The January issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "Highlights of '20: March Madness, Asset Surge, Rate Crash," which reviews one of the craziest years in money funds' 50-year history; "ICD Portal's Tory Hazard Keeps Focus on Clients, Tech," which profiles the leader of the largest independent MMF "portal"; and, "Top Money Funds of 2020; 12th Annual MFI Awards," which reviews the No. 1‐ranked funds based on 1‐year, 5‐year and 10‐year returns. We've also updated our Money Fund Wisdom database with December 31 statistics, and send out our MFI XLS spreadsheet Friday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our January Money Fund Portfolio Holdings are scheduled to ship on Tuesday, January 12, and our January Bond Fund Intelligence is scheduled to go out Friday, January 15.
MFI's lead article says, "Money fund assets jumped by 20% in 2020, the second year in a row, as yields plunged and businesses scrambled for cash in response to the coronavirus lockdown. Prime MMFs came under pressure and frozen money markets triggered Fed and Treasury assistance, while Government MMFs jumped by an eye-popping $1.1 trillion. Fee waivers and talk of further regulatory change became major topics, and trends toward social and ESG MMFs, and technology, continued from the prior year. Below, we take a look at the highlights of 2020, and also provide a brief outlook for 2021."
It continues, "Crane Data's numbers showed assets rose by $775.4 billion, or 19.6%, to end just over $4.7 trillion ($4.733T) in 2020. ICI's narrower asset collection settled at $4.297 trillion, up by $665 billion, or 18.3%.... After inching lower in 2019, yields plunged to zero in 2020. Our Crane 100 MF Index fell from 1.46% to 0.02%, while our broader Crane Money Fund Average fell from 1.32% to 0.02%.... Yields are expected to be flat in the New Year, though they could inch higher late in '21 if expectations for rising rates in 2022 or 2023 grow."
Our latest "Profile" piece reads, "This month, MFI interviews ICD CEO Tory Hazard. We ask him about San Francisco-based ICD's history in cash and discuss Prime funds, fee waiver pressures, current priorities, and ICD's outlook for the coming year. Hazard reminds us why money market funds are 'a valuable part of institutional investment portfolios in all yield environments,' and tells us that investors are 'looking for products that earn at least some yield.' Our Q&A follows."
MFI says, "Give us a little history. Hazard explains, "ICD has been solely focused on the treasury marketplace from day one. As an agnostic provider of money market funds and short-term investments for institutional investors, we bring institutional investors together with hundreds of investment products. ICD was founded by three money market fund sales executives over 17 years ago, in 2003. Prior to forming ICD, the founders were working for big banks and were relegated to offering only their respective banks’ funds, using primitive technology. They recognized the opportunity to create an independent marketplace of investment products that could be accessed through an investment portal. Their vision was to provide clients with the best products and services in the industry, and that remains our mission today."
Hazard continues, "I joined the company in 2009 and served as CFO, COO and President before becoming CEO in 2017. Coming in, my key focus was to continue scaling the business while extending the value of the firm's service and technology. We were the first portal company with operations in Europe. We were the first portal company to release a robust exposure analytics application. We led the portal industry in integrating treasury technologies, and we introduced the industry's first multi counterparty secure automated settlement solution. We'll be announcing more industry innovations in 2021. Today, we serve over 400 companies across 65 industries in 43 countries around the world."
The "12th Annual MFI Awards" article tells readers, "This issue recognizes the top performing money funds, ranked by total returns, for calendar year 2020, as well as the top funds for the past 5‐year and 10‐year periods. We present the funds below with our annual Money Fund Intelligence Awards. These are given to the No. 1‐ranked funds based on 1‐year, 5‐year and 10‐year returns, through Dec. 31, 2020, in each of our major fund categories -- Prime Institutional, Government Institutional, Treasury Institutional, Prime Retail, Government Retail, Treasury Retail and Tax‐Exempt."
The rankings begin, "The Top-Performing Prime Institutional fund (and fund overall) was BlackRock Cash Inst MMF SL (BRC01), which returned 0.94%, but Western Asset Prem Inst Liquid Res Capital (WAAXX) was first if restricted funds are excluded with a return of 0.69%. For Prime Retail funds, Wells Fargo MMF Prm (WMPXX) had the best return in 2020 (0.68%)."
The latest MFI also includes the News piece, "Assets Up Big in '20, But Flat in Dec.," which says, "Crane Data's MFI shows money fund assets down just $6.3 billion in December, but up by a huge $775.4 billion, or 19.6%, in 2020. ICI's weekly data series shows money fund assets up $665 billion, or 18.3%, in 2020, with Inst MMFs up $510 billion (22.5%) and Retail MMFs up $156 billion (11.4%). The gains in '20 almost match those of 2019, and are the biggest in dollar terms since 2008."
A second news brief entitled, "Northern Drops Other Prime Shoe, Exits Muni Too," explains, "Northern Funds, which exited the Prime Institutional money fund space earlier this year, filed to exit the Prime Retail and Municipal segments as well. The 11th largest money fund manager ($168.3 billion) holds 99.7% in Government assets. See the press release, 'Northern Trust Asset Management Announces Changes to Money Market Mutual Fund Suite.' Wells Fargo Funds also filed to merge its two Prime portfolios into one."
A third news brief, "Invesco Files for Cavu Securities Class" explains, "Invesco's Form N1-A registration for its Short-Term Investment Trust (STIT) says it will launch new 'CAVU Securities Classes' for Invesco Liquid Assets Portfolio, Invesco Treasury Portfolio and Invesco Government & Agency Portfolio. The filing says, 'This prospectus is to be used only by clients of CAVU Securities, LLC (CAVU). CAVU is a veteran and minority owned firm.'"
Our January MFI XLS, with December 31 data, shows total assets fell by $6.3 billion in December to $4.733 trillion, after decreasing $11.7 billion in November, $46.8 billion in October, $121.2 billion in September, $42.3 billion in August, $44.2 billion in July and $113.0 billion in June. Assets increased $31.6 billion in May, $417.9 billion in April and $688.1 billion in March. Our broad Crane Money Fund Average 7-Day Yield was unchanged at 0.02%, our Crane 100 Money Fund Index (the 100 largest taxable funds) also sits at 0.02%.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA was down a basis point at 0.16% while the Crane 100 was down 2 basis points, also at 0.16%. Charged Expenses averaged 0.14% for both the Crane MFA and Crane 100. (We'll revise expenses on Monday once we upload the SEC's Form N-MFP data for 12/31.) The average WAM (weighted average maturity) for the Crane MFA and Crane 100 was 41 (unch.) and 46 days (up 2 days) respectively. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
