The February issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "Covid Changing Cash; Social, ESG MMFs Making Impact," which reviews the latest in environmental, social and governance MMFs; "Money Fund University 2021: A Look at History, Instruments," which highlights quotes from our recent basic training webinar; and, "Fee Waivers Bite: $3.1 Billion & Counting; Revenue $6 Tril.," which explores pressures on MMF expense ratios. We also sent 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 February Money Fund Portfolio Holdings are scheduled to ship on Tuesday, February 9, and our February Bond Fund Intelligence is scheduled to go out Friday, February 12. (Note: A press release entitled, "SEC Requests Comment on Potential Money Market Fund Reform Options Highlighted in President's Working Group Report" was posted yesterday. Watch for full coverage next week.)

MFI's lead article says, "As we move into 2021 and prepare to re-emerge from the coronavirus era, the world of cash investing continues to adapt to the ever-changing rate and regulatory environment, and it continues to be confused over the push towards 'ESG' and 'Social' MMFs. We list the latest group of ESG funds on page 5 (we expect more soon), and we briefly review the latest in the space below."

"SSGA published 'Transformed Overnight: How COVID-19 Changed Cash,' which talks about several major themes in the money markets last year, including one of the biggest, ESG. SSGA's Will Goldthwait writes, in a section entitled, 'The Quest for Yield: Lower for Much Longer,' 'Entrenched low interest rates are prompting concern that the corporate treasury department will revert from profit center to cost center. While safety and liquidity remain top priorities, cash managers 'have never before kept such a sharp eye on yield across their providers,' observed one relationship manager. 'Every basis point matters now.'"

Our "MFU 2021" piece reads, "Crane Data recently hosted its annual 'basic training' event, Money Fund University, where speakers reviewed various segments and aspects of the money markets. But they also managed to sneak in some comments on current events. We briefly review and excerpt from some of the highlights below. (Note: Crane Data Subscribers and Money Fund University Attendees may access the MFU `Powerpoint and recordings via our 'Money Fund University 2021 Download Center.')"

It goes on, "During the 'History & Current State of Money Market Mutual Funds' introduction, our Peter Crane comments, "Money funds turned 50 years old in October ... so we're celebrating all year. It’s been a wonderful ride…. First let me give you some basics … Money funds are ... short-term bond funds, with quality, diversity, liquidity, and maturity guidelines around them. The stable $1.00 a share price was one of the key elements.... They use something called amortized cost, so the fluctuations were minimal, and they were always priced at $1.00.'"

Crane continues, "But, we've seen rounds of regulatory reforms, and the 2014 reforms that went into effect in 2016 allowed some money funds' NAVs to float.... So, the dollar feature of money funds is shifting somewhat from what it was historically.... Money funds were having a nice recovery, rates had been up over 2% again.... In 2019 and 2020, money fund assets grew by just under 20% each year.... You can see that super spike up from dash to cash coronavirus growth."

The "Fee Waivers" article tells readers, "Mutual fund news source ignites published the article, 'Sponsors Waived $3.1B in Money Fund Fees in 2020.' They write, 'Money market fund sponsors waived $3.1 billion in fees last year, according to Investment Company Institute data. An economic slowdown spurred by the coronavirus pandemic led the Federal Reserve to cut short-term interest rates twice last March, to zero, after about two years of keeping the benchmark rate above 1.5%. With those cuts, yields tumbled, and a growing number of money funds began waiving fees to avoid zero or negative yields.'"

Ignites explains, "As of December, 94% of all money fund share classes waived a portion of expenses, ICI data shows. That compares to 68% in January 2020.... The overall increase last year in money fund assets also pushed up the total amount of fees waived. Investors piled into money funds in March amid liquidity concerns, adding about $700 billion to the products that month, according to Crane Data."

The latest MFI also includes the News piece, "SEC Seeks Comments on Reforms." It says, "See the release, "SEC Requests Comment on Potential Money Market Fund Reform Options Highlighted in President's Working Group Report," and see our coverage inside on the PWG report." We also include the brief, "Money Fund Assets Flat in January," which explains, "ICI's weekly 'Money Market Fund Assets' report shows assets down in the latest week, after rising 3 out of 4 prior weeks. Crane Data shows assets up $5.6 billion to $4.730 trillion."

A third news brief entitled, "Federated Hermes Launches Conservative 'Microshort'," says, "The release, 'Federated Hermes, Inc. Launches Two New Microshort Funds,' tells us, 'Federated Hermes ... announced the launch of Federated Hermes Conservative Microshort Fund and Federated Hermes Conservative Municipal Microshort Fund. The actively managed funds offer an innovative approach to liquidity management by pursuing higher yields than money market strategies while simultaneously aiming to maintain lower NAV volatility by investing in securities with shorter maturities than traditional ultrashort products.'"

Our February MFI XLS, with January 31 data, shows total assets rose by $5.6 billion in January to $4.730 trillion, after decreasing $6.7 billion in December, $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 remained flat at 0.02%.

On a Gross Yield Basis (7-Day) (before expenses are taken out), both the Crane MFA and the Crane 100 sat at 0.15%. Charged Expenses averaged 0.13% 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 1/31.) The average WAM (weighted average maturity) for the Crane MFA and Crane 100 was 42 (up a day) and 46 days (unch.) respectively. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

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