The January issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Monday morning, features the articles: "Money Fund Assets Hit Record $5.2 Trillion, Break 2020 High," which reviews the recent surge in MMFs; "Worldwide MF Assets Plunge in Q3'22, Led by China, France," which reviews ICI's latest global money fund asset data; and, "Top Money Funds of 2022; 14th Annual MFI Awards," which covers the highest performing money funds this past year. We also sent out our MFI XLS spreadsheet Monday a.m., and we've updated our Money Fund Wisdom database with 12/31/22 data. Our January Money Fund Portfolio Holdings are scheduled to ship on Wednesday, Jan. 11, and our January Bond Fund Intelligence is scheduled to go out on Friday, Jan. 13.

MFI's "Assets Hit Record" article says, "Money market mutual fund assets jumped to record levels in December and early January. Our Money Fund Intelligence XLS shows assets rising by $70.2 billion last month to an all-time high of $5.184 trillion, and our MFI Daily shows total money fund assets rising by $40.2 billion more in January 2023 (through 1/5) to $5.231 trillion. The latest asset surge breaks May 2020's and December 2021's previous record highs."

It continues, "Assets increased by $47.7 billion in November and by $34.9 billion in October. But according to our MFI XLS, money fund assets increased by just $12.3 billion, or 0.2%, in 2022 (after being in negative territory for most of the year). Taxable Retail MFs increased by $156.2 billion (10.8%) to $1.598 trillion, Taxable Institutional MFs fell by $168.9 billion (-4.6%) to $3.466 trillion, and Tax-Exempt money fund assets rose by $25.0 billion (26.6%) to $119.2 billion."

Our "Worldwide" piece states, "The Investment Company Institute's 'Worldwide Regulated Open-Fund Assets and Flows, Third Quarter 2022' shows that money fund assets globally fell by $176.8 billion, or -2.1%, in Q3’22 to $8.305 trillion. The decreases were led by sharp drops in money funds in China, France, Luxembourg and Ireland. Meanwhile, money funds in the U.S. and Mexico increased. MMF assets worldwide decreased by $145.3 billion, or -1.7%, in the 12 months through 9/30/22, and money funds in the U.S. now represent 55.0% of worldwide assets."

It continues, "ICI's release says, 'Worldwide regulated open-end fund assets decreased 6.1% to $56.19 trillion at the end of the third quarter of 2022, excluding funds of funds. Worldwide net cash outflow to all funds was $33 billion in the third quarter, compared with $146 billion of net outflows in the second 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 the second quarter of 2022 contains statistics from 46 jurisdictions.'"

Our "Top Money Funds" piece states, "This issue recognizes the top performing money funds, ranked by total returns, for calendar year 2022, as well as the top funds for the past 5‐year and 10‐year periods. We present the funds below with our annual Money Fund Intelligence Awards. These are given to the No. 1‐ranked funds based on 1‐year, 5‐year and 10‐year returns, through Dec. 31, 2022, in each of our major fund categories -- Prime Institutional, Government Institutional, Treasury Institutional, Prime Retail, Government Retail, Treasury Retail and Tax‐Exempt."

MFI writes, "The Top-Performing Prime Institutional fund (and fund overall) was BlackRock Cash Inst MMF SL (BRC01), which returned 1.79%. Excluding private and internal funds, the best performer in 2022 was Allspring Heritage Select (WFJXX) with a return of 1.76%. Among Prime Retail funds, Allspring Money Market Fund Premier (WMPXX) had the best return in 2022 (1.75%)."

MFI also includes the News brief, "Bloomberg on 'Starving for Yield? Check Out Money-Market Funds.'" It says, "If you think high-yield savings accounts offer juicy rates to park some cash, wait until you see what money-market funds are paying. Yields ... spiked from 0.02% earlier this year to more than 3.6% as of early December, according to Crane Data's 100 money-market fund index. After this week’s rate increase by the Federal Reserve, money-market fund yields are poised to soar even higher."

Another News brief, "Federated Hermes' Deborah Cunningham Writes, 'Sweet Spot: Cash Should Still Reign.' She says, 'The liquidity industry's gain from stock and bond investor pain should continue in 2023. In particular, with yields rising with each Federal Reserve hike, money markets should retain their status as an in-demand asset class. Money funds in particular should hit a sweet spot even when hikes cease because they are able to invest further out the yield curve to seek higher yields.'"

A sidebar, "MMF Yields Break 4.0%," states, "Money fund yields jumped higher again last month; our Crane 100 Money Fund Index (7-Day Yield) rose 48 basis points to 4.05% in December. Yields are up from 3.59% on Nov. 30, up from 2.88% on Oct. 31 and up from 2.​68% on Sept. 30. Yields should be flat or inch higher for a few weeks, then jump again after another expected Feb. 1 hike. The top-yielding money market funds have broken above 4.50% should push towards 5% in 2023."

Another sidebar, "Fed Z.1: Household MFs Jump," says, "The Federal Reserve's latest quarterly 'Z.1 Financial Accounts of the United States' statistical survey shows that Total MMF Assets increased by $52 billion to $5.084 trillion in Q3'22. The Household Sector, by far the largest investor segment with $2.781 trillion, saw an asset increase in Q3. The second largest segment, Nonfinancial Corporate Businesses, also experienced a jump in assets. The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also shows asset decreases in MMF holdings for the Other Financial Business and Mutual Funds categories in Q3 2022."

Our January MFI XLS, with December 31 data, shows total assets increased $70.2 billion to $5.184 trillion, after increasing $55.4 billion in November, $42.2 billion in October, $1.7 billion in September, $2.3 billion in August, $26.0 billion in July and $31.9 billion in June. They decreased $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.

Our broad Crane Money Fund Average 7-Day Yield was up 40 bps to 3.87%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 47 bps to 4.05% in December. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 4.19% and 4.19%, respectively. Charged Expenses averaged 0.39% and 0.27% 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 12/31/22.) The average WAM (weighted average maturity) for the Crane MFA was 16 days (unchanged from previous month) while the Crane 100 WAM was lower by one day at 14 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

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