Daily Links Archives: January, 2020

The New York Times recently published, "The Great Bond Party of 2019 Is Ending," which also discusses money market rates. They tell us, "After seeing cash rates rise throughout 2017 and 2018 -- the first signs of life since the financial crisis for savers seeking safe and liquid income -- rates slumped in 2019 in sync with the Fed's rate cuts. For example, in December 2018, the online Ally bank offered a certificate of deposit that guaranteed a 3.1 annual yield for five years, which was well above the rate of inflation. A five-year Ally C.D. bought in December paid a 2.15 percent yield. Mr. Tumin says high-yield savings accounts from online banks and credit unions offer the 'most bang for the buck' for savers today. While brick and mortar banks and credit union savings accounts pay less than 0.2 percent on average, there are plenty of online savings accounts with yields ranging from 1.7 percent to above 2 percent." The piece explains, "Despite that risk-free opportunity to bolster cash performance, Christopher Cordaro, chief investment officer of RegentAtlantic financial advisers, says he sees plenty of new clients who are 'earning next to nothing at their brick and mortar'.... Mr. Cordaro also says savers are probably leaving cash on the table in their brokerage accounts. 'Brokerage firms have gone to charging zero commission on trades, but they can afford to that by basically paying nothing on your sweep account,' said Mr. Cordaro, referring to the cash account where proceeds from trades are parked." The Times adds, "According to Crane Money Fund Intelligence, the average brokerage sweep account had a yield of 0.13 percent in December. Money-market mutual funds offered by those same brokerage firms -- but not the default option -- paid more than 1 percent." Cordaro is quoted, "'Free' makes people do silly things.... You would be better off paying $5 to trade and have a better sweep account." Finally, they write, "Fidelity and Vanguard continue to use money-market mutual funds, with higher yields than bank accounts, as the default for their investors."

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics and summary yesterday. Our Weekly Holdings track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of Jan. 17) includes Holdings information from 67 money funds (down 10 from two weeks ago), which represent $1.481 trillion (down from $1.834 trillion) of the $3.811 trillion (38.9%) in total money fund assets tracked by Crane Data. (See our Jan. 13 monthly Money Fund Portfolio Holdings update, "Jan MF Portfolio Holdings: Big FICC Repo, Agency Rebound; CDs, CP Drop." Note that our Weekly MFPH are e-mail only and aren't available on the website.) Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Treasury totaling $543.3 billion (down from $628.3 billion two weeks ago), or 36.7%, Repurchase Agreements (Repo) totaling $502.4 billion (down from $610.2 billion two weeks ago), or 33.9% and Government Agency securities totaling $256.9 billion (down from $347.9 billion), or 17.3%. Certificates of Deposit (CDs) totaled $60.2 billion (down from $90.9 billion), or 4.1%, and Commercial Paper (CP) totaled $57.8 billion (down from $79.5 billion), or 3.9%. A total of $34.4 billion or 2.3%, was listed in the Other category (primarily Time Deposits), and VRDNs accounted for $25.8 billion, or 1.7%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $543.3 billion (36.7% of total holdings), Federal Home Loan Bank with $188.0B (12.7%), Fixed Income Clearing Co with $99.4B (6.7%), BNP Paribas with $47.4 billion (3.2%), Federal Farm Credit Bank with $46.0B (3.1%), RBC with $36.6B (2.5%), JP Morgan with $26.5B (1.8%), Wells Fargo with $24.9B (1.7%), Credit Agricole with $21.7B (1.5%) and Mitsubishi UFJ Financial Group Inc with $21.5B (1.5%). The Ten Largest Funds tracked in our latest Weekly include: JP Morgan US Govt ($154.7B), Goldman Sachs FS Govt ($133.2B), BlackRock Lq FedFund ($120.6B), Wells Fargo Govt MM ($87.3B), BlackRock Lq T-Fund ($83.1B), JP Morgan 100% US Treas MMkt ($75.0B), Goldman Sachs FS Treas Intruments ($69.1B), Morgan Stanley Inst Liq Govt ($66.5B), JP Morgan Prime MMkt ($63.7B) and State Street Inst US Govt ($56.9B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary, or our Bond Fund Portfolio Holdings data series.)

