Daily Links Archives: March, 2025
Schwab Files for Govt Money Mkt ETF
It looks like we'll soon have a fourth "money market" ETF offering. A new Form N-1A Registration filing for the Schwab Government Money Market ETF (SGVT) tells us, "The fund intends to operate as a government money market fund under the regulations governing money market funds. The fund will invest at least 99.5% of its total assets in cash, U.S. government securities and/or repurchase agreements that are collateralized fully by cash and/or U.S. government securities; under normal circumstances, at least 80% of the fund's net assets (including, for this purpose, any borrowings for investment purposes) will be invested solely in U.S. government securities including repurchase agreements that are collateralized fully by U.S. government securities (excluding cash). With respect to the 80% policy, the fund will notify its shareholders at least 60 days before changing the policy." It explains, "Although the fund intends to operate as a 'government money market fund', it will not seek to maintain a stable net asset value ('NAV') per share nor will it use the amortized cost method of valuation. Instead, the fund will calculate its NAV per share based on the market value of its investments. In addition, unlike a traditional money market fund, the fund operates as an exchange traded fund ('ETF'). As an ETF, the fund's shares will be traded on the [NYSE Arca] exchange and will generally fluctuate in accordance with changes in NAV as well as the relative supply of, and demand for, shares on the [NYSE Arca]. You could lose money by investing in the fund. Because the share price and NAV of the fund will fluctuate, when shares are sold on the [NYSE Arca] (or redeemed, in the case of an Authorized Participant), they may be worth more or less than what was originally paid for them." Schwab adds, "The fund is an actively managed ETF fund and therefore does not seek to replicate the performance of any specific index." For more, see these Crane Data News articles: "BlackRock Money Market ETFs Go Live; Ondo Finance on Tokenized MMFs" (2/6/25), "VettaFi Discusses Money Market ETFs" (12/11/24), "Dec. MFI: Assets Break $7.0 Tril; Top 10 of 2024; BlackRock MM ETFs" (12/6/24), "BlackRock Debuts First Euro MM ETF" (12/5/24), "FT on BlackRock Money Market ETFs" (11/18/24), "November BFI: Bond Funds Hit by Election; ETF Trends MM Substitutes" (11/15/24), "BlackRock Files for Money Market ETFs" (11/12/24) and "Texas Capital Launches Govt MM ETF" (9/26/24).
ICI published its latest weekly "Money Market Fund Assets" report on Thursday. The weekly series shows money fund assets falling $1.4 billion to $7.024 trillion, after rising $51.2 billion the week prior. Money fund assets have risen in 22 of the last 32, and 33 of the last 47 weeks, increasing by $720.5 billion (or 11.4%) since the Fed cut on 9/18/24 and increasing by $1.047 trillion (or 17.5%) since 4/24/24. MMF assets are up by $916 billion, or 15.0%, in the past 52 weeks (through 3/12/25), with Institutional MMFs up $448 billion, or 12.0% and Retail MMFs up $468 billion, or 19.6%. Year-to-date, MMF assets are up by $174 billion, or 2.5%, with Institutional MMFs up $51 billion, or 1.2% and Retail MMFs up $123 billion, or 4.5%. ICI's weekly release says, "Total money market fund assets decreased by $1.38 billion to $7.02 trillion for the week ended Wednesday, March 12... Among taxable money market funds, government funds decreased by $775 million and prime funds increased by $733 million. Tax-exempt money market funds decreased by $1.34 billion.” ICI's stats show Institutional MMFs decreasing $19.1 billion and Retail MMFs increasing $17.8 billion in the latest week. Total Government MMF assets, including Treasury funds, were $5.765 trillion (82.1% of all money funds), while Total Prime MMFs were $1.128 trillion (16.1%). Tax Exempt MMFs totaled $130.6 billion (1.9%). ICI's release explains, "Assets of retail money market funds increased by $17.75 billion to $2.86 trillion. Among retail funds, government money market fund assets increased by $11.72 billion to $1.82 trillion, prime money market fund assets increased by $6.92 billion to $915.86 billion, and tax-exempt fund assets decreased by $892 million to $120.08 billion." Retail assets account for well over a third of total assets, or 40.7%, and Government Retail assets make up 63.8% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $19.13 billion to $4.17 trillion. Among institutional funds, government money market fund assets decreased by $12.50 billion to $3.94 trillion, prime money market fund assets decreased by $6.19 billion to $212.36 billion, and tax-exempt fund assets decreased by $444 million to $10.58 billion." `Institutional assets accounted for 59.3% of all MMF assets, with Government Institutional assets making up 94.6% of all institutional MMF totals. According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $31.9 billion in March through 3/12/25, hitting a record high $7.371 trillion the day prior (3/11). Assets rose by $94.2 billion in February, $52.8 billion in January, $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 2024. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $330 billion lower than Crane's asset series.
