Money Fund Yields Stay Flat at 0.03%

Oct 27 20

Money market fund yields continue to bottom out just above zero -- our flagship Crane 100 was flat in the latest week at 0.03%. 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. Nearly three-quarters of all money funds and half of MMF assets have landed on the zero yield floor, though some continue to show some yield. According to our Money Fund Intelligence Daily, as of Friday, 10/23, 618 funds (out of 849 total) yield 0.00% or 0.01% with assets of $2.376 trillion, or 50.5% of the total. There are 192 funds yielding between 0.02% and 0.10%, totaling $1.805 trillion, or 38.3% of assets; 38 funds yielded between 0.11% and 0.25% with $502.2 billion, or 10.7% of assets; only 1 fund yielded between 0.26% and 0.50% with $25.9 billion in assets. No funds yield over funds yield over 0.26%. The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 670), shows a 7-day yield of 0.02%, unchanged in the week through Friday, 10/23. The Crane Money Fund Average is down 45 bps from 0.47% at the beginning of April. Prime Inst MFs were flat at 0.05% in the latest week and Government Inst MFs were flat at 0.02%. Treasury Inst MFs were unchanged at 0.01%. 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 0.03% (unchanged), Tax-exempt MF 7-day yields were also unchanged at 0.02%. (Let us know if you'd like to see our latest MFI Daily.) Our Crane Brokerage Sweep Index, which hit the zero floor six and a half months ago, remains at 0.01%. The latest Brokerage Sweep Intelligence, with data as of October 23, showed no changes in the last week. All major brokerages, with the exception of RW Baird, 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 27 weeks at 0.01% (for balances of $100K). Ameriprise, E*Trade, Fidelity, Merrill Lynch, Morgan Stanley, Raymond James, 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). RW Baird offers a rate of 0.02% for its balances of $100K.

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