Fidelity Investments filed to liquidate and reorganize most of their State Municipal money market funds, merging the AZ, CT, MI, OH, and PA Muni MMFs into Fidelity Municipal Money Market Fund, and consolidating their CA, MA, NJ and NY State Muni fund offerings. While there haven't been many moves in 2022, there has been a steady stream of exits in the Tax-Exempt money fund space, driven by years of near-zero yields and money fund reforms. Over the past 5 years, the number of Municipal money market funds has dropped from 245 to 150, while the number of State Municipal funds has fallen from 116 to 53. Since June 2008, assets in Muni MMFs have steadily declined from $490.6 billion to $111.4 billion (as of 6/30/22). Fidelity currently manages 33 Municipal MMFs with $28.0 billion; after these mergers go through, the lineup will be reduced to 20 Muni MMFs.
The filing for the $63 million Fidelity AZ Municipal MMF (FSAXX) says, "The Board of Trustees of Fidelity Union Street Trust II has unanimously approved an Agreement and Plan of Reorganization between Fidelity Arizona Municipal Money Market Fund and Fidelity Municipal Money Market Fund pursuant to which Fidelity Arizona Municipal Money Market Fund would be reorganized on a tax-free basis with and into Fidelity Municipal Money Market Fund."
A Prospectus Supplement for the $284 million Fidelity CT Municipal MM (FCMXX) contains similar language and adds, "A Special Meeting of the Shareholders of Fidelity Connecticut Municipal Money Market Fund is expected to be held on or about November 16, 2022 and approval of the Agreement will be voted on at that time. A combined proxy statement and prospectus containing more information with respect to the Reorganization will be provided to shareholders of record of Fidelity Connecticut Municipal Money Market Fund in advance of the meeting."
The filing for the $187 million Fidelity MI Municipal MM (FMIXX) explains, "The Board of Trustees of Fidelity Municipal Trust II and Fidelity Union Street Trust II has unanimously approved an Agreement and Plan of Reorganization between Fidelity Michigan Municipal Money Market Fund and Fidelity Municipal Money Market Fund pursuant to which Fidelity Michigan Municipal Money Market Fund would be reorganized on a tax-free basis with and into Fidelity Municipal Money Market Fund."
Fidelity OH Muni MM Inv ($177M, FOMXX) and Fidelity PA Muni MM Inv ($152M, FPTXX) also filed to merge into Fidelity Municipal Money Market Fund. Their filings tell us, "A Special Meeting of the Shareholders of Fidelity Pennsylvania Municipal Money Market Fund is expected to be held on or about November 16, 2022 and approval of the Agreement will be voted on at that time. A combined proxy statement and prospectus containing more information with respect to the Reorganization will be provided to shareholders of record of Fidelity Pennsylvania Municipal Money Market Fund in advance of the meeting. If the Agreement is approved at the Meeting and certain conditions required by the Agreement are satisfied, the Reorganization is expected to take place on or about December 2, 2022. If shareholder approval of the Agreement is delayed due to failure to meet a quorum or otherwise, the Reorganization will become effective, if approved, as soon as practicable thereafter."
Filings for the $1.1 billion Fidelity CA Municipal MM (FCFXX) and $2.6 billion Fidelity CA AMT Tax-Free MM (FSPXX, FSBXX, FCFXX) state, "On July 14, 2022, the Board of Trustees approved removing the principal investment strategy to 'normally not invest in municipal securities whose interest is subject to the federal alternative minimum tax' effective September 14, 2022. On July 14, 2022, the Board of Trustees approved a name change for the fund. Effective after the close of business on September 16, 2022, Fidelity California AMT Tax-Free Money Market Fund will be renamed Fidelity California Municipal Money Market Fund."
We also learned that the $1.0 billion Fidelity MA Municipal MM (FDMXX) will merge into the $1.25 billion Fidelity MA AMT Tax-Free MM (FMSXX, FMAXX and FMHXX), which will then be renamed (back to) Fidelity MA Municipal Money Market. The $386 million Fidelity NJ Municipal MMF (FNJXX) will merge into the $419 million Fidelity NJ AMT Tax-Free MM (FSJXX, FSKXX, FNNXX). Also, the $876 million Fidelity NY Municipal MM (FNYXX) will merge into the $1.5 billion Fidelity NY AMT Tax-Free MM (FSNXX, FNKXX and FNOXX).
For more on recent liquidations (or the lack thereof) in the space, see our Crane Data News pieces: "Ivy Funds Liquidating ... Again (6/2/22); "AIG Govt MMF, MuniFund Liquidate (8/3/21), "Western Files to Liquidate Tiny MMFs (6/7/21), "BlackRock Liquidates Ready Assets (2/11/21), "Delaware Liquidates Govt Cash Mgmt" (1/11/21); "DWS Liquidating Govt CR (BIRXX)" (11/25/20); "BMO Liquidating Inst Prime MMF" (11/17/20); "Morgan Stanley NY Muni MM Gone" (10/5/20); "SEC's Blass on Push for More MMF Reforms; Vanguard Liquidating PA, NJ" (9/28/20) and "Franklin, Legg Mason Deal Signals More Consolidation; More Liquidations (2/20/20).
In other news, Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of July 15) includes Holdings information from 62 money funds (down 9 from two weeks ago), which represent $2.093 trillion (down from $2.527 trillion) of the $4.989 trillion (41.9%) in total money fund assets tracked by Crane Data. (Our Weekly MFPH are e-mail only and aren't available on the website. See our July 13 News, "July Portfolio Holdings: Fed Repo in MMFs Breaks $2.0 Tril; T-Bills Down," for more.)
Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Repurchase Agreements (Repo) totaling $1.100 trillion (down from 1.281 trillion two weeks ago), or 52.6%; Treasuries totaling $721.2 billion (down from $947.5 billion two weeks ago), or 34.5%, and Government Agency securities totaling $118.9 billion (down from $133.8 billion), or 5.7%. Commercial Paper (CP) totaled $47.8 billion (down from two weeks ago at $52.0 billion), or 2.3%. Certificates of Deposit (CDs) totaled $37.0 billion (down from $40.8 billion two weeks ago), or 1.8%. The Other category accounted for $44.9 billion or 2.1%, while VRDNs accounted for $22.3 billion, or 1.1%.
The Ten Largest Issuers in our Weekly Holdings product include: the Federal Reserve Bank of New York with $858.6 billion (41.0%), the US Treasury with $721.2 trillion (34.5% of total holdings), Federal Home Loan Bank with $72.3B (3.5%), Federal Farm Credit Bank with $40.8B (2.0%), BNP Paribas with $36.1B (1.7%), RBC with $30.2B (1.4%), Fixed Income Clearing Corp with $21.5B (1.0%), Mitsubishi UFJ Financial Group Inc with $15.5B (0.7%), Credit Agricole with $14.1B (0.7%) and Sumitomo Mitsui Banking Corp with $12.8B (0.6%).
The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($244.6B), Goldman Sachs FS Govt ($208.9B), Morgan Stanley Inst Liq Govt ($175.2B), Dreyfus Govt Cash Mgmt ($118.3B), Fidelity Inv MM: Govt Port ($116.9B), Goldman Sachs FS Treas Instruments ($107.4B), Allspring Govt MM ($102.7B), State Street Inst US Govt ($99.0B), JPMorgan 100% US Treas MMkt ($85.7B) and First American Govt Oblg ($82.3B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary, or our Bond Fund Portfolio Holdings data series.)