During the latest round of asset management and brokerage earnings news, there's been little mention of money market funds and sweeps to date. The press release, "Schwab Reports 4Q Earnings Per Share of $.62 and a Record $2.67 for 2019" shows assets in Schwab's money market funds averaged $196.1 billion, up 7% from Q3'19 and up 31% from Q4'18. Bank deposits also grew in the final quarter of 2019, totaling $220.1 billion, up 5% from both the previous quarter and Q4'18. CFO Peter Crawford comments, "Net interest revenue increased 12% from the prior year to $6.5 billion, driven by higher average investment yields - even after the Fed's rate cuts – and an increase in client cash balances held at our bank and brokerage subsidiaries. While trading revenue declined 19% to $617 million due to our pricing actions, asset management and administration fees of $3.2 billion remained essentially flat year-over-year. Rising balances in third-party mutual funds, along with growing enrollment in our advisory solutions, helped to largely offset declines in Mutual Fund OneSource and lower money market fund revenue due to sweep transfers to our balance sheet." BlackRock's Q4 earnings also came out last week. CFO Gary Shedlin says, "Full year flows of $429 billion were positive across active and indexed, all asset classes, client types and regions and reflected significant strength in fixed income and cash which accounted for approximately 85% of organic growth.... BlackRock cash management platforms continue to increase share by leveraging scale for clients and delivering innovative digital distribution and risk management solutions. In 2019, we saw $93 billion of cash management net inflows across the platform including prime, sustainable, government and muni funds. Our innovative Liquid Environmentally Aware Fund or LEAF continues to see strong momentum with $1 billion of net inflows since launch earlier this year." CEO Larry Fink adds, "We generated $93 billion in cash strategies.... Other concerns about a slowdown in global growth all impacted investor sentiment, driving industry flows into safer fixed income and cash strategies, cash assets throughout the year." See also, J.P. Morgan, State Street and Morgan Stanley's earnings releases (though they don't mention MMFs).

PIMCO's Jerome Schneider was interviewed earlier this week on CNBC's "Santelli Exchange." On the topic of sponsored repo, he said, "Ultimately we have to look at the liquidity in the market. We saw it atrophy back in September. Now they've adjusted the symptoms of the market, which is really additional liquidity, they've added $350 billion of additional liquidity.... But ultimately, you have to look at that liquidity can be transient, and this is a factor that ultimately investors are going to have to focus on over the next year. It can be good, and then it can go away.... Undoubtedly, the structure of the market has to be addressed and the Fed is trying to do this. It's ultimately going to be in the form of a regulation that will happen over the course of the next few years. But more importantly, as you look at what the market is doing today, the Fed's purchases of T-Bills is really going against the saver. It's pushing down yields as they purchase $60 billions of T-Bills every month.... As a result, we have to really think about what that does to savers, in terms of lowering their rates. Obviously funding costs are lower, that helps to create a credit appetite and a risk appetite. Ultimately, the big picture is, optimism prevails in this market place and uncertainty is everywhere. So, while we simply have this optimism in the market, because risk assets are continuing to grow, we have to be a little cautious in terms of the risk taking that we're doing because of the changing liquidity conditions and frankly where we are in the growth cycle.... Coming back to full circle, you have to think about what that means for investors. It's a high conviction market and the only reason you're going to take risk is that you believe in that conviction, otherwise it might just be a time to earn a little bit of carry and be more defensive with a diversified portfolio. And that's exactly how we’re thinking about it."

