Daily Links Archives: April, 2019

"Bank of New York Mellon Shares Fall as Interest Rates Dent Profits" writes The Wall Street Journal. They tell us, "Bank of New York Mellon Corp. delivered a grim reminder that shifting Federal Reserve policies and softening long-term interest rates are taking their toll on part of the finance industry. BNY Mellon's disappointing results underline how sensitive financial firms can be to the ebb and flow of interest rates, particularly when increases in short-term rates aren't matched with rising longer-term rates.... For banks and other financial firms that fund themselves with deposits and other short-term loans and put that money to work through loans and longer-term investments, a flattening yield curve can squeeze their interest margins and leave a mark on earnings. At BNY Mellon, net interest revenue fell 8% to $841 million from a year earlier." BNY Mellon Chairman and CEO Charles Scharf comments, "Rates across the entire yield curve declined versus our assumptions, deposit balances declined, and we saw changes to the mix between interest and noninterest-bearing deposits.... We see significant competitive pressure for deposits." The Journal adds, "While Goldman Sachs Group Inc., Bank of America Corp. and other big banks were able to sidestep the brunt of these effects, custodians like BNY Mellon tend to lose clients' deposits faster as rates go up. That is because commercial banks draw more of their short-term funding from retail customers who are slower to pull their money than big companies and institutions. That is especially true for BNY Mellon, which tends to collect more deposits that don't pay interest. As rates rose, more of BNY Mellon's customers moved money out of the bank and into interest-bearing deposits with a higher yield. That shift left BNY Mellon with a bigger slice of their deposits drawing interest; meantime, the average deposit rate rose from a year ago."

A press release put out Tuesday, entitled, "AB Government Money Market Portfolio Celebrates Significant Growth in 2019" and subtitled, "AB Fund Grew by Nearly $2.3 Billion in First Quarter of 2019," tells us, "AllianceBernstein L.P. (AB), a leading investment management and research firm, announced today that the AB Government Money Market Portfolio (GMOXX) has achieved a significant milestone, and at the end of the quarter reported growth of 25 percent or an increase of $2.3 billion, raising the assets of the fund to $9.055 billion as of March 31, 2019. The Government Money Market Portfolio, which has an inception date of June 1, 2016, is designed to create maximum current income while consistently offering the safety of maintaining principal and liquidity. The portfolio provides income in the form of a dividend that generally reflects short-term interest rates, which is accrued daily and paid out monthly. The portfolio currently invests in U.S. government securities and/or repurchase agreements related to government securities that are fully collateralized alongside cash." Zachary Green, Global Head of Liquidity Sales at AB, comments, "With management fees being scrutinized more than ever before, corporate cash managers are also becoming wiser to the rights of set-off risk their companies may be exposed to with bank-sponsored funds. They are rightly looking to identify diversified options that balance net performance, cost, and diversification away from banking relationship that may have become 'too concentrated' over the past few years.... Our flagship Government Money Market Portfolio has successfully offered investors diversification, stability, liquidity and a solution that ensures they are not overly dependent on a single banking relationship. These are all factors that have become even more critical for those seeking better returns and stability in their asset allocation in today's volatile market environment."

Capital Advisors Group writes in their latest paper, "With the Fed on Hold and the Yield Curve Inverted, Thoughts on Cash Investment Portfolios," that "The March Federal Open Market Committee (FOMC) decision was a major market event that directly resulted in an inverted yield curve.... The inverted curve may be an overreaction to the Fed's surprise decision and not an indication of an imminent recession. We advise caution on portfolio duration and suggest a laddered portfolio to improve liquidity and reinvestment opportunity. The halt to the Fed's rate hikes could mean a more challenging credit environment. Credit decisions need to be more selective to weather the next downturn." They add, "It is often said that an inverted curve is a reliable forecasting tool for recessions, and it is generally true. Come June, we will have surpassed the longest economic expansion (120 months) in history, so a recession may be long overdue. As we discussed in the January issue, the curve inverted four times in the last four decades, each followed by a recession. However, an inverted curve had no predictive power over the exact timing of the next recession nor market returns during those periods. This is especially significant for cash investors with moderately short time horizons." The piece concludes, "The yield curve inversion we witnessed in recent days may indicate the market's assessment of events that could potentially derail the base case growth projection rather than the health of the economy itself. The swift change in the shape of the curve could indicate an overaction to the surprise March FOMC decision. And recent research revealed that the yield curve needs to be inverted on average over a quarter, not over a few days, to prove reliable. As managers of short-duration institutional portfolios, we are keenly aware of the effect of interest rate gyrations on client portfolios and the undesirable outcome of an inverted yield curve. Unless convinced that interest rate cuts are forthcoming, few investors would be inclined to invest in longer-term securities at lower yields. Our immediate read on last week's yield curve reaction to the FOMC decision is that there was an element of overreaction, both on rate hikes and the balance sheet. Should incoming economic indicators continue to point to less robust but moderate growth, we expect the inversion in the curve to become less pronounced.... What is perhaps a more relevant portfolio consideration is what a halt to the Fed's interest rate decision means for credit investments. Softness in issuances and widening spreads on speculative grade bonds have been in the press for a while, as has the deteriorating credit quality on certain industrial, auto and real estate loans. While a pause in the Fed's decision may offer some relief to these borrowers through lower credit costs, it is also indicative of a more challenging operating and financing environment in a slower economy. Credit decisions on eligible investments should be more selective in order to weather the next downturn."

