The July issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Friday morning, features the articles: "AFP 2022 Liquidity Survey: Banks, MMFs Still Dominate," which discusses the results of a poll of corporate treasurers on cash investing; "Money Fund Symposium '22: Focus on D&I, Rates, Reforms," which covers our recent big conference in Minneapolis; and, "Worldwide MF Assets Fall in Q1, Led by US, Ireland, Lux," which reviews the latest statistics on international money fund markets. We also sent out our MFI XLS spreadsheet Friday morning, and we've updated our database with 6/30/22 data. Our July Money Fund Portfolio Holdings are scheduled to ship on Tuesday, July 12, and our July Bond Fund Intelligence is scheduled to go out on Friday, June 15. (Note: Our MFI, MFI XLS and Crane Index products are all available to subscribers via our Content center.)
MFI's "Liquidity Survey" article says, "The Association for Financial Professionals published its '2022 AFP Liquidity Survey' last month, which polls corporate treasurers on cash management practices and preferences. They explain, 'The typical organization currently maintains 55% of its short-term investments in bank deposits, slightly higher than the 52% reported in 2021 and 51% in 2020.'" (See AFP's press release and our June 22 News, "More AFP Liquidity Survey: Yield No. 1 Factor for Money Funds.")
AFP writes, "When interest rates dropped to zero at the beginning of the pandemic in the spring of 2020, bank relationships were key as organizations needed to draw down on liquidity.... With inflation relatively high, the Federal Reserve has already raised interest rates. Treasury professionals will continue to rely on relationships with their financial institutions as low yields provide little appetite for companies to move away from bank deposits. Companies maintain their investments in relatively few vehicles. Organizations invest in an average of 2.5 vehicles for their cash and short-term investments -- a figure unchanged from the 2.5 reported in 2021."
Our "Symposium" piece explains, "Crane Data recently hosted its 14th annual Money Fund Symposium conference in Minneapolis, which brought together over 420 money fund and cash investment professionals to discuss the latest involving rising rates, pending money fund reforms, and ESG/D&I money fund issues. (Note: Thanks to those who attended Money Fund Symposium! The recordings are available in our 'Money Fund Symposium 2022 Download Center <i:https://cranedata.com/publications/mfsymposium-2022>`_,' and mark your calendars for next year's MFS, June 21-23, 2023, in Atlanta.) We quote from some of the highlights below <b:>`_."
It continues, "The 'Major Money Fund Issues 2022' session featured Federated Hermes' Deborah Cunningham, Dreyfus' John Tobin and Northern Trust AM's Peter Yi. Yi says, 'Northern Trust has had a really rich history in D&I [diversity & inclusion] and social impact strategies. We've been doing diversity-type exposures for probably 30, 40 years.... More relevant to money market mutual funds, ... back in 2014, we were fortunate enough to partner with Williams Capital at the time, now Siebert Williams Shank (SWS), and it's been a great partnership. It's allowed our liquidity investors to help support these minority and women owned financial firms.... Those share classes have grown exponentially.... To your point, we've been really focused on diversity, as well as equality and inclusion."
Our "Worldwide" piece states, "ICI published 'Worldwide Regulated Open-Fund Assets and Flows, Q1'22,' which shows that money fund assets globally fell by $198.0 billion, or -2.2%, in Q1'22 to $8.635 trillion. The decreases were led by drops in money funds in the U.S., France and Luxembourg. Meanwhile, money funds in China and Brazil increased. MMF assets worldwide increased by $156.4 billion, or 1.8%, in the 12 months through 3/31/22, and money funds in the U.S. represent 53.2% of worldwide assets. We review the latest Worldwide MMF totals, below."
ICI's release says, "Worldwide regulated open-end fund assets decreased 4.6% to $67.80 trillion at the end of the first quarter of 2022, excluding funds of funds. Worldwide net cash inflow to all funds was $81 billion in the first quarter, compared with $1.1 trillion of net inflows in the fourth quarter of 2021. The Investment Company Institute compiles worldwide regulated open-end fund statistics on behalf of the International Investment Funds Association (IIFA), the organization of national fund associations. The collection for the first quarter of 2022 contains statistics from 46 jurisdictions."
MFI also includes the News brief, "Money Fund Yields Hit 1.2%, Top Funds Over 1.5%; Sweeps Up to 0.15%." It tells readers, "Money market fund yields doubled in June, driven by the Fed's 75 bps rate hike June 15. They continue to grind higher, and should jump again late this month following the next rate move. The 7-Day Yield Average for our flagship Crane 100 Money Fund Index rose by 59 bps to 1.18% last month (it has since risen to 1.2%). Brokerage sweep rates also jumped as Fidelity and others hiked FDIC insured sweep rates."
Another News brief, "Assets Rebound in June," explains, "MFI XLS shows assets rising $31.9 billion in June to $4.996 trillion (after falling $14.7 billion in May and $69.4 billion in April). YTD, MMFs are down by $175.2 billion, or 3.4%. ICI's new weekly 'Money Market Fund Assets' report shows assets up in the latest week."
A sidebar, "Fed Z.1 Shows Big Drop in Household, Business MMFs," states, "The Federal Reserve's First Quarter 2022 'Z.1 Financial Accounts of the United States <i:https://www.federalreserve.gov/releases/z1/default.htm>`_' statistical survey shows that Total MMF Assets decreased by $115 billion to $5.091 trillion in Q1'22. The Household Sector, by far the largest investor segment, saw the biggest asset decrease in Q1. The second largest segment, Nonfinancial Corporate Businesses, also experienced a drop in assets."
Finally, another sidebar, "MSRB: Muni MMFs Shrink," explains, "A press release, '`MSRB Research Reveals Significant Shifts in Municipal Securities Ownership,' explains, '[T]he `Municipal Securities Rulemaking Board (MSRB) examines trends in municipal securities ownership since 2004, revealing a continuous decline in individual investor direct ownership of municipal securities while ownership through funds has steadily risen.... [T]he MSRB found that ownership among banks, insurance companies, money market funds and foreign investors has also shifted."
Our July MFI XLS, with June 30 data, shows total assets increased $31.9 billion to $4.996 trillion, after decreasing $10.7 billion in May and $74.3 billion in April. MMFs increased $24.1 billion in March, decreased $34.6 billion in February and decreased $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. Our broad Crane Money Fund Average 7-Day Yield was up 50 bps to 0.97%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 59 bps to 1.18% in June.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 1.33% and 1.44%, respectively. Charged Expenses averaged 0.38% and 0.26% for the Crane MFA and the Crane 100. (We'll revise expenses on Monday once we upload the SEC's Form N-MFP data for 6/30/22.) The average WAM (weighted average maturity) for the Crane MFA was a record low 23 days (down 2 days from previous month) while the Crane 100 WAM decreased 1 day to 24 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
