The October issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Thursday morning, features the articles: "ESG & Social Trend Reaches Frenzy as Funds Go All-In," which discusses the latest news and moves by managers to burnish their sustainability or diversity credentials; "Money Fund Symposium Flies in Philly; Regulations Focus," which reviews the highlights from our return to conferences; and, "Worldwide MF Assets Higher in Q2'21 Led by China, U.S.," which examines the latest global MMF market rankings. We also sent out our MFI XLS spreadsheet Thursday a.m., and have updated our Money Fund Wisdom database query system with 9/30/21 data. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our October Money Fund Portfolio Holdings are scheduled to ship on Tuesday, Oct. 12, and our October Bond Fund Intelligence is scheduled to go out next Friday, Oct. 15.
MFI's lead article says, "Dreyfus is the latest money market fund manager to integrate ESG criteria into its overall portfolio management credit analysis, joining Federated Hermes, Goldman Sachs, J.P. Morgan and others. A spokesperson for BNY Mellon Investment Management says, 'Dreyfus Cash Investment Strategies has announced the formal integration of environmental, social, and governance (ESG) considerations into its credit analysis process. We define ESG integration as the explicit inclusion of ESG factors in our credit evaluation where available and, ultimately, investment decisions. There is no change to our core investment process and many of the factors embedded within ESG are part of our credit analysis already."
It continues, "CIO John Tobin comments, "We believe the integration of ESG into our fundamental credit process where available makes us better investors and supports our mission of protecting our clients' future financial wellbeing. In our view, issuers that are environmentally aware, socially responsible, and well governed are often better positioned to manage risks and capitalize on opportunities."
Our "MFS" piece reads, "Crane Data hosted its latest Money Fund Symposium conference in Philadelphia recently, and the 250+ attendees gathered for our big show for first time since June 2019 in Boston. We excerpt from some of the sessions, below. (Note: Thanks to those who supported MFS! The recording and materials are available here for Attendees and Crane Data subscribers.)
The recap explains, "The opening session, 'Keynote: Adapting to Regulations, Tech & ESG,' featured BlackRock's Tom Callahan and Federated Hermes' Debbie Cunningham. Callahan comments, 'Here is what I believe the correct narrative for the cash management industry through the current crisis is: Our clients collectively, as everyone knows, are the largest and most sophisticated clients in the world, and they were thrust quite unexpectedly in March of 2020 into the most challenging operating environment that any of them had ever seen. In response, they did the logical thing. They raised liquidity. They raised a biblical amount of liquidity. And much of that, over $1.25 trillion, was invested in money funds in three weeks at the end of March 2020 and at the beginning of April.'"
The "Worldwide" article tells readers, "The Investment Company Institute published, 'Worldwide Regulated Open-Fund Assets and Flows, Second Quarter 2021,' which shows that money fund assets globally rose by $86.0 billion, or 1.0%, in Q2’21 to $8.565 trillion. The increase was driven by gains in Chinese and U.S. money market fund assets, but French and Australian MMF assets declined. MMF assets worldwide increased by $404.9 billion, or 5.0%, in the 12 months through 6/30/21, and money funds in the U.S. now represent 52.9% of worldwide assets."
ICI's release says, "At the end of the second quarter of 2021, 47% of worldwide regulated open-end fund assets were held in equity funds. The asset share of bond funds was 20% and the asset share of balanced/mixed funds was 12%. Money market fund assets represented 12% of the worldwide total.... Money market funds worldwide experienced an inflow of $79 billion in the second quarter of 2021 after registering an inflow of $263 billion in the first quarter of 2021."
MFI also includes the News brief, "Money Funds Celebrate 50 Years!" We write, "While we said one year ago that money market funds marked their 50th birthday, one could argue that 1971 was the actual launch date of Reserve Primary Fund, the first money fund. (It filed in October 1970 but went live in October 1971.) So Happy 50th Birthday, again!"
Another News brief, "Assets Flat in Sept.," explains, "MMFs decreased $878 million to $4.964 trillion in Sept. according to MFI XLS. ICI's weekly 'MMF Assets' report shows assets jumping for the second week in a row, following a tax-related drop on Sept. 15. ICI says, 'Total MMF assets increased by $29.11 billion to $4.54 trillion for the week ended Sept. 29.'"
Our October MFI XLS, with Sept. 30 data, shows total assets decreased $878 million to $4.964 trillion, after increasing $27.9 billion in August, but decreasing $12.4 billion in July and $73.0 billion in June. They increased $74.0 billion in May and $62.2 billion in April. Assets rose $151.0 billion in March, $30.8 billion in February and $5.6 billion in January. Assets decreased $6.7 billion in December, $11.7 billion in November and $46.8 billion in October. Our broad Crane Money Fund Average 7-Day Yield was flat at 0.02%, and 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), the Crane MFA and the Crane 100 both stood at 0.09%. Charged Expenses averaged 0.07% for the Crane MFA and the Crane 100. (We'll revise expenses Friday once we upload the SEC's Form N-MFP data for 9/30.) The average WAM (weighted average maturity) for the Crane MFA was 35 days (down 2 days) while the Crane 100 WAM fell one day to 35 days). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