The Investment Company Institute released its latest "Money Market Fund Holdings" summary on Monday (with data as of March 29, 2019). This monthly update reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds. (See our April 10 News, "April Money Fund Portfolio Holdings: Treasuries Jump, Repo Plunges.") The MMF Holdings release says, "The Investment Company Institute (ICI) reports that, as of the final Friday in March, prime money market funds held 29.1 percent of their portfolios in daily liquid assets and 42.6 percent in weekly liquid assets, while government money market funds held 60.5 percent of their portfolios in daily liquid assets and 78.4 percent in weekly liquid assets." Prime DLA rose from 25.9% in February, and Prime WLA inched up from 42.4% the previous month. Govt MMFs' DLA rose from 59.7% in February and Govt WLA inched higher from 78.3% that month. ICI explains, "At the end of March, prime funds had a weighted average maturity (WAM) of 38 days and a weighted average life (WAL) of 69 days. Average WAMs and WALs are asset-weighted. Government money market funds had a WAM of 31 days and a WAL of 93 days." Prime WAMs increased by 5 days from the previous month, and WALs rose by 3 days. Govt WAMs increased by 3 days from February levels and Govt WALs also rose by three days the last month. Regarding Holdings By Region of Issuer, ICI's release tells us, "Prime money market funds' holdings attributable to the Americas rose from $273.50 billion in February to $293.06 billion in March. Government money market funds' holdings attributable to the Americas rose from $1,855.33 billion in February to $1,928.80 billion in March." The Prime Money Market Funds by Region of Issuer table shows Americas-related holdings at $293.1 billion, or 46.6%; Asia and Pacific at $119.5 billion, or 19.0%; Europe at $211.3 billion, or 33.6%; and, Other (including Supranational) at $4.6 billion, or 0.7%. The Government Money Market Funds by Region of Issuer table shows Americas at $1.929 trillion, or 82.3%; Asia and Pacific at $109.1 billion, or 4.7%; and Europe at $301.4 billion, or 12.9%.

Financial services firms have begun to report earnings for the first quarter of 2019, but we've yet to see any news on money market funds or cash investments. That should change Monday, though, as Charles Schwab reports its latest numbers. Website AlphaStreet "Earnings preview: Clients to flock Charles Schwab Q1 results." They tell us, "Financial services firm The Charles Schwab Corp. (NYSE: SCHW) is scheduled to report its first-quarter 2019 earnings results on Monday before the market opens. The results will be benefited by higher client cash sweep balances and an increase in clients trading activity. However, the company has experienced certain macroeconomic headwinds during the quarter. This included continued uncertainties from Brexit, US-China trade war, and global economic slowdown expectations. These headwinds have led to lower market volatility that dragged client activity down. On the positive note, most of the investors who were interested to enter the market have ventured in January and February as Schwab has opened 131,000 and 115,000 new brokerage accounts during the two months. This reflected an improvement in the trading revenues for the first quarter." BlackRock also will report earnings on Tuesday, and Federated Investors will report on 4/25. Federated's release says, "Federated Investors, Inc. (NYSE: FII), one of the world's largest investment managers, will report financial and operating results for the quarter ended March 31, 2019 after the market closes on Thursday, April 25, 2019. A conference call for investors and analysts will be held at 9 a.m. Eastern on Friday, April 26, 2019. President and Chief Executive Officer J. Christopher Donahue and Chief Financial Officer Thomas R. Donahue will host the call." We'll be reading the releases and watching for any cash coverage.