Bloomberg tells us,"Fidelity's $1 trillion ‘bond queen' is retiring." They explain, "Fidelity Investments' top fixed-income executive with oversight of more than $1 trillion of assets is exiting the firm after six years in the role. Nancy Prior, 52, will depart later this year and the firm will name a successor, Fidelity said, calling her exit a retirement. Ms. Prior has been with Fidelity for 18 years and was promoted to oversee the fixed-income division in 2014.... Assets under management at Ms. Prior's group, which includes bond and money market funds, have grown from $714 billion under her leadership. Ms. Prior, who joined Boston-based Fidelity from the Mintz Levin law firm, was managing director of credit research before taking over the money markets group in 2011." Fidelity says in a Q&A, "Prior to assuming the role of president, Fixed Income, Nancy began leading Fidelity's Money Market group in 2011, and expanded her responsibilities in 2013 to oversee Short-Duration Bonds. Before heading Money Markets, she was managing director of Credit Research from 2009 to 2011, where she was responsible for leading a global team of research associates in the financials and structured products sectors. From 2002 to 2009, Nancy held several positions within the Fixed Income legal team, including senior vice president and deputy general counsel." Fidelity says in a separate earlier statement, "After nearly 30 years with Fidelity, Timothy Huyck, Chief Investment Officer, Money Markets, has expressed his desire to retire on December 31, 2019. Fidelity money market portfolio manager, Kevin Gaffney, will become CIO of Money Markets on October 1, 2019. In this role, Kevin will work with the money market investment team to determine investment strategy and risk management practices for Fidelity's money market mutual funds. Tim will work closely with Kevin and remain with the firm until year-end to ensure a smooth transition. We thank Tim for his many contributions and for serving as a proud steward for our clients and fund shareholders. We expect to name a successor for Kevin's portfolio management role in the coming weeks."

Website AdvisorHub recently posted the story, "Finra to Probe Effect of Waning Commissions on Firm Practices," which quotes from a letter on Finra's "2020 Risk Monitoring and Examination Priorities"," which says, "As commission practices change, cash management services that sweep investor cash into firms’ affiliated or partner banks or money market funds (Bank Sweep Programs) have taken on a greater significance." The article explains, "The Financial Industry Regulatory Authority put member firms on notice this week that it will be tracking whether brokerage firms’ shift away from commission revenue is affecting sales and order-execution practices for customers. In addition to focusing on such perennial issues as variable annuity sales, private placements and elderly investor communications, Finra examiners in 2020 will prioritize how brokerage firms manage their compliance responsibilities as they rely increasingly on cash-sweep bank programs and incentives from third-party trade execution firms as revenue sources." AdvisorHub also tells us, "In addition to making more bank loans to investment customers, firms ranging from traditional discount brokers to wirehouses across the retail brokerage industry have bulked their net interest revenue and spreads by moving brokerage account cash into bank accounts rather than into higher-paying money-market accounts that were the traditional sweep destinations. Concerns have risen about how the programs comply with a range of Finra and Securities and Exchange Commission rules, including net capital and customer protection rules, the Finra letter said. The industry-financed regulator outlined nine factors it may review in considering whether money moved into affiliate or outside bank accounts complies with its rules and standards." The Finra letter asks, "Does your firm clearly communicate the alternative for cash management available to customers, the terms provided by the Bank Sweep program and any alternatives? Has your firm omitted or misrepresented material information about the amount of FDIC insurance coverage on deposits, the nature and structure of the accounts, the relations of the brokerage accounts to partner banks, the amount of time it takes for funds to reach bank accounts and the risks of participating in such programs?"

Rates on money market funds fell in the latest week while brokerage sweep accounts remained flat. Our Money Fund Intelligence Daily shows that the flagship Crane 100 MF Index fell by two basis points to 1.44% in the 7 days through Friday, Jan. 10. The Crane 100 is down from 1.81% on Sept. 30 and down from 2.18% on June 30. The Crane 100 is down 77 bps from the beginning of 2019 (2.23%), but still up substantially from its near low of 0.06% ten years ago (12/31/09). The Crane Brokerage Sweep Index, which is currently 0.14%, is up 9 bps from ten years ago (0.05%) and down 14 bps from the end of 2018 (0.28%). Our latest Brokerage Sweep Intelligence, with data as of Friday, Jan. 10, shows every major brokerage keeping rates steady in the past week. Our broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data, shows a 7-day yield of 1.32%, down 2 bps in the week through Friday, Jan. 10. Treasury Inst MFs were down by 1 bps to 1.33%. Government Inst MMFs and Prime Inst MMFs were down 2 bps, finishing the week at 1.39% and 1.54%, respectively. Treasury Retail MFs currently yield 1.06%, (down 0.02%), Government Retail MFs yield 1.08% (down 1 bps) and Prime Retail MFs yield 1.38% (down 0.02%). Tax-exempt MF 7-day yields plummeted 0.34% to 0.69%, after jumping 20 bps two weeks ago. Crane's Brokerage Sweep Index remained flat at 0.14% in the week ended January 10 (for balances of $100K). No firms changed rates. E*Trade and TD Ameritrade currently have the lowest rate for balances at the $100K level (0.01%). Meanwhile, Fidelity continues to have the highest sweep rate (0.82%). (Fidelity also have a higher-yielding money fund option for new accounts.) Morgan Stanley is paying 0.03%. UBS, Merrill and Wells Fargo are all paying 0.05%, and Schwab is paying 0.06%. Raymond James and Ameriprise are paying 0.08%. RW Baird is paying 0.33% for balances of $100K.

