Fitch Update on U.S. ESG MMFs
Fitch Ratings published "U.S. ESG Money Market Funds: 2Q21," which says, "Fitch Group announced the launch of Sustainable Fitch, which will offer a comprehensive range of ESG Ratings products, at both an entity and instrument level, for all asset classes globally. More information is available at www.sustainablefitch.com. New ESG MMF Products: Fund managers continue to expand offerings of environmental, social, and governance (ESG)-focused money market funds (MMF). Most recently Blackrock announced that the Blackrock Liquid Federal Trust Fund will contribute a portion of net revenue from its management fee to the Thurgood Marshall College Fund, which supports students of Historically Black Colleges and Universities and Predominantly Black Institutions. Blackrock has also filed for the registration of new shares classes related to diversity and inclusion-affiliated dealers for a number of funds. ESG Assets and Yields Remain Stable: As of June 30, 2021, total U.S. ESG MMF assets under management (AUM) were $9.0 billion. Total U.S. ESG MMF AUM increased by $30 million in 2Q21, or 0.3%, compared to a 5.5% decrease in overall prime MMF AUM. As of the same date, ESG MMFs had average gross yields 2 bps lower than non-ESG MMFs, due to ESG MMFs' reduced investable universe, but had average net yields that are 2 bps higher due to lower expense ratios. At 1Q21 ESG MMF gross yields were 3 bps lower than non-ESG MMFs, while net yields were 2 bps higher."