The Investment Company Institute released its latest weekly "Money Market Fund Assets" report yesterday, which shows that assets dipped in the latest week, after rising for two weeks. They write, "Total money market fund assets decreased by $8.92 billion to $3.10 trillion for the week ended Wednesday, April 10, the Investment Company Institute reported today. Among taxable money market funds, government funds decreased by $16.15 billion and prime funds increased by $9.37 billion. Tax-exempt money market funds decreased by $2.14 billion." ICI's weekly series shows Institutional MMFs falling $5.7 billion and Retail MMFs falling $3.3 billion. Total Government MMF assets, including Treasury funds, stood at $2.314 trillion (74.7% of all money funds), while Total Prime MMFs rose to $647.1 billion (20.9%). Tax Exempt MMFs totaled $137.5 billion, or 4.4%. ICI states, "Assets of retail money market funds decreased by $3.26 billion to $1.22 trillion. Among retail funds, government money market fund assets decreased by $1.87 billion to $700.65 billion, prime money market fund assets increased by $661 million to $387.55 billion, and tax-exempt fund assets decreased by $2.05 billion to $127.59 billion." Retail assets account for 39.2% of all assets, and Government Retail assets make up 57.6% of all Retail MMFs. The release adds, "Assets of institutional money market funds decreased by $5.66 billion to $1.88 trillion. Among institutional funds, government money market fund assets decreased by $14.27 billion to $1.61 trillion, prime money market fund assets increased by $8.71 billion to $259.52 billion, and tax-exempt fund assets decreased by $94 million to $9.89 billion." Institutional assets accounted for 60.8% of all MMF assets, with Government Institutional assets making up 85.7% of all Institutional MMF totals.

Website Citywire writes that, "Groupama reworks money market fund as ultra short term bond." The article says, "French fund house Groupama has reshaped a money market fund into an ultra-short term bond fund in a bid to open the strategy up to new investors. In line with the change in strategy, the Groupama Cash Equivalents fund has been renamed as the Groupama Ultra Short Term Bond fund. The strategy continues to be eligible as a cash equivalent, which is required to invest in short-term, liquid and easily convertible instruments with little sensitivity to variation risk. The fund targets investment grade bond and money market instruments, denominated in euros with the aim of exploiting sensitivities to interest rates, geographical and sector allocation as well as a rigorous selection of issuers." It adds, "Explaining the decision to rename the fund, the group said it was so that its new designation is closely aligned with the typologies of investors. In addition, the group was looking to internationalise the name of the fund beyond just the French borders."

A press release entitled, "Moody's assigns a Aaa-mf rating to the BlackRock LEAF Fund," tells us, "Moody's Investors Service … assigned a Aaa-mf rating to the BlackRock Liquid Environmentally Aware Fund (LEAF). The money market fund seeks to earn as a high level of current income in US Dollar terms while providing liquidity and the preservation of capital. At least 80% of the fund's net assets, plus any borrowings for investment purposes, will be invested in securities that meet the fund's environmental criteria. The fund also has a number of environmental provisions that limit investments in companies that derive a significant portion of their revenue from non-renewable energy sources. BlackRock Advisors, LLC serves as investment adviser of the fund. Being an environmental fund, this is the first money market fund of such classification to be rated by Moody's." Moody's adds, "The Aaa-mf rating reflects the Fund's high scores across key rating factors including asset quality, fund liquidity and resilience to market risks. The Fund's credit quality is strong as it will primarily invest in treasury debt and commercial paper. Given the investment objective of the fund, we expect the credit quality to remain strong. The Fund's ability to provide liquidity is also very strong and is demonstrated by the high level of expected overnight liquidity/AUM. The Fund limits its interest rate and spread risks by keeping its weighted average maturity (WAM) below 60 days." The rating and the latest Form N-1A Registration for BlackRock LEAF hint that the fund's launch is imminent. BlackRock will charge total expenses after waivers of 0.24% on the Inst class (LEFXX, $2 million minimum) and 0.49% on the Investor A (LEAXX, $1,000 minimum) shares, according to the filing, which indicates that the fund will be a "non-retail" and "non-government" fund (i.e., Prime Institutional). In addition to having a decent claim on being the first purely "environmental" money fund (DWS launched the first ESG money fund late last year), it also appears to be the first to offer a "retail" share class on an Institutional fund. For more, see the following recent Crane Data News articles: "More on Green, ESG Money Funds: What's Not There, Barron's; N-MFP" (2/11/19), "SSGA's 2019 Global Cash Outlook Discusses ESG MMF Challenges, Tech, AI" (2/4/19), "FT Says China's Ant Shrinks; More on BlackRock LEAF; Weekly Holdings" (1/30/19), "BlackRock to Launch Environmental MF; Wells on Prime; SnP on EU Regs" (1/23/19), and "DWS ESG Liquidity Goes Live; Federated Explains Prime Private Fund" (9/17/18).

