The November issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Friday morning, features the articles: "BMO Latest to Exit MMF Space; Wells Now Allspring," which discusses the latest mergers and changes in the money fund business; "IMMFA's Iommi, Senior PMs Talks Regs at European MFS," which reviews the highlights from our most recent webinar; and, "FSB Issues Final Report on Money Market Proposals," which examines the latest on the regulatory front. We also sent out our MFI XLS spreadsheet Friday a.m., and have updated our Money Fund Wisdom database query system with 10/31/21 data. (Note: Wisdom is down temporarily but should be back up next week. MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our November Money Fund Portfolio Holdings are scheduled to ship on Tuesday, Nov. 9, and our November Bond Fund Intelligence is scheduled to go out on Monday, Nov. 15.
MFI's lead article says, "While there haven't been a ton, we continue to see mergers, liquidations and changes in the money fund space. The most recent involves the BMO Funds, which announced a deal to merge their money funds into Goldman Sachs' MMFs. Their SEC filing tells us, 'On Oct. 18, 2021, the Board of Directors of BMO Funds ... approved an agreement ... providing for the reorganization of each of the BMO Government Money Market Fund, BMO Prime MMF and BMO Tax-Free MMF ... into a corresponding series of Goldman Sachs Trust. BMO Asset Management Corp., investment adviser to each of the BMO Money Market Funds, recommended that the Board approve the Reorganizations in connection with its decision to exit the mutual fund investment advisory business in the United States, including ceasing management of each BMO Money Market Fund."
It continues, "BAMC's decision to exit the mutual fund investment advisory business is connected to the decision by Bank of Montreal ... to sell the entities representing its EMEA asset management business to Ameriprise Financial. To ensure that shareholders of the BMO Money Market Funds have continued access to a large and stable mutual fund platform, BAMC has proposed reorganizing the BMO Money Market Funds into the corresponding Acquiring Funds. Goldman Sachs Asset Management, L.P. serves as investment adviser to each of the Acquiring Funds."
Our "European MFS" piece reads, "Crane Data's recent virtual European Money Fund Symposium featured a session on 'Regulatory, ESG & Ultra-Short Issues,' which reviewed the latest on European MMFs and potential regulatory changes. Veronica Iommi, Secretary General of IMMFA, the Institutional Money Market Funds Association, spoke first during this segment. (For those that missed EMFS, the recording is available here, and the materials here.)
Iommi explains, "Those of you who are not familiar with IMMFA, ... originally formed over 22 years ago, our core objective is to promote and support the development and integrity of the money market funds industry in Europe. We do this by engaging with policymakers, regulators, educating investors, providing regular data on various funds and overall, providing a centralized point of contact, information and expertise."
Our FSB Update explains, "In mid-October, the Financial Stability Board, a group of global regulators, published its '`Policy Proposals to Enhance Money Market Fund Resilience - Final Report.' See their press release, 'Policy proposals to enhance money market fund resilience: Overview of the responses to the consultation,' and the FSB's statement, 'Policy proposals to enhance money market fund resilience: Final report.' The summary document, 'Policy proposals to enhance money market fund resilience - Overview of the responses to the consultation,' states, 'The consultation report with policy proposals to enhance MMF resilience was published on 30 June 2021 and the comment period closed on 16 August. The FSB received responses from various stakeholders, the large majority of which came from fund managers and their trade associations (mainly in the US and Europe). The remaining responses came from banks or banking associations, and from other trade associations and think tanks. All non-confidential responses have been published on the FSB's website."
It explains, "In general, the FSB's view is that substantial changes are not needed to the report in response to consultation feedback, as it did not introduce major new elements to the analysis. Respondents from outside the asset management industry were generally in favor of further MMF reforms. By contrast, responses from the industry were generally against MMF reforms other than the removal of ties between regulatory liquidity thresholds and the ability to impose fees and gates, although many industry respondents expressed agreement with the use of mechanisms to allocate liquidity costs to redeeming investors (and especially anti-dilution levies), and to a lesser extent with the removal of stable net asset value (NAV) MMFs. Most respondents also expressed support for work to enhance the functioning of short-term funding markets (STFMs). This document summarizes the comments raised in the public consultation and sets out the main changes made to the final report in order to address them."
MFI also includes the News brief, "Money Fund Assets Retake $5 Trillion." It says, "Crane Data's MFI XLS shows assets up $20.5 billion in October to $5.005 trillion. It's the third straight month of modest inflows and the highest asset level since May 2021."
Another News brief, "Oct. MF Portfolio Holdings: Repos Surpass Treasuries," comments, "Crane Data's October Money Fund Portfolio Holdings, with data as of Sept. 30, 2021, show Repo jumping for the 8th month in a row and Treasury holdings plunging for the 6th straight month."
Our November MFI XLS, with Oct. 31 data, shows total assets increased $20.5 billion to $5.005 trillion, after decreasing $878 million in September and increasing $27.9 billion in August. Assets decreased $12.4 billion in July and $73.0 billion in June. They also 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 and $11.7 billion in November. 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 0.08%. Charged Expenses averaged 0.07% for the Crane MFA and the Crane 100. (We'll revise expenses Monday once we upload the SEC's Form N-MFP data for 10/31.) The average WAM (weighted average maturity) for the Crane MFA was 37 days (up 2 days) while the Crane 100 WAM rose three days to 38 days). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
