Crane 100 Inches Up to 0.59%
Money market fund yields continue to inch higher following a surge early in May in reaction to the Fed's 50-basis-point move. The 7-Day Yield Average for our flagship Crane 100 Money Fund Index rose to 0.59% in the week ended Friday, June 3. The average had been 0.55% the prior week, 0.21% on April 29, 0.15% on March 31 and 0.02% on February 28 (where it had been for almost 2 years prior). Brokerage sweep rates also remained steady over the past week. Our latest Brokerage Sweep Intelligence shows the average rate was 0.05% (on FDIC insured deposits), up from 0.04% two weeks ago and up from 0.01% a month ago. We review the latest money fund and brokerage sweep yields below. The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 674), shows a 7-day yield of 0.48%, up 2 basis points in the week through Friday. The Crane Money Fund Average is up 33 bps from 0.15% at the beginning of May. Prime Inst MFs were up 2 bps to 0.65% in the latest week, and up 41 bps from the start of May. Government Inst MFs rose by 1 bp to 0.54%, they are up 37 bps from the beginning of May. Treasury Inst MFs rose by 3 bps to 0.52%, up 33 bps from the beginning of May. Treasury Retail MFs currently yield 0.31%, (up 2 bps for the week, and up 25 bps from the start of May), Government Retail MFs yield 0.26% (up 1 bps for the week, and up 22 bps from the beginning of May), and Prime Retail MFs yield 0.48% (up 2 bp for the week, and up 34 bps from the start of May), Tax-exempt MF 7-day yields dropped by 5 bps to 0.37%, they were up 23 bps since the beginning of May. Our Crane Brokerage Sweep Index, the average rate for brokerage sweep clients (all of which are swept into FDIC insured accounts), remained at 0.05%. This follows increases over the past 3 weeks and follows 2 straight years of yields at 0.01%. Sweep yields were 0.12% on average at the end of 2019 and 0.28% on average at the end of 2018. The latest Brokerage Sweep Intelligence, with data as of June 3, shows no changes over the previous week but one change over the two weeks prior -- Ameriprise increased its rates to 0.02% for balances over $100K (and to 0.03% for balances over $5M). And a number of brokerages increased rates over the three weeks prior. Three weeks ago, Brokerage Sweep Intelligence reported that Fidelity hiked its FCash brokerage account rate to 0.25% across all tiers. (Rates on its default sweep Cash Management Account also rose to 0.25%.) We also showed that Raymond James increased rates from 0.01% to 0.02% for balances under $25K, to 0.03% for balances under $100K, to 0.05% for balances under $500K and to 0.08% for balances $500K to $2.5 million. Also, RW Baird increased its sweep rates from 0.03% to 0.10% for the week ended May 13. Six of 11 major brokerages still offer rates of 0.01% for balances of $100K (and most other tiers). These include: E*Trade, Merrill Lynch, Morgan Stanley, Schwab, TD Ameritrade, and UBS. (Wells moved its rates to 0.02% three weeks ago.) According to Monday's Money Fund Intelligence Daily, with data as of Friday (6/3), just 78 funds (out of 821 total) still yield 0.00% or 0.01% with assets of $63.4 billion, or 1.3% of total assets. (This compares to 593 funds with $2.623 trillion yielding 0.00% or 0.01% at the beginning of the year.) There were 31 funds yielding between 0.02% and 0.09%, totaling $33.8B, or 0.7% of assets; 38 funds yielded between 0.10% and 0.19% with $30.4 billion, or 0.6% of assets; 258 funds yielded between 0.20% and 0.49% with $1.216 trillion in assets, or 24.5%; 366 funds yielded between 0.50% and 0.79% with $3.032 trillion in assets, or 61.1%; and just 50 funds yielded 0.80% or higher with $586.6 billion in assets or 11.8%; four funds yielded over 0.90%.