Last month, the first "Form N-CR" filing of 2019 was disclosed for the SEI Daily Income Trust Treasury Fund, which received a "Capital Contribution" from adviser SEI Investments Management Corporation. The March 8, 2019 filing is in the amount of $56,455.32, and explains the reason as, "The support, in the form of a capital contribution, related to the Treasury Fund's historical losses. While the amount of the losses did not increase recently, more recent redemptions in the Treasury Fund have caused the historical losses to become more material to the net asset value than when the Fund had greater assets. The amount of the support is equal to the difference between the Treasury Fund's net assets and the net asset value per share of $1.0000 multiplied by the number of shares outstanding." (Crane Data's latest Money Fund Intelligence XLS shows SEI Daily Inc Trust Treas Fund F (SEPXX) as just $55 million as of 3/31.) Note that this filing and the handful of previous filings are minor "tweaks" to fund balances, and do not appear to represent any substantial money fund "bailouts." For previous `Crane Data News on Form N-CR filings, see: "MFS U.S. Govt MMF Files Form N-CR" (8/2/18), "Northern on Reforms, Ultra-Short Strategies; First Form N-CR Filings" (12/24/15) and "Dechert Examines Upcoming Form N-CR and Disclosure Requirements" (5/21/15). See too to our Links of the Day: "First American on Form N-CR" (7/22/15) and "Invesco Primer on Form N-CR" (7/14/15). Law-firm Dechert described Form N-CR in a May 2015 publication, "U.S. Money Market Fund Reform: Form N-CR and Related Website Disclosure Compliance Deadline Quickly Approaching." They wrote, "On July 23, 2014, the SEC approved sweeping amendments to Rule 2a-7 and other rules that govern money market funds under the Investment Company Act of 1940. Among other requirements, the SEC adopted new Rule 30b1-8 under the 1940 Act, which will require a money market fund to report information to the SEC regarding certain material events on Form N-CR. Under this new reporting requirement, a money market fund must provide a brief summary of a Material Event within one business day of the occurrence of that Material Event and, for certain Material Events, the fund also must provide a follow-up report that includes more complete information within four business days. Any filings made on Form N-CR will become immediately public on the SEC's EDGAR website. Money market funds will be required to file Form N-CR with the SEC for any Material Events occurring on or after July 14, 2015."

Barron's published "The Best Alternatives to Ultrashort Bond Funds," which says, "There was a time when earning 1% from a short-term bond was acceptable. Five years ago, the average one-year Treasury bill yielded less than 0.2% and many money-market funds paid essentially nothing. Ultrashort-term bond funds, which took on a little more risk, but paid a bit more, were one of the few viable options for conservative investors seeking income from their cash. No longer. Today, after interest rate increases, the one-year Treasury bill yields 2.4%, and there's a question whether ultrashort funds, which buy high-quality bonds with durations of less than one year, can keep up. The average ultrashort fund has only a 1.2% five-year annualized return, according to Morningstar.... If you need an ultrasafe emergency stash and want to earn some income from it, you're better off owning a bank CD or Treasury bills directly." Barron's adds, "One step up in risk are money-market funds, which aren't federally protected, but are so conservative that they have lost money only twice in Wall Street history. Vanguard Prime Money Market (VMMXX), one of the lowest-fee funds, has a current yield of 2.46%. It's more liquid and convenient than owning one-year CDs, which charge early withdrawal penalties.... But ultrashort bond funds are neither as convenient as money markets nor as safe as Treasury bills or CDs, so they should deliver higher returns. As of Feb. 28, the largest ultrashort mutual fund, Pimco Short-Term (PSHAX) at $19 billion, also had a 2.46% 30-day SEC yield."