Investment News recently interviewed Mohamed El-Erian, former Chief Executive of PIMCO and current Chief Economic Advisor at Allianz, in the piece, "How Long Can the Good Times Last?" While mainly on the economy and bond issues, the article also says, "You were recently quoted saying you are building up reserves in your personal portfolio. Does that suggest you're feeling risk-averse?" El-Erian answers, "Like many other investors, I have benefited from a very unusual trifecta, which is, one, significant returns; two, correlations that have broken down in favor of investors, in the sense that both risk assets and risk-free assets have gone up in price; and three, extremely low volatility." He continues, "Having said that, the longer this trifecta continues, the greater the risk of a change. So what I have done is very slowly and gradually reduced my exposure to public markets, both equities and fixed income, and allocated that reduction to two alternatives. One is cash, which provides two things in this environment: risk mitigation and the optionality to pick up good companies at depressed prices should we have a liquidity event. Then, with a smaller portion of the reduction in exposure to public markets, which has been very gradual and slow, I've looked for two types of opportunities. One is distressed situations where the sell-off far exceeds the worsening fundamentals, and the second is what I call market failures. What it looks like from the outside world is a gradual move to a more barreled approach. The middle of the curve is slowly coming down. One side is true risk-free asset, which is cash, and that's going up. The other side is the less liquid, more opportunistic exposure, and that's slowly going up."

Wells Fargo Money Market Funds' new monthly "Overview, strategy and outlook publication features a piece on "The year in review." Authors Jeff Weaver and team comment, "While most of the year we focused on the Federal Reserve (Fed), we took three opportunities to engage in a more in-depth discussion on specific topics affecting the money markets. In February, we examined the state of the credit environment, examining both relevant asset classes as well as regional differences. In May, we discussed what was on the horizon for the United Kingdom after it missed its Brexit deadline and Prime Minister Theresa May resigned. And finally, as talk of an impending recession ramped up, in August we focused on the typical expected behavior of money market funds in a recessionary environment. But the Fed and its actions dominated our monthly commentaries this year, and for buy-siders it was not for reasons we particularly liked. After nine tightening moves, beginning with lifting the target federal funds rate off its zero bound in December 2015, the Fed signaled at its December 2018 meeting that it might be pausing.... Then, in June it became clear that the Fed had lost all patience and completed a dovish pivot." Wells' update explains what's, "On the horizon," "'Auld Lang Syne' is traditionally associated with the end of one year and the beginning of the next and can be interpreted to mean 'for the sake of old times.' ... But along with the year in review, it's also a good time to review the past decade, as befits a year ending in "9." In that context, for the money market fund industry as a whole, the story of the year was 'growth.' [M]oney market funds achieved their fastest growth in the past 10 years -- growing by 18.6% this year. This is remarkable in that for much of the past decade, funds have experienced growth that can be charitably characterized as anemic, at around 1% or less -- when it wasn't negative -- and only in the previous two years had growth exceeded 4%.... So where do we go from here? Optimistically, up! The trend seems to favor continued growth, as do economic conditions and market volatility. Additionally, we are entering a cyclical time of year in which funds traditionally gather assets in advance of tax payments coming due in April. Beyond that, the crystal ball is a little cloudy, but if the next year is anything like the past three, we could see continued asset growth in our industry."

