The April issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Thursday morning, features the articles: "Yields Move Higher After First Fed Hike; More to Come," which discusses the jump in MMF yields in March; "Bond Fund Symposium Highlights: Carnage in Q1," which quotes from our latest ultra-short bond fund event; and, "Worldwide MF Assets Jump in Q4'21, Led by US, Ireland," which reviews the latest statistics on money market funds domiciled outside the U.S. We also sent out our MFI XLS spreadsheet Thursday morning, and we've updated our database with 3/31/22 data. Our April Money Fund Portfolio Holdings are scheduled to ship on Monday, April 11, and our March Bond Fund Intelligence is scheduled to go out on Thursday, April 14. (Note: Our MFI, MFI XLS and Crane Index products are all available to subscribers via our Content center.)
MFI's "Yields Move article says, "It's been 3 weeks since the Federal Reserve raised its Fed funds rate off of the zero floor, but money funds are already talking about 2% yields. Yields jumped in March, rising from 0.02%, where they'd been for 2 years, to 0.15% on average (as measured by our Crane 100 Index). They now reflect just over half of the 25 bps rate increase, but may not move much more due to fee waivers being reduced. Still, net yields have been surprisingly strong. Given expectations of a 50 bps hike, yields should move higher still next month."
It continues, "The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 741), shows a 7-day yield of 0.09% (as of 3/31/22), up 7 bps in March. Prime Inst MFs were up 13 bps to 0.17% in the past month, while Government Inst MFs rose 8 bps to 0.10%. Treasury Inst MFs rose 9 bps to 0.10%, while Treasury Retail MFs rose just one bp to 0.02%. Government Retail MFs also now yield 0.02% (up 1 bp), but Prime Retail MFs yield 0.09% (up 8 bps for March). Tax Exempt MF 7-​day yields jumped 13 bps to 0.15%."
Our "BFS" update reads, "Crane Data recently hosted its Bond Fund Symposium event in Newport Beach, Calif., which brought together ultra-short bond fund managers, issuers, dealers and investors to discuss a number of short-term fixed-income topics. Thanks again to those who attended and supported BFS! Attendees and Crane Data subscribers may access the Powerpoints, recordings and conference materials via our Bond Fund Symposium 2022 Download Center."
The piece says, "The opening session, 'State of the Bond Fund Marketplace,' featured the Investment Company Institute's Shelly Antoniewicz and Crane Data's Peter Crane. Antoniewicz comments, 'For years and years, we had bond prices rising, rates falling, strong capital gains on bond funds and very, very strong inflows. Then all of a sudden, everything turned around. We had very small capital losses last year on bond funds. Flows sort of held up.... But moving into this year, we had much deeper capital losses on bond funds and flows are turning negative.'"
Our "Worldwide" piece states, "The Investment Company Institute published, 'Worldwide Regulated Open-Fund Assets and Flows, Fourth Quarter 2021,' which shows that money fund assets globally surged by $383.0 billion, or 4.5%, in Q4'21 to $8.833 trillion. The big increase was driven by gains in money funds in the U.S., Ireland, Luxembourg and China. Meanwhile, money funds in Brazil, Korea and Japan decreased. MMF assets worldwide increased by $519.0 billion, or 6.2%, in the 12 months through 12/31/21, and money funds in the U.S. represent 53.8% of worldwide assets. We review the latest Worldwide MMF totals, below."
It continues, "ICI's quarterly says, 'On a US dollar–denominated basis, equity fund assets increased by 5.6% to $33.64 trillion at the end of the fourth quarter of 2021. Bond fund assets increased by 0.6% to $13.72 trillion in the fourth quarter. Balanced fund assets increased by 3.3% to $8.78 trillion in the fourth quarter, while money market fund assets increased by 3.7% globally to $8.83 trillion."
MFI also includes the News brief, "MF Assets Rebound Slightly in March." It says, "Money fund assets rose $24.1 billion in March to $5.033 trillion, after 2 months of steep declines, according to our MFI XLS. YTD, MMFs are down by $138.6 billion, or -2.7%. ICI's latest 'Money Market Fund Assets' shows assets jumping $29.7 billion to $4.590 trillion in the latest week after being flat the previous week and falling sharply the two weeks prior."
Another News brief, "Mass's Galvin Warns on Sweeps." It explains, "The Secretary of the Commonwealth of Massachusetts, William Galvin, issued a release entitled, 'With Rates Rising, Galvin Investigates Whether Investors Are Being Shortchanged,' which warns brokerages about low rates paid on sweep accounts."
Another News brief, "Fed Z.1 Shows Big Jump in Household & Business MMF Assets in Q4," tells readers, "The Federal Reserve's latest quarterly 'Z.1 Financial Accounts of the United States,' statistical survey shows that Total MMF Assets increased by $186 billion to $5.206 trillion in Q4'21. The Household Sector, by far the largest investor segment with $2.944 trillion, saw the biggest asset increase in Q4. The second largest segment, Nonfinancial Corporate Businesses, also experienced a jump in assets."
Our April MFI XLS, with March 31 data, shows total assets increased $24.1 billion to $5.033 trillion, after decreasing $34.6 billion in February and $128.1 billion in January. Assets increased $104.6 billion in December, $49.7 billion in November and $20.5 billion October. MMFs also increased $878 million in September and $27.9 billion in August. Assets decreased $12.4 billion in July and $73.0 billion in June. Our broad Crane Money Fund Average 7-Day Yield was up 7 bps to 0.09%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 13 bps to 0.15%.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 0.21% and 0.26%, respectively. Charged Expenses averaged 0.12% for the Crane MFA and the Crane 100. (We'll revise expenses Friday once we upload the SEC's Form N-MFP data for 3/31/22.) The average WAM (weighted average maturity) for the Crane MFA was 29 days (up 2 days from previous month) while the Crane 100 WAM remained at 29 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