The Investment Company Institute released its latest weekly "Money Market Fund Assets" report yesterday, which shows that assets rose again in the latest week, after falling two weeks ago. They write, "Total money market fund assets increased by $5.78 billion to $3.11 trillion for the week ended Wednesday, April 3, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $3.52 billion and prime funds increased by $8.42 billion. Tax-exempt money market funds increased by $891 million." ICI's weekly series shows Institutional MMFs falling $4.1 billion while Retail MMFs moved higher by $9.9 billion. Total Government MMF assets, including Treasury funds, stood at $2.330 trillion (75.0% of all money funds), while Total Prime MMFs rose to $637.7 billion (20.5%). Tax Exempt MMFs totaled $139.6 billion, or 4.5%. ICI states, "Assets of retail money market funds increased by $9.86 billion to $1.22 trillion. Among retail funds, government money market fund assets increased by $5.09 billion to $702.52 billion, prime money market fund assets increased by $4.36 billion to $386.89 billion, and tax-exempt fund assets increased by $404 million to $129.64 billion." Retail assets account for 39.2% of all assets, and Government Retail assets make up 57.6% of all Retail MMFs. The release adds, "Assets of institutional money market funds decreased by $4.07 billion to $1.89 trillion. Among institutional funds, government money market fund assets decreased by $8.62 billion to $1.63 trillion, prime money market fund assets increased by $4.06 billion to $250.81 billion, and tax-exempt fund assets increased by $487 million to $9.98 billion." Institutional assets accounted for 60.8% of all MMF assets, with Government Institutional assets making up 86.2% of all Institutional MMF totals.

Bloomberg published the article, "Turkey Limits Money-Market Funds as Savers Hunt for Yield" last month, but we hadn't noticed until recently. The piece tells us, "Turkish authorities imposed a limit on how much cash money-market funds can hold after savers flocked to the higher-yielding instruments to protect themselves against rampant inflation, draining bank deposits. Money-market funds need to invest at least half of their holdings in deposit accounts at the nation's commercial lenders, compared with a maximum 10 percent previously, according to a Capital Markets Board ruling on Tuesday night. Since the beginning of the year, the size of money-market funds more than doubled to 28.5 billion liras ($5.2 billion), according to data from Istanbul Clearing, Settlement and Custody Bank Inc., or Takasbank." Bloomberg adds, "The rush to money markets comes as the government leans on lenders to lower interest charges, driving deposit rates to levels that barely compensate savers for inflation running at 20 percent. That forced them out of traditional bank deposits and fueled a rush for dollars. Money-market funds yield around 21 percent, according to Turkey Electronic Fund Trading Platform, compared with an average 19 percent on one-month deposits."

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics and summary Tuesday, which tracks a shifting subset of our monthly Portfolio Holdings collection. The latest cut, with data as of Friday, March 29, includes Holdings information from 78 money funds (up from 75), representing $1.239 trillion, compared to $1.252 trillion on March 22. That represents 38.4% of the $3.225 trillion in total money fund assets tracked by Crane Data. (For our latest monthly Money Fund Portfolio Holdings numbers, see our March 12 News, "March Money Fund Portfolio Holdings: Treasuries Rebound; CP, CDs Up.") Our latest Weekly MFPH Composition summary shows Government assets again dominated the holdings list with Repurchase Agreements (Repo) totaling $443.8 billion (declining from $456.0 billion on March 22), or 35.8% of holdings, Treasury debt totaling $442.9 billion (up from $386.3 billion), or 35.7%, and Government Agency securities totaling $212.8 billion (down from $229.8 billion), or 17.2%. Commercial Paper (CP) totaled $56.5 billion (down from $66.9 billion), or 4.6%, and Certificates of Deposit (CDs) totaled $49.6 billion (down from $53.4 billion), or 4.0%. A total of $16.1 billion, or 1.3%, was listed in the Other category (primarily Time Deposits) and VRDNs accounted for $17.4 billion, or 1.4%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $442.9 billion (35.7% of total holdings), Federal Home Loan Bank with $151.9B (12.3%), RBC with $52.9B (4.3%), BNP Paribas with $51.6B (4.2%), Federal Farm Credit Bank with $45.0B (3.6%), Fixed Income Clearing Co. with $39.6B (3.2%), JP Morgan with $32.4B (2.6%), HSBC with $24.3B (2.0%), Mitsubishi UFJ Financial Group Inc with $22.5B (1.8%), and Wells Fargo with $19.1B (1.5%). The Ten Largest Funds tracked in our latest Weekly Holdings update include: Fidelity Inv MM: Govt Port ($110.9 billion), Goldman Sachs FS Govt ($102.3B), BlackRock Lq FedFund ($89.2B), Wells Fargo Govt MMkt ($72.9B), BlackRock Lq T-Fund ($64.5B), Goldman Sachs FS Trs Instruments ($60.5B), Fidelity Inv MM: MMkt Port ($55.6B), Morgan Stanley Inst Liq Govt ($54.6B), Dreyfus Govt Cash Mgmt ($53.0B) and State Street Inst US Govt ($42.4B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)