A press tells us that, "Fitch Ratings has assigned Royal London Asset Management Bond Funds plc - Royal London Sterling Liquidity Money Market Fund a 'AAAmmf' rating." It explains, "The 'AAAmmf' rating is driven by the fund's high credit quality and diversification, low exposure to interest-rate and spread risk, and high levels of daily and weekly liquid assets. The rating also reflects the adequate capabilities and resources of Royal London Asset Management Limited (RLAM) as investment manager.... The fund seeks to maintain a high credit quality by investing only in high-quality securities and money-market instruments and deposits with credit institutions. At end-October 2019, all the portfolio assets were rated at least 'F1' or its equivalent by other rating agencies. Moreover, 60% of the fund's assets are rated 'F1+' or its equivalent by other rating agencies. The fund has a high direct exposure to the UK government." Fitch adds, "The fund has low exposure to interest-rate movements with a weighted average maturity at 45 days as of end-October 2019, compared with a maximum level of 60 days at the 'AAAmmf' rating level.... The fund seeks to maintain in its portfolio at least 10% of daily maturing assets and 30% of weekly maturing assets. As at end-October 2019, the fund had 27% of its assets invested in overnight deposits and 32% of its assets invested in UK gilts with a residual maturity below 397 days, resulting in very high levels of overnight and weekly liquidity." Finally, the release adds, "The fund is a sub-fund of Royal London Asset Management Bond Funds plc, an Ireland-domiciled investment company with variable capital, registered and authorised by the Central Bank of Ireland. The fund is classified as low volatility net asset value fund under the European money-market fund regulation. As of end-October 2019, the fund's total assets under management stood at GBP2.04 billion. RLAM was established in 1988 and is part of the Royal London Group, a mutual society. Royal London is the UK's largest mutual life and pensions company. RLAM managed a total of GBP129.5 billion assets as of end-June 2019, of which approximately 50% were in fixed income and 10% in cash products."

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics and summary Tuesday. Our Weekly Holdings track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of Jan. 3) includes Holdings information from 77 money funds (up 16 from a week ago), which represent $1.834 trillion (up from $1.515 trillion) of the $3.765 trillion (48.7%) in total money fund assets tracked by Crane Data. (See our latest monthly Money Fund Portfolio Holdings update here. Note that our Weekly MFPH are e-mail only and aren't available on the website.) Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Treasury totaling $628.3 billion (up from $496.0 billion a week ago), or 34.3%, Repurchase Agreements (Repo) totaling $610.2 billion (up from $498.8 billion a week ago), or 33.3% and Government Agency securities totaling $347.9 billion (up from $299.0 billion), or 19.0%. Certificates of Deposit (CDs) totaled $90.9 billion (up from $79.3 billion), or 5.0%, and Commercial Paper (CP) totaled $79.5 billion (up from $72.3 billion), or 4.3%. A total of $45.1 billion or 2.5%, was listed in the Other category (primarily Time Deposits), and VRDNs accounted for $32.0 billion, or 1.7%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $628.3 billion (34.3% of total holdings), Federal Home Loan Bank with $255.9B (14.0%), Fixed Income Clearing Co with $124.5B (6.8%), RBC with $61.2 billion (3.3%), Federal Farm Credit Bank with $53.3B (2.9%), BNP Paribas with $48.2B (2.6%), Mitsubishi UFJ Financial Group Inc with $34.7B (1.9%), JP Morgan with $31.4B (1.7%), Wells Fargo with $30.2B (1.6%) and Federal Home Loan Mortgage Co with $29.6B (1.6%). The Ten Largest Funds tracked in our latest Weekly include: JP Morgan US Govt ($156.5B), Goldman Sachs FS Govt ($136.8B), Fidelity Inv MM: Govt Port ($132.3B), BlackRock Lq FedFund ($120.8B), Wells Fargo Govt MM ($87.4B), BlackRock Lq T-Fund ($82.2B), JP Morgan 100% US Treas MMkt ($74.0B), Fidelity Inv MM: MM Port ($73.7B), Goldman Sachs FS Treas Instruments ($68.9B) and Morgan Stanley Inst Liq Govt ($67.7B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary, or our Bond Fund Portfolio Holdings data series.)

