The October issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "Third Time's a Charm: Money Funds Turn 50 and Break 3.0%," which discusses money funds 50th birthday and yields at 3.0%; "European Money Fund Symposium: Positive in Paris," which reviews our latest conference on "offshore" money funds; and, "Worldwide MF Assets Fall in Q2'22, Led by US, Ireland, Lux," which quotes from ICI's latest global money fund statistics. We also sent out our MFI XLS spreadsheet Friday a.m., and we've updated our Money Fund Wisdom database with 9/30/22 data. Our October Money Fund Portfolio Holdings are scheduled to ship on Wednesday, Oct. 12, and our October Bond Fund Intelligence is scheduled to go out on Monday, Oct. 17. (Note: Our MFI, MFI XLS and Crane Index products are all available to subscribers via our Content center. Note too: Crane Data and money market funds will be closed Monday for the Columbus Day Holiday.)
MFI's "Third Time's a Charm" article says, "The Federal Reserve raised short-term interest rates by 75 basis points for the third time in a row, to a range of 3.0% to 3.25%, its highest level since 2008. Money fund yields, which of course follow the Fed, are about to hit 3.0% on average, while the top-yielding funds have already broken above this level. Finally, money market mutual funds celebrate their 50th birthday this month ... for the third time."
It continues, "While we mentioned both one year ago and two years ago that money market funds marked their 50th birthday, one could argue that 1972 was the real live date of Reserve Primary Fund, the first money fund. (It filed in October 1970 and went live in October 1971, but it didn't get approval and investors into the fund until October 1972.)"
Our "European" piece goes, "Crane Data hosted its European Money Fund Symposium in Paris last week, and the event focusing on money funds domiciled outside the U.S. attracted a record 166 attendees. Though it was rainy in Paris, spirits were high as rising rates and positive euro yields (for the first time since 2014) out-weighed concerns over potential regulatory changes and sterling gyrations."
It also says, "Our Day 2 agenda began with 'ICI Global & EFAMA Talk Regulatory Issues,' which featured updates from ICI Global's Michael Pedroni and EFAMA's Federico Cupelli. Pedroni explains, 'What I'll do here is give a quick lay of the land of what we see in the pipeline. My observations are really structured around two key considerations.... One is swing pricing.... We don't particularly like swing pricing, and I’ll talk about that. But there is quite a bit of talk among regulatory authorities about implementing swing pricing for money funds. Then the second area is the elimination of the tie between the liquidity thresholds and fees and gates. And just to give a sneak preview, we kind of like that. So those are the two policy issues.'"
Our "Worldwide" update states, "The Investment Company Institute's latest 'Worldwide Regulated Open-Fund Assets and Flows, Second Quarter 2022' shows that money fund assets globally fell by $153.5 billion, or -1.8%, in Q2'22 to $8.482 trillion. The decreases were led by drops in money funds in the U.S., Ireland and Luxembourg. Meanwhile, money funds in China and Australia increased. MMF assets worldwide decreased by $83.0 billion, or -1.0%, in the 12 months through 6/30/22, and money funds in the U.S. represent 53.5% of worldwide assets. We review the latest Worldwide MMF totals, below."
MFI writes, "ICI's release says, 'Worldwide regulated open-end fund assets decreased 11.5% to $59.91 trillion at the end of the second quarter of 2022, excluding funds of funds. Worldwide net cash outflow to all funds was $130 billion in the second quarter, compared with $79 billion of net inflows in the first quarter of 2022. 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 [Q2'22] contains statistics from 46 jurisdictions.'"
MFI also includes the News brief, "WSJ's Zweig Says Cash Is Not Trash. The Wall Street Journal writes 'Three Ways You Can Cash In on Cash.' Columnist Jason Zweig tells us, 'Cash isn't trash anymore. With stocks -- and just about every other asset -- taking a beating this year, even the most aggressive investors can suddenly see the virtue of keeping some money liquid and safe from market turmoil. And, at long last, your cash can earn income you don't need a microscope to detect.'"
Another News brief, "Money Fund Charged Expense Ratios (Exp%) Inched Lower," says, "Money Fund Charged Expense Ratios (Exp%) Inched Lower in August to 0.38% from 0.41% the prior month (after jumping earlier this year from 0.08% at the start of 2022). Our Crane 100 Money Fund Index and Crane Money Fund Average were 0.26% and 0.38%, respectively, as of Aug. 31, 2022. Crane Data revises its monthly expense data and gross yield information after the SEC updates its latest Form N-MFP data the morning of the 6th business day of the new month. (We'll revise our latest monthly MFI XLS spreadsheet and historical craneindexes.xlsx averages file to reflect the latest expenses, gross yields, portfolio composition and maturity breakout on Tuesday.)"
Also, a sidebar, "SSGA to Liquidate ESG MMF," states, "A Prospectus Supplement filing for State Street ESG Liquid Reserves Fund states, 'The Trust's Board of Trustees has approved a Plan of Liquidation and Termination of Series with respect to the Fund, pursuant to which the Fund is expected to be liquidated and terminated on or about October 28, 2022. The Plan authorizes the Fund and its investment adviser, SSGA Funds Management, Inc., to engage in such transactions as may be appropriate for the Fund's liquidation and dissolution."(For more on ESG & Social Money Market Funds, see our May 12 Crane Data News, and hotlinks at the end of that story, "UBS AM Explains Sustainability in Liquidity; Federated Adds SGD Shares.")
Another sidebar, "French MMFs Hit by Outflows," says, "Moody's Investors Service published 'French MMFs' H1 asset contraction exceeds that of European peers,' which explains, 'French money market funds (MMF) lost about 12% of their assets under management (AUM) in the first half of 2022, more than their European peers. This reflects investor withdrawals in response to rising inflation and to satisfy margin calls triggered by Ukraine-related ... turbulence.'"
Our October MFI XLS, with September 30 data, shows total assets increased $1.7 billion to $5.043 trillion, after increasing $2.3 billion in August, $26.0 billion in July and $31.9 billion in June, but 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. Our broad Crane Money Fund Average 7-Day Yield was up 51 bps to 2.42%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 61 bps to 2.63% in September.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 2.79% and 2.86%, respectively. Charged Expenses averaged 0.38% and 0.26% for the Crane MFA and the Crane 100. (We'll revise expenses on Tuesday once we upload the SEC's Form N-MFP data for 9/30/22.) The average WAM (weighted average maturity) for the Crane MFA was a record low 18 days (down 1 day from previous month) while the Crane 100 WAM decreased 2 days to 17 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