A press release entitled, "StoneCastle Hires Senior Schwab Executive to Further Capitalize on Rapid Growth of Insured Cash Business through Large Brokerages and RIAs tells us, "StoneCastle Cash Management, LLC ... announced today the hiring of Eric J. Edstrom as Managing Director, which became effective on March 25, 2019. Mr. Edstrom has amassed more than 20 years of expertise in bank products, FDIC insured sweep accounts, and cash management strategies through his various successes at well-respected financial firms. He will focus his efforts in advancing growth in StoneCastle's brokerage and RIA client segments." It reads, "Mr. Edstrom joins StoneCastle from Charles Schwab where he was Managing Director, Deposits and Payments. He was instrumental in the success of its High Yield Investor Checking, Investor Savings, and Schwab One platform for its bank and brokerage segments. Prior to joining Schwab, Eric was Head of Affluent Client Product and Strategy with SunTrust Bank, where he implemented their multi-billion dollar bank sweep program for the SunTrust brokerage platform. Earlier in his career Eric was Head of Liquidity Management with Janney Montgomery Scott, where he managed all money market, bank sweep, and banking services." Dan Farrell, CEO of StoneCastle Cash Management says, "We are very excited to have Eric as part of our growing team.... He is one of the most respected and well-known individuals in the cash management space and has a track record of success that will benefit our brokerage and RIA clients while securing new opportunities for StoneCastle's growth." Edstrom comments, "The industry has a responsibility to offer thoughtful leading edge products that solve client/investor needs in all market environments.... And when it comes to cash, StoneCastle is the only firm that has figured out how to decommoditize cash while simultaneously helping advisors better serve clients and grow their assets under management. I am thrilled to be a part of an organization that embodies this focus." Last month, StoneCastle hired Lisa Weisbrod, a 19-year veteran from Thomson Reuters BETA, now Refinitiv. She specialized in money markets and insured cash offerings for Refinitiv clients.

Kiplinger's Retirement Report says, "Retirees, Avoid Sweep Accounts With Low Yields," in a new article. Author Eleanor Laise writes, "Many major brokerage firms in recent years have eliminated higher-yielding money-market funds as a sweep option, pushing customers into lower-yielding bank sweep accounts. Often, the cash is routed to banks affiliated with the brokerage firm, plumping up the firm's profits. Brokerage firm Edward Jones eliminated its money-fund sweep option for new brokerage customers in February. Merrill Lynch removed money-fund sweep options for most new accounts last September, and most existing money-fund balances have been moved to deposit accounts at Bank of America, Merrill's parent-company bank. Charles Schwab eliminated money-market funds as a brokerage sweep option for most new accounts in 2016. Such moves can seriously crimp customers' yields. The 100 largest taxable money funds yield 2.25% on average, according to Crane Data, while the average brokerage sweep account now yields just 0.25% for balances up to $100,000. Schwab's sweep options currently yield 0.33% for balances below $1 million, while the yield on Merrill's bank sweep ranges from 0.14% to 0.75%, depending on the level of account assets." The Kiplinger's piece adds, "Brokerage firms are trying to squeeze more profits out of customers' cash as their earnings from trading commissions have taken a hit. An industry price war has driven commissions down to just a few dollars -- or even zero, in some cases. By flocking to brokerage firms offering low-cost trades, `consumers 'have voted with their dollars, and they want $4.95 trades instead of reasonable-paying cash,' says Peter Crane, president of Crane Data, which tracks money funds and other cash vehicles. 'It's like consumers in effect want fees they can't see.'"