As we prepare for our upcoming Money Fund University "basic training" event in Providence, R.I., Jan. 23-24, we wanted the publication that gave us the idea for the event years ago, The Federal Reserve Bank of Richmond's "Instruments of the Money Market." The publication is one of the few overviews of the money markets available, and we took the core of this work's text as the core of our "course" on money markets at MFU. The work's website explains, "The following chapters were originally published in the seventh edition of Instruments of the Money Market, edited by Timothy Q. Cook and Robert K. Laroche. The information in this publication, although last revised in 1993 and no longer in print, is still frequently requested by academics, business leaders, and market analysts." As a reminder, with just over two weeks to go, we're gearing up for Crane's Money Fund University, which will be held January 23-24 at the Renaissance Providence Downtown Hotel. The 10th annual Money Fund University will cover the history of money funds, interest rates, regulations (Rule 2a-7), ratings, rankings, money market instruments such as commercial paper, CDs and repo, and portfolio construction and credit analysis. We also include segments on offshore money funds and ultra-short bond funds. Money Fund University's comprehensive program is good for both beginners and experienced professionals looking for a refresher. The agenda is available online and we are still accepting registrations. (We're also willing to "comp" tickets for large Crane Data or sponsor clients, so let us know if you're interested.) Make your hotel reservations soon! Crane Data is also making plans for its fourth annual ultra-short bond fund event, Bond Fund Symposium, which will take place March 23-24, 2020 at the Hyatt Regency in Boston. Crane's Bond Fund Symposium offers a concentrated and affordable educational experience, as well as an excellent networking venue, for bond fund and fixed-income professionals. Registrations are now being accepted ($750) and sponsorship opportunities are available. Mark your calendars for our big show, Crane's Money Fund Symposium, which will be held June 24-26, 2020, at the Hyatt Regency Minneapolis. We're now taking registrations and the preliminary agenda will soon be available at: www.moneyfundsymposium.com. Finally, we've also set the dates and location for our next European Money Fund Symposium. It is scheduled for Sept. 17-18, 2020, in Paris, France. Let us know if you'd like more details on any of our events, and we hope to see you in Providence, Boston, Minneapolis or Paris in 2020!

