Money Fund Yields Climb to 2.86%
Money fund yields climbed again last week -- our Crane 100 Money Fund Index (7-Day Yield) rose 4 basis points to 2.86% in the week ended Friday, 10/28. Yields rose by 6 basis points the previous week and are up from 2.66% on Sept. 30. On average, they're up from 2.01 on August 31, up from 1.57% on July 29, up from 1.18% on June 30 and from 0.58% on May 31. MMF yields are up from 0.21% on April 29, 0.15% on March 31 and 0.02% on February 28 (where they'd been for almost 2 years prior). Yields continue to inch higher as they digest the Fed's Sept. 21 75 bps rate hike, and they should jump again later this week after the Fed hikes rates again on Nov. 2. Our broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 677), shows a 7-day yield of 2.77%, up 5 bps in the week through Friday. The Crane Money Fund Average is up 174 bps since beginning of July and up 230 bps from 0.47% at the beginning of June. Prime Inst MFs were up 3 bps to 2.96% in the latest week, up 169 bps since the start of July and up 232 bps since the start of June (close to double from the month prior). Government Inst MFs rose by 4 bps to 2.79%, they are up 169 bps since start of July and up 225 bps since the start of June. Treasury Inst MFs up 8 bps for the week at 2.84%, up 180 bps since beginning of July and up 234 bps since the beginning of June. Treasury Retail MFs currently yield 2.62%, (up 8 bps for the week, up 182 bps since July and up 232 bps since June), Government Retail MFs yield 2.54% (up 4 bps for the week, up 175 bps since July started and up 228 bps since June started), and Prime Retail MFs yield 2.80% (up 3 bps for the week, up 173 bps from beginning of July and up 232 bps from beginning of June), Tax-exempt MF 7-day yields dropped by 9 bps to 1.85%, they are up 129 bps since the start of July and up 147 bps since the start of June. According to Monday's Money Fund Intelligence Daily, with data as of Friday (10/28), 100 funds (out of 816 total) still yield between 0.00% and 1.99% with assets of $53.8 billion, or 1.1% of total assets; 150 funds yield between 2.00% and 2.49% with $291.4 billion in assets, or 5.8%; 407 funds yielded between 2.50% and 2.99% with $3.277 trillion, or 64.8%; and 159 funds yielded 3.00% or more ($1.432 trillion, or 28.3%). Brokerage sweep rates remained mostly unchanged over the past week. Our Crane Brokerage Sweep Index, the average rate for brokerage sweep clients (almost all of which are swept into FDIC insured accounts; only Fidelity sweeps to a money market fund), was unchanged this past week at 0.34%. The latest Brokerage Sweep Intelligence, with data as of Oct. 14, shows just one rate change over the previous week. Ameriprise Financial Services increased rates to 0.90% for all balances between $1 million and $4.9 million and to 1.25% for all balances over $5 million. Just 3 of 11 major brokerages still offer rates of 0.01% for balances of $100K (and most other tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
