Daily Links Archives: January, 2025
Reuters on Global Money Fund Inflows
Reuters writes, "Global money market funds draw huge inflows on caution over potential tariffs." They explain, "Investors piled into global money market funds in the week through Jan. 8, spurred by concerns over potential tariff increases with the upcoming change in the U.S. administration and caution ahead of a critical jobs report that could reshape expectations for Federal Reserve rate cuts <b:>`_. According to LSEG Lipper data, investors channeled $158.73 billion into global money market funds, their second largest weekly net purchase since April 2020." They add, "Global bond funds also saw significant activity, receiving $19.5 billion, the second inflow in the past four weeks. Government bond funds alone attracted $1.94 billion, their second influx in six weeks, and loan participation funds gathered $2.24 billion."
ICI published its latest "Money Market Fund Assets" report Thursday, which shows money fund assets surging $66.1 billion in the first week of the New Year to a record $6.916 trillion, after jumping $42.1 billion in the last week of 2024. Money fund assets have risen in 17 of the last 23, and 28 of the last 38, weeks, increasing by $612.9 billion (or 9.7%) since the Fed cut on 9/18/24 and increasing by $939.0 billion (or 15.7%) since 4/24/24. MMF assets are up by $941 billion, or 15.8%, in the past 52 weeks (through 1/8/25), with Institutional MMFs up $516 billion, or 14.2% and Retail MMFs up $426 billion, or 18.3%. ICI's weekly release says, "Total money market fund assets increased by $66.08 billion to $6.92 trillion for the eight-day period ended Wednesday, January 8, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $47.45 billion and prime funds increased by $15.40 billion. Tax-exempt money market funds increased by $3.23 billion." ICI's stats show Institutional MMFs increasing $43.5 billion and Retail MMFs increasing $22.5 billion in the latest week. Total Government MMF assets, including Treasury funds, were $5.683 trillion (82.2% of all money funds), while Total Prime MMFs were $1.094 trillion (15.8%). Tax Exempt MMFs totaled $138.9 billion (2.0%). It explains, "Assets of retail money market funds increased by $22.53 billion to $2.76 trillion. Among retail funds, government money market fund assets increased by $10.94 billion to $1.76 trillion, prime money market fund assets increased by $8.82 billion to $873.48 billion, and tax-exempt fund assets increased by $2.77 billion to $127.28 billion." Retail assets account for over a third of total assets, or 39.9%, and Government Retail assets make up 63.7% of all Retail MMFs. They add, "Assets of institutional money market funds increased by $43.54 billion to $4.16 trillion. Among institutional funds, government money market fund assets increased by $36.51 billion to $3.93 trillion, prime money market fund assets increased by $6.57 billion to $220.59 billion, and tax-exempt fund assets increased by $461 million to $11.67 billion." Institutional assets accounted for 60.1% of all MMF assets, with Government Institutional assets making up 94.4% of all institutional MMF totals. According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $60.8 billion in January through 1/8/25 to $7.235 trillion. (They hit a record high on 1/7 at $7.266 trillion before inching lower on Wednesday.) Assets rose by $110.9 billion in December, $200.5 trillion in November, $97.5 billion in October, $149.8 billion in September, $109.7 billion in August, $16.6 billion in July, $15.7 billion in June and $91.4 billion in May. They declined by $15.8 billion in April and $68.8 billion in March. They rose $72.1 billion in February and $93.9 billion last January. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're about $340 billion lower than Crane's asset series.
Fitch Gives AAA to State Street MMFs
A press release titled, "Fitch Assigns 'AAAmmf' Ratings to Three State Street Money Market Funds" tells us, "Fitch Ratings has assigned 'AAAmmf' ratings to the State Street Federal Treasury Money Market Fund Advantage Class, State Street Federal Treasury Plus Money Market Fund Advantage Class and State Street Federal Government Money Market Fund Advantage Class. The funds are each part of a master-feeder structure in which they invest substantially all of their investable assets in corresponding master portfolios. The respective master portfolios are the State Street Treasury Money Market Portfolio, State Street Treasury Plus Money Market Portfolio and State Street U.S. Government Money Market Portfolio, each rated 'AAAmmf' by Fitch." It explains, "The funds are government and treasury money market funds, seek to maintain stable prices of $1.00 per share and are expected to comply with Rule 2a-7. SSGA Funds Management, Inc. acts as the investment adviser for these funds. The funds are expected to launch on Jan. 6, 2025. Fitch reviewed the funds' prospectus and investment guidelines and master portfolios' holdings as of October 2024 to complete its rating analysis." Fitch adds, "The 'AAAmmf' ratings reflect Fitch's review of the funds' investment guidelines, credit quality and diversification, duration guidelines, and liquidity profile, as well as the capabilities of SSGA Funds Management, Inc. to manage the assets of the funds. The 'AAAmmf' ratings assigned to the funds indicate an extremely strong capacity to achieve the investment objectives of preserving principal and providing liquidity through limiting credit, market and liquidity risk.... The funds seek to invest exclusively in a diversified portfolio of U.S. Treasury and government money market instruments, and may also hold cash. The State Street Federal Treasury Plus Money Market Fund and State Street Federal Government Money Market Fund both expect to utilize repurchase agreements.... The funds are managed by SSGA Funds Management, Inc., a wholly owned subsidiary of State Street Global Advisors, Inc., which itself is a wholly-owned subsidiary of State Street Corporation."
