The July issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Monday morning, features the articles: "AFP's 2023 Liquidity Survey: Deposits Plunge, MMFs Jump," which discusses the annual survey of corporate treasurers; "Money Fund Symposium '23: Funds Party Like 1999," which quotes highlights from our recent big show in Atlanta; and, "ICI Worldwide: MFs Jump in Q1 Led by US, China, France," which reviews money fund markets outside the U.S. We also sent out our MFI XLS spreadsheet Monday a.m., and we've updated our Money Fund Wisdom database with 6/30/23 data. Our July Money Fund Portfolio Holdings are scheduled to ship on Wednesday, July 12, and our July Bond Fund Intelligence is scheduled to go out on Monday, July 17. (Reminder: Please join us on July 27 at 2pm Eastern for a "Money Fund Wisdom Demo & Training" session, where we'll review Crane Data's product suite and database query system with a focus on our MFI Daily asset series.)
MFI's "Liquidity Survey" article says, "The Association for Financial Professionals, a group representing corporate treasurers, published its '2023 AFP Liquidity Survey' last month. The cover letter explains, 'Invesco is very proud to partner once again with the Association for Financial Professionals (AFP) to sponsor the 2023 AFP Liquidity Survey Report, the 18th annual exploration of current and emerging corporate cash management trends.... [L]iquidity investors once again continued to face a remarkable -- and quickly changing -- investment landscape, from aggressive monetary tightening by central banks around the globe to sharply higher stock and bond market volatility to the collapse of several high-profile banks.'"
The introduction states, "This year's survey identifies a number of interesting, high-level themes: Corporate liquidity reserves remain near record highs, taking advantage of rapidly rising yields and principal safety in the uncertain market environment. Cash allocations have been shifting from bank deposits to money market funds in response to the 2023 banking crisis, [and] Caution remains a dominant theme, as companies continue to navigate inflationary pressures, slowing global economies and elevated uncertainties around macro risks."
We write in our MF Symposium recap, "Crane Data recently hosted its big Money Fund Symposium show in Atlanta, where over 530 money market professionals discussed rates, pending reforms, asset inflows and a number of other hot topics in cash. The opening session, 'Keynote: The Elevation of Money Funds II,' featured Invesco's Laurie Brignac and Tony Wong. Brignac comments, 'There was a difference in flows. When you started to see the Fed raise rates as quickly as they did, obviously, we know the storyline around bank deposits. But also, the volatility in the market spiked, and you also saw retail investors turn more risk-off. That's when you saw the retail flows. So, yeah, it has been a story of two sets of flows for different reasons.' (Note: Conference materials and recordings are available in our 'Money Fund Symposium 2023 Download Center.')"
It continues, "Asked about fears over bank deposits and money funds, Wong tells us, 'I think the fear factor was very high. From folks that were in money market liquidity products, we certainly had a number of calls. I personally went and had conversations with policymakers, regulators in this period.... We need a healthy and strong banking sector to impact credit creation and economic [growth].... I think it's manageable, but if we continue to see tightening by the Fed.... We all have years of experience and when you see tightening ... things usually break.... Something tells me maybe that's [SVB and Credit Suisse] not the final chapter of the movie. It's something we're watching carefully.'"
Our "Worldwide" piece states, "ICI's 'Worldwide Regulated Open-Fund Assets and Flows, First Quarter 2023' shows that money fund assets globally jumped by $610.0 billion, or 6.9%, in Q1'23 to $9.461 trillion. The jump was led by gains in the U.S., China, France and Luxembourg. Money funds in Ireland were lower. MMF assets worldwide increased by $825.6 billion, or 9.6%, in the 12 months through 3/31/22, and money funds in the U.S. now represent 55.4% of worldwide assets."
ICI's release says, "Worldwide regulated open-end fund assets increased 5.0% to $63.12 trillion at the end of the first quarter of 2023, excluding funds of funds. Worldwide net cash inflow to all funds was $706 billion in the first quarter, compared with $122 billion of net inflows in the fourth 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 first quarter of 2023 contains statistics from 46 jurisdictions.'"
MFI also includes the News brief, "SEC to Vote on MMF Reforms 7/12." It states, "The SEC meets on Money Market Fund Reforms, Wed., July 12 at 10am. Their notice says, 'The Commission will consider whether to adopt amendments to certain rules that govern money market funds and related form amendments.'"
Another News brief, "Assets & Yields Grind Higher in June," tells readers, "Assets rose $6.9 billion to (eke out) a record $5.861 trillion according to our MFI XLS. Over 12 months, assets have increased by $875.9 billion, or 17.6%. (ICI's latest weekly series shows MMF assets rebounding to a record $5.47 trillion following 3 weeks of declines.) Yields inched higher; our Crane 100 rose to 4.94%."
A third News brief, "MarketWatch on $6 Trillion Pile of Cash." says, "The article, 'Why this $6 trillion pile of cash isn't heading for stocks any time soon,' explains, 'Even with U.S. stocks in a new bull market, investors aren't showing many signs of backing away from money-market funds and other cash-like investments offering yields of about 5%, the highest in about 15 years. Money-market funds hit a record of $5.9 trillion in assets as of Tuesday [6/13], signaling a continuing drain out of bank deposits into higher-yielding 'cash-like' investments, according to Peter Crane.... He expects the tally soon to eclipse $6 trillion and then to stay elevated, even though money-market assets already grew almost 18% in May from a year ago. 'It's clear that bank deposits have sprung a leak,' Crane said.'"
A sidebar, "Fed Z1 Shows Household Jump," states, "The Federal Reserve's latest quarterly 'Z.1 Financial Accounts of the United States' statistical survey (a.k.a. 'Flow of Funds') for the First Quarter 2023, which includes 4 tables on money market mutual funds, shows that Total MMF Assets increased by $470 billion to $5.693 trillion in Q1'23. The Household Sector, by far the largest investor segment with $3.366 trillion, saw the biggest asset increase in Q1, followed by Nonfinancial Corporate Businesses. The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also showed noticeable increases for the Other Financial Business (formerly Funding Corps), the Rest of World and the Mutual Fund categories in Q1 2023."
Our July MFI XLS, with June 30 data, shows total assets increased $6.9 billion to a (barely) record $5.861 trillion, after increasing $152.7 billion in May, $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 6 bps to 4.81%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 4 bps to 4.94% in June. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 5.10% and 5.02%, 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 6/30/23.) The average WAM (weighted average maturity) for the Crane MFA was 24 days (up 2 days from previous month) while the Crane 100 WAM was up 3 at 23 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
