislocations, there is still a demand on the part of some investors for this type of product." They add, "The course of asset flows as the year progresses, liquidity facilities wind down, and the inevitable talk of reform gets started will help us better understand the risk characteristics driving client flows and preferences and, in turn, help us better manage the funds to meet investor expectations."

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