Weekly Money Fund Portfolio Holdings
Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of Jan. 3) includes Holdings information from 61 money funds (down 12 from a week ago), or $3.651 trillion (down from $4.020 trillion) of the $7.248 trillion in total money fund assets (or 50.4%) tracked by Crane Data. (Note: Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our Dec. 11 News, "Dec. Money Fund Portfolio Holdings: Treasuries Jump Again, Repo Dips.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.829 trillion (down from $1.976 trillion a week ago), or 50.1%; Repurchase Agreements (Repo) totaling $1.224 trillion (down from $1.326 trillion a week ago), or 33.5%, and Government Agency securities totaling $309.9 billion (down from $353.1 billion), or 8.5%. Commercial Paper (CP) totaled $112.9 billion (down from a week ago at $144.8 billion), or 3.1%. Certificates of Deposit (CDs) totaled $63.7 billion (down from $80.5 billion a week ago), or 1.7%. The Other category accounted for $75.3 billion or 2.1%, while VRDNs accounted for $36.1 billion, or 1.0%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.829 trillion (50.1% of total holdings), Fixed Income Clearing Corp with $395.2B (10.8%), the Federal Home Loan Bank with $200.3 billion (5.5%), JP Morgan with $83.5B (2.3%), RBC with $83.0B (2.3%), Federal Farm Credit Bank with $74.6B (2.0%), BNP Paribas with $71.9B (2.0%), Citi with $68.0B (1.9%), Goldman Sachs with $63.9B (1.7%) and The Federal Reserve Bank of New York with $57.2B (1.6%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($304.5B), Goldman Sachs FS Govt ($280.3B), JPMorgan 100% US Treas MMkt ($240.0B), Fidelity Inv MM: Govt Port ($221.1B), Morgan Stanley Inst Liq Govt ($185.4B), State Street Inst US Govt ($171.0B), BlackRock Lq FedFund ($170.9B), BlackRock Lq Treas Tr ($156.6B), Fidelity Inv MM: MM Port ($144.7B) and Allspring Govt MM ($132.2B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
Bond Fund Symposium Heads to Calif.
Crane Data is ramping up preparations for our eighth annual ultra-short bond fund event, Bond Fund Symposium, which will take place March 27-28, 2025 at the Hyatt Regency in Newport Beach, Calif. 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 ($1,000) and speaking and sponsorship opportunities are available. See the latest agenda here and details below. Portfolio managers, analysts, investors, issuers, service providers, and anyone interested in expanding their knowledge of bond funds and fixed-income investing will benefit from our comprehensive program. A block of rooms has been reserved at the Hyatt Regency. We'd like to thank our past sponsors and exhibitors -- Wells Fargo Securities, Fitch Ratings, Fidelity Investments, J.P. Morgan Asset Management, Allspring Global, S&P Global Ratings, StoneX, Invesco, BofA Securities, Northern Trust, Bloomberg Intelligence, Goldman Sachs, Federated, Payden & Rygel, PIMCO and Dechert -- for their support. (We'd also love to get some new ones!) E-mail us for more details. We're also starting to make plans for our next big show, Money Fund Symposium, which will be held June 23-25, 2025, at The Renaissance Boston Seaport in Boston. (Let us know if you'd like details.) Finally, mark your calendars for next year's European Money Fund Symposium, which will be held Sept. 25-26, 2025 in Dublin, Ireland and for next year's Money Fund University, which will be held Dec. 18-19, 2025 in Pittsburgh, Pa. Watch for details on these shows in coming weeks and months.
MSN: Should I Park Cash in a MMF?
