Average Yields Down to 9 Basis Points

Jul 21 20

Money market fund yields continue to bottom out just slightly above zero, as our flagship Crane 100 inched down by one basis point to 0.09% in the latest week. The Crane 100 Money Fund Index fell below the 1.0% level in mid-March and below the 0.5% level in late March. It is down from 1.46% at the start of the year and down from 2.23% at the beginning of 2019. Well over half of all money funds and over one quarter of MMF assets have since landed on the zero yield floor, though many continue to show some yield. According to our Money Fund Intelligence Daily, as of Friday, 7/17, 502 funds (out of 850 total) yield 0.00% or 0.01% with assets of $1.532 trillion, or 31.1% of the total. There are 180 funds yielding between 0.02% and 0.10%, totaling $1.616 trillion, or 32.8% of assets; 142 funds yielded between 0.11% and 0.25% with $1.563 trillion, or 31.7% of assets; 26 funds yielded between 0.26% and 0.50% with $215.4 billion in assets, or 4.4%. No funds yield over funds yield over 0.50%. The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 671), shows a 7-day yield of 0.06%, unchanged in the week through Friday, 7/17. The Crane Money Fund Average is down 41 bps from 0.47% at the beginning of April. Prime Inst MFs were down 2 basis points to 0.14% in the latest week and Government Inst MFs were flat at 0.05%. Treasury Inst MFs were unchanged at 0.05%. Treasury Retail MFs currently yield 0.01%, (unchanged in the last week), Government Retail MFs yield 0.01% (unchanged in the last week), and Prime Retail MFs yield 0.07% (down a basis point for the week), Tax-exempt MF 7-day yields were up 2 bps at 0.04%. (Let us know if you'd like to see our latest MFI Daily.) The largest funds tracked by Crane Data yielding 0.00% or 0.01% include: Fidelity Govt Cash Reserves ($200.9B), Fidelity Government Money Market ($195.2B), Fidelity Treasury Fund ($27.7B) and Edward Jones Money Mkt Inv ($22.7B). Our Crane Brokerage Sweep Index, which hit the zero floor roughly three months ago, remains at 0.01%. The latest Brokerage Sweep Intelligence, with data as of July 17, 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 ten 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). Even fin-tech firms Betterment, Wealthfront and Robinhood have cut rates, currently offering 0.40%, 0.35% and 0.30%, respectively.

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