The Federal Reserve Bank of New York updated its list of "Reverse Repo Counterparties." The most recent additions and removals are: Capital Group Central Fund Series, Capital Group Central Cash Fund (added, effective 12/20/19); PNC Government Money Market Fund (removed, effective 11/18/19), Fidelity Hereford Street Trust: Fidelity Money Market Fund (added, effective 11/15/19). Under name changes the List of Reverse Counterparties writes, "Fidelity Investments Money Management, Inc. merged with and into Fidelity Management & Research Company. Fidelity Management & Research company changes its name to Fidelity management & Research Company LLC. Effective January 1, 2020." The NY Fed's "Revised List, Investment Manager Money Market Funds" now includes: AllianceBernstein: AB Fixed-Income Shares, Inc., AB Government Money Market Portfolio; BlackRock Liquidity Funds: FedFund, T-Fund, TempCash, TempFund, Master Treasury Strategies Institutional Portfolio, Master Premier Government Institutional Portfolio, Money Market Master Portfolio and Treasury Money Market Master Portfolio; BNY Mellon Investment Adviser: Dreyfus Cash Management, Dreyfus Government Cash Management, Dreyfus Institutional Preferred Government Money Market Fund, Dreyfus Treasury and Agency Liquidity Money Market Fund, Dreyfus Treasury Obligations Cash Management and General Money Market Fund; Capital Research and Management Company: American Funds U.S. Government Money Market Fund and Capital Group Central Fund Series, Capital Group Central Cash Fund; Charles Schwab Investment Management: Schwab Government Money Fund, Schwab Treasury Obligations Money Fund and Schwab Value Advantage Money Fund; Columbia Management Investment Advisers: Columbia Short-Term Cash Fund, a series of Columbia Funds Series Trust II; Deutsche Investment Management Americas: Government Cash Management Portfolio; Dimensional Fund Advisors LP: The DFA Short Term Investment Fund of The DFA Investment Trust Company; Federated Investment Management: Edward Jones Money Market Fund, Federated Capital Reserves Fund, Federated Government Obligations Fund, Federated Government Obligations Tax-Managed Fund, Federated Government Reserves Fund, Federated Institutional Money Market Management, Federated Prime Cash Obligations Fund, Federated Prime Obligations Fund, Federated Prime Value Obligations Fund, Federated Tax-Free Obligations Fund, Federated Treasury Obligations Fund and Federated U.S. Treasury Cash Reserves; Fidelity Management & Research Company: Fidelity Colchester Street Trust: Government Portfolio, Fidelity Colchester Street Trust: Money Market Portfolio, Fidelity Colchester Street Trust: Prime Money Market Portfolio, Fidelity Colchester Street Trust: Prime Reserves Portfolio, Fidelity Colchester Street Trust: Treasury Portfolio, Fidelity Hereford Street Trust: Fidelity Government Money Market Fund, Fidelity Hereford Street Trust: Fidelity Money Market Fund, Fidelity Newbury Street Trust: Fidelity Treasury Money Market Fund, Fidelity Phillips Street Trust: Fidelity Government Cash Reserves, Fidelity Revere Street Trust: Fidelity Cash Central Fund, Fidelity Revere Street Trust: Fidelity Securities Lending Cash Central Fund and Fidelity Salem Street Trust: Fidelity Series Government Money Market Fund; Franklin Advisers: The Money Market Portfolio; Goldman Sachs Asset Management: Goldman Sachs Financial Square Government Fund, Goldman Sachs Financial Square Money Market Fund, Goldman Sachs Financial Square Prime Obligations Fund, Goldman Sachs Financial Square Treasury Obligations Fund, Goldman Sachs Financial Square Treasury Solutions Fund and Goldman Sachs Investor Tax-Exempt Money Market Fund; HSBC Global Asset Management (USA): HSBC U.S. Government Money Market Fund; Invesco Advisers: Premier Portfolio, a series of the AIM Treasurer's Series Trust (Invesco Treasurer's Series Trust), STIT Government and Agency Portfolio, STIT Liquid Assets Portfolio and STIT Treasury Portfolio; J.P. Morgan Investment Management: JPMorgan Liquid Assets Money Market Fund, JPMorgan Prime Money Market Fund, JPMorgan Tax Free Money Market Fund, JPMorgan U.S. Government Money Market Fund and JPMorgan U.S. Treasury Plus Money Market Fund; Legg Mason Partners Fund Advisor: Western Asset/Government Portfolio and Western Asset/Liquid Reserves Portfolio; Morgan Stanley Investment Management: Morgan Stanley Institutional Liquidity Funds Government Portfolio, Morgan Stanley Institutional Liquidity Funds Government Securities Portfolio, Morgan Stanley Institutional Liquidity Funds Prime Portfolio and Morgan Stanley Institutional Liquidity Funds Treasury Portfolio; Northern Trust Investments: NTAM Treasury Assets Fund, Northern Funds - U.S. Government Money Market Fund, Northern, Institutional Funds - Government Portfolio, Northern Institutional Funds - Government Select Portfolio and Northern Institutional Funds - Treasury Portfolio; PFM Asset Management: PFM Funds Government Select Series; RBC Global Asset Management (U.S.): RBC Funds Trust, U.S. Government Money Market Fund; SSgA Funds Management: Institutional Liquid Reserve Portfolio, Institutional US Gov. Money Market Fund, a series of the State Street Master Funds, State Street Navigator Securities Lending Government Money Market Portfolio and State Street Treasury Plus Money Market Portfolio; T. Rowe Price Associates: T. Rowe Price Cash Reserves Fund, T. Rowe Price Government Money Fund, Inc., T. Rowe Price Government Reserve Fund and T. Rowe Price U.S. Treasury Money Fund; UBS Asset Management (Americas): Government Master Fund, Limited Purpose Cash Investment Fund, Prime Master Fund and Treasury Master Fund; U.S. Bancorp Asset Management: First American Government Obligations Fund and First American Treasury Obligations Fund; The Vanguard Group: Vanguard Federal Money Market Fund, Vanguard Market Liquidity Fund and Vanguard Prime Money Market Fund; Wells Fargo Funds Management: Wells Fargo Cash Investment Money Market Fund, Wells Fargo Government Money Market Fund, Wells Fargo Heritage Money Market Fund, Wells Fargo Money Market Fund and Wells Fargo Treasury Plus Money Market Fund and Wilmington Funds Management: Wilmington U.S. Government Money Market Fund. In other repo news, see also, The Wall Street Journal's "Fed Adds $56.72 Billion to Markets for Calm Start to 2020." The article tells us, "After navigating a quiet end to money-market trading in 2019—greased by a massive wave of central bank liquidity—the Federal Reserve Bank of New York injected a modest amount of money into financial markets on Thursday. In two separate operations, the New York Fed added $56.72 billion to financial markets via repurchase-agreement, or repo, operations.... The first day of trading for 2020 followed a calm end to last year."