MSN asks, "Recent US election results have me concerned for the economy - should I park my cash in a money market fund over the next 4 years?" The piece says, "In September, the Federal Reserve began its rate-cutting cycle. However, that hasn't discouraged investors from pouring money into U.S. money-market funds. According to Bloomberg, the assets under management in these mutual funds crossed a record $7 trillion in November. So they're clearly still pretty popular despite the fact that they will deliver lower returns as interest rates are cut." They write, "If you're feeling skittish about the economy in the wake of the recent election, you may gain some financial security by putting your cash into a money market fund. But you should know that there are some drawbacks to consider, too.... It may seem curious that investors are flocking to MMFs at this time. One possible reason is that they aren't expecting interest rates to come down significantly in the near future. 'Few people seriously expect a return to ZIRP (zero interest rate policy). Indeed, since the Fed started easing in September, markets have begun pricing in fewer cuts and the implied terminal rate has risen by around a full percentage point, and MMF inflows have accelerated. While there are myriad alternatives to MMFs, all come with downsides,' explained Jamie McGeever of Reuters in November."
BankRate: Yields Will Outpace Inflation
BankRate writes, "Savings and money market account rates forecast for 2025: Yields will dip but remain higher than inflation." The article says, "Expect savings and money market account yields to slide lower this year, but they still should outpace inflation, according to the latest forecast from Bankrate chief financial analyst Greg McBride. McBride believes savings and money market yields will be 3.8 percent annual percentage yield (APY) for top-yielding nationally available accounts at the end of 2025; that's 1.25 percentage points (or 125 basis points) lower than the highest yield at the end of 2024. Meanwhile, the national average yield is projected by the end of 2025 to be 0.35 percent APY for savings accounts and 0.4 percent APY for money market accounts." It states, "McBride expects three, 25 basis-point rate cuts from the Federal Reserve in 2025. The Fed, however, is currently projecting two cuts for the year. But, according to McBride, if inflation stays lower as expected, it will be another banner year for savers. 'Any periods where yields were outpacing inflation tend to be pretty short-lived,' McBride says." The piece adds, "[I]n 2024, there weren't any rate increases, but savers benefited from the 550 basis points of rate increases from previous years and lower inflation that stayed relatively stable. Since March 2023, the top savings yield has been outpacing inflation. This is very different from June 2022, when inflation was at 9.1 percent and the top savings yield was only around 1.61 percent APY at that time."
Weekly Money Fund Portfolio Holdings
Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of Dec. 27) includes Holdings information from 73 money funds (up 13 from two weeks ago), or $4.020 trillion (up from $3.538 trillion) of the $7.151 trillion in total money fund assets (or 56.2%) tracked by Crane Data. (Note: We didn't publish Weekly Holdings last week due to the Christmas Holiday. Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our Dec. 11 News, "Dec. Money Fund Portfolio Holdings: Treasuries Jump Again, Repo Dips.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.976 trillion (up from $1.811 trillion two weeks ago), or 49.2%; Repurchase Agreements (Repo) totaling $1.326 trillion (up from $1.138 trillion two weeks ago), or 33.0%, and Government Agency securities totaling $353.1 billion (up from $308.0 billion), or 8.8%. Commercial Paper (CP) totaled $144.8 billion (up from two weeks ago at $115.3 billion), or 3.6%. Certificates of Deposit (CDs) totaled $80.5 billion (up from $62.3 billion two weeks ago), or 2.0%. The Other category accounted for $88.0 billion or 2.2%, while VRDNs accounted for $50.3 billion, or 1.3%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.976 trillion (49.2% of total holdings), Fixed Income Clearing Corp with $439.5B (10.9%), the Federal Home Loan Bank with $231.3 billion (5.8%), RBC with $90.3B (2.2%), JP Morgan with $84.9B (2.1%), Federal Farm Credit Bank with $84.3B (2.1%), The Federal Reserve Bank of New York with $75.0B (1.9%), Citi with $74.2B (1.8%), BNP Paribas with $73.3B (1.8%) and Goldman Sachs with $59.6B (1.5%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($307.2B), Goldman Sachs FS Govt ($267.4B), JPMorgan 100% US Treas MMkt ($235.8B), Fidelity Inv MM: Govt Port ($215.9B), Morgan Stanley Inst Liq Govt ($177.8B), BlackRock Lq FedFund ($175.2B), Federated Hermes Govt ObI ($166.1B), BlackRock Lq Treas Tr ($160.1B), State Street Inst US Govt ($159.6B) and Fidelity Inv MM: MM Port ($143.8B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
