The June issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Wednesday morning, features the articles: "Money Fund Assets Break $5.8 Trillion; $6.0 Trillion or Bust," which discusses the continued growth of MMFs; "ICI 2023 Fact Book Shows Money Fund Trends in '22," which quotes from the Institute's annual statistics summary; and, "SEC Chair Gensler on Bears, Runs, Money Funds at ICI," which covers Gary Gensler's recent speech. We also will send out our MFI XLS spreadsheet Wednesday a.m., and we've updated our Money Fund Wisdom database with 5/31/23 data. Our June Money Fund Portfolio Holdings are scheduled to ship on Friday, June 9, and our June Bond Fund Intelligence is scheduled to go out on Wednesday, June 14.
MFI's "MMFs Break $5.8 Trillion" article says, "Money fund assets continue their rise to record levels; they broke the $5.8 trillion level in late May and ended the month at $5.845 trillion. Crane Data's `Money Fund Intelligence XLS shows assets increasing by $152.7 billion in May, following gains of $64.2 billion in April and $360.4 billion in March. YTD, MMFs have increased by $676.7 billion, or 13.1%, and they've jumped by $881.4 billion, or 17.8% over 12 months. Today's MFI Daily shows assets hitting a record $5.858 trillion, so we expect the $6.0 trillion barrier to fall within a month or two."
The piece continues, "Taxable Retail MMFs increased by $55.7 billion in May and have grown by $278.1 billion (17.0%) YTD. They've increased by a shocking $515.4 billion, or 36.9%, over 12 months. Inst MMFs increased $92.6 billion last month. They're up $400.0B (11.7%) YTD and $356.3B (10.3%) over one year. Tax Exempt MMFs were up $4.5 billion in May but down $1.5B YTD. Prime MMFs were up $49.7 billion, Govt MMFs were up $144.4 billion, and Treasury MMFs were down $9.4 billion in May."
Our Fact Book article states, "The Investment Company Institute released its '2023 Investment Company Fact Book' an annual compilation of statistics and commentary on the mutual fund space. Subtitled, 'A Review of Trends and Activities in the Investment Company Industry,' the latest edition tells us, 'With stock markets down across the globe in 2022 ... worldwide total net assets of equity funds ... decreased by 20% to $26.9 trillion at year-end 2022. Bond funds -- which invest primarily in fixed-income securities -- saw their total net assets decrease 16% over the same period.... In contrast, net assets of money market funds -- which are generally understood to be regulated funds that are restricted to holding short-term, high-quality debt instruments -- increased slightly.'"
It continues, "Discussing 'Worldwide' mutual funds (page 12), ICI writes, 'Worldwide net sales of money market funds totaled $171 billion in 2022, down from $673 billion in 2021.... The decline in worldwide demand for money market funds was largely driven by a decrease in net sales in the United States and the Asia-Pacific region. Investor demand for money market funds in the United States decreased from $424 billion in 2021 to $10 billion in 2022; and in the Asia-Pacific region, money market funds experienced net inflows of $132 billion in 2022, down from $254 billion in 2021.'"
Our "SEC Chair Gensler" piece states, "Securities & Exchange Commission Chair Gary Gensler spoke recently at the '2023 ICI Leadership Summit.' His talk, entitled, 'Bear in the Woods,' tells us, 'There is a saying when you're in the woods. 'You don't have to outrun the bear; you just have to outrun one of your fellow campers.' ... It also helps explain why savers might try to cash out of deposits before that proverbial bear catches them at the bank.... Runs, when otherwise uncorrelated actors suddenly become correlated, have brought down many a financial firm over time.'"
MFI states, "He explains, 'Registered investment funds have grown to more than $30 trillion, with more than 16,000 funds. More than half of American households and more than 120 million individual Americans own ... funds.... Money market funds came about in the early 1970s.'"
MFI also includes the News brief, "Money Fund Yields Rise to 4.90%; Sweeps Up to 0.46%." It states, "Money fund yields moved higher yet again over the past month as they digested the Federal Reserve's latest 25 basis point rate increase (on 5/2). Our Crane 100 Money Fund Index (7-Day Yield) was up 26 bps to 4.90% in May. Yields are up from 4.64% on April 30, 4.61% on 3/31, 4.05% on 12/31/22 and 2.66% on 9/30/22."
Another News brief, "Money Fund Revenue Hits Record $15.65 Billion (Annualized)," states, "According to our latest asset and charged expense numbers, we estimate that annualized revenue for money funds is at a record $15.646 billion pace (as of 5/31/23), up from $15.143 billion last month and up from $14.135B 3 months ago."
A sidebar, "More ICI Fact Book: Data," states, "On page 1, we review the ICI's '2023 Investment Company Fact Book.' But it also contains numerous 'Data Tables' involving 'Money Market Mutual Funds.' ICI lists annual statistics on shareholder accounts, the number of funds, net assets, net new cash flows, paid and reinvested dividends, composition of prime and government funds, and net assets of institutional investors by type of institution."
Another sidebar, "BlackRock's Fink on MMFs," states, "Last week, Deutsche Bank hosted its 13th annual 'Global Financial Services Conference,' which featured a discussion with BlackRock's Larry Fink. Fink comments, 'More fear means more savings in the short run.' Fink tells the DB event, 'Related to money markets, most of the money went into government funds, almost 95% went into government funds.... The big problem we had over that SVB weekend was, 'Should every corporation who had excess cash sitting in a bank, should they be sweeping it into the holding company every night?' By the way, some companies are now doing that. 'They're sweeping it in ... whether they're using the money market funds of a bank or they're outsourcing a lot more of that.'"
Our June MFI XLS, with May 31 data, shows total assets increased $152.7 billion to $5.845 trillion, after increasing $56.5 billion in April, $345.1 billion in March, $56.0 billion in February, $22.5 billion in January, $70.2 billion in December and $55.4 billion in November. MMFs rose $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 2022.
Our broad Crane Money Fund Average 7-Day Yield was up 23 bps to 4.75%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 26 bps to 4.90% in May. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 5.05% and 4.99%, respectively. Charged Expenses averaged 0.38% and 0.27% for the Crane MFA and the Crane 100. (We'll revise expenses on Thursday once we upload the SEC's Form N-MFP data for 5/31/23.) The average WAM (weighted average maturity) for the Crane MFA was 22 days (up 4 days from previous month) while the Crane 100 WAM was up 4 at 20 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