Bankrate published, "Savings yields expected to stay relatively steady with Fed on the sidelines in 2020." It tells us, "It's been a roller-coaster ride for rates during the past few years. But after nearly three years of rate increases and then three rate cuts in the second half of 2019, rates are expected to resemble more of a lazy river in 2020. That's assuming one big thing -- that the Fed sticks with its plan to leave rates alone in 2020." Greg McBride, Bankrate's chief financial analyst, comments, "There's not going to be much catalyst for change ... as long as the Fed is on the sidelines. And the outlook is that they will remain there." The article continues, "At the start of 2020, competition will keep annual percentage yields (APYs) on savings accounts and money market accounts from falling further, McBride says." McBride adds, "The longer the economic expansion continues, the more likely it will actually lead to seeing some higher yields, even with the Fed standing on the sidelines.... Barring that, the continued economic expansion and a creeping higher of core inflation in the back half of the year will provide a little bit of a boost to savings yields late in 2020." Bankrate also writes, "Fed rate changes directly impact savings account and money market account rates. If the Fed's stance changes, the trajectory of savings rates will change too, McBride says.... Bankrate's national average for money market accounts started 2019 yielding at 0.22 percent APY on Jan. 2, peaked at 0.25 percent APY in late April (holding steady into June) before ending 2019 at 0.21 percent APY.... Money market account and savings account yields on the absolute top-yielding nationally available accounts are expected to be around 2.25 percent APY, McBride says."

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics and summary Tuesday. Our weekly holdings track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of Dec. 27) includes Holdings information from 61 money funds (down 30 from a week ago), which represent $1.515 trillion (down from $2.010 trillion) of the $3.765 trillion (40.2%) in total money fund assets tracked by Crane Data. (See our latest monthly Money Fund Portfolio Holdings update here. Note that our Weekly MFPH are e-mail only and aren't available on the website.) Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Repurchase Agreements (Repo) totaling $498.8 billion (down from $697.9 billion a week ago), or 32.9%, Treasury debt totaling $496.0 billion (down from $702.0 billion a week ago), or 32.7% and Government Agency securities totaling $299.0 billion (down from $382.8 billion), or 19.7%. Certificates of Deposit (CDs) totaled $79.3 billion (down from $108.7 billion), or 5.2%, and Commercial Paper (CP) totaled $72.3 billion (down from $104.9 billion), or 4.8%. A total of $40.6 billion or 2.7%, was listed in the Other category (primarily Time Deposits), and VRDNs accounted for $29.4 billion, or 1.9%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $496.0 billion (32.7% of total holdings), Federal Home Loan Bank with $215.1B (14.2%), Fixed Income Clearing Co with $106.0B (7.0%), RBC with $49.3 billion (3.3%), Federal Farm Credit Bank with $47.5B (3.1%), BNP Paribas with $37.2B (2.5%), Mitsubishi UFJ Financial Group Inc with $29.6B (2.0%), Federal Home Loan Mortgage Co with $28.6B (1.9%), JP Morgan with $25.0B (1.6%) and Natixis with $24.6B (1.6%). The Ten Largest Funds tracked in our latest Weekly include: JP Morgan US Govt ($169.2B), Fidelity Inv MM: Govt Port ($134.8B), BlackRock Lq FedFund ($117.8B), Wells Fargo Govt MM ($87.8B), BlackRock Lq T-Fund ($76.8B), JPMorgan 100% Treas MMkt ($75.1B), Fidelity Inv MM: MM Port ($73.6B), Morgan Stanley Inst Liq Govt ($66.4B), JPMorgan Prime MMkt ($61.8B) and State Street Inst US Govt ($58.7B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary, or our Bond Fund Portfolio Holdings data series.)