Fitch Ratings updated its "U.​S. ESG Money Market Funds: 4Q21" quarterly. The release states, "As of Dec. 31, 2021, total U.​S. ESG money market fund (​MMF) assets under management (​AUM) were $​9.​0 billion. The AUM increased by $​57.​0 million in 4Q21, or 0.​6%, while overall prime MMF AUM decreased by 6.​4%. Gross yields of ESG MMFs averaged 15 basis points (​bps) in 4Q21, 2 bps lower than non-​ESG MMFs, due to ESG MMFs' reduced investable universe. ESG MMFs' net yields averaged 4 bps during the quarter, which is 1 bp higher than comparable non-​ESG MMFs due to lower expense ratios at the ESG funds. Yields have risen in recent weeks, as the market has begun to expect a quicker pace of monetary policy tightening. ESG MMFs' gross and net yields were up 3 bps and 2 bps, respectively, between Oct. 29, 2021 and Feb. 9, 2022, while non-​ESG MMFs' gross and net yields rose 2 bps and 1 bp, respectively, over the same period." Fitch adds, "Notable differences between ESG and non-​ESG MMFs in 4Q21 versus prior periods included allocations to BNP Paribas, JP Morgan, Sumitomo Mitsui Trust Bank, National Bank of Canada and Bank of America, all of which have favorable or improving ESG profiles. The average ESG MMF exposure to these issuers was 19.​4% during this period, while the average non-​ESG MMF exposure was 12.​8%. ESG MMFs' total allocations to these five issuers remained stable, while issuer-​specific allocations changed. Average ESG MMF allocations to BNP Paribas fell 2.​5%, while allocations to JP Morgan rose 2.​4%."

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