Global Treasurer on Tokenized MMFs
The Global Treasurer published, "Tokenized Money Market Funds and the Future of Short-Term Investing," which states, "Tokenized money market funds (MMFs) are attracting growing interest from institutional investors. By digitizing fund ownership on blockchain networks, these assets promise faster settlements, lower costs, and broader access. Yet, regulatory uncertainty—particularly in the United States—continues to slow adoption, leaving a significant portion of the market untapped." It continues, "The appeal of money market funds has always been their combination of stability and liquidity. Traditionally, these funds hold short-term government securities, corporate debt, and other highly rated fixed-income instruments. But the existing model has its flaws: settlement times stretch across multiple days, operational costs remain high, and access is often limited to large institutions. Tokenization reworks this framework by allowing investors to trade fund shares instantly, outside of traditional market hours, and in smaller denominations. The result is a financial product that functions more efficiently, with fewer intermediaries and greater accessibility." They add, "Some of the world's largest asset managers are already moving tokenized MMFs from concept to reality. Franklin Templeton has expanded its Franklin OnChain U.S. Government Money Fund (FOBXX) to multiple blockchain networks, including Stellar, Polygon, Ethereum, and Solana, pushing its assets beyond $580 million. Meanwhile, abrdn, through a partnership with Archax, has brought a tokenized MMF to Hedera, citing the blockchain's ability to process high transaction volumes quickly. BlackRock and Fidelity International have also entered the market via XDC Network and Archax, signaling a wider institutional shift toward tokenized investment products."
Hidden Road Launches Platform
A press release titled, "Hidden Road Launches Fixed Income Prime Brokerage Platform," tells us, "Hidden Road, the global credit network for institutions, ... announced the launch of its Fixed Income prime brokerage platform. The business will initially support Fixed Income Repo & Global Funding services following the firm's recent approval as a Fixed Income Clearing Corporation (FICC) clearing member. This represents the latest expansion of Hidden Road's product suite, which currently offers clients seamless, conflict-free access to clearing, prime brokerage and financing across a diverse range of asset classes." President Noel Kimmel comments, "Hidden Road's Fixed Income Repo & Global Funding platform marks a significant milestone in our mission to build the industry's most comprehensive suite of multi-asset prime brokerage and institutional financing solutions. With the ability to cross-margin and margin finance across cleared derivatives, FX prime brokerage, OTC swaps and digital assets, we are now able to offer a truly differentiated service to the institutional marketplace." The release says, "Hidden Road's Fixed Income and Funding business is led by Mike Santoro, an industry veteran who has led repo and funding operations at a number of leading global financial institutions, including BNP Paribas and Guggenheim Securities. The team, whose members average over two decades of experience in the Repo space, will be instrumental in building this key component of the firm's multi-asset prime brokerage, clearing and financing offering." Santoro adds, "We are excited to launch this business and become a member of FICC, a critical market infrastructure provider that brings stability and efficiency to the fixed income markets. Through this membership, we look forward to providing counterparties and eventually our clients with seamless execution and enhanced access to liquidity through our full-service, technology-enabled platform."
Money Fund Yields Inch Down to 4.15%
Money fund yields (7-day, annualized, simple, net) were one basis point lower to 4.15% on average during the week ended Friday, March 7 (as measured by our Crane 100 Money Fund Index), after being unchanged last week and falling 1 bp the week prior. Fund yields have digested all of the Federal Reserve's 25 basis point cut from December 18, but they may inch down another basis point or 2 lower in coming days. They've declined by 91 bps since the Fed first cut its Fed funds target rate by 50 bps percent on Sept. 18, and they've declined by 48 bps since the Fed cut rates by 1/4 point on 11/7. Yields were 4.16% on 2/28/25, 4.19% on 1/31/25, 4.28% on average on 12/31/24, 4.45% on 11/30/24, 4.65% on 10/31, 4.75% on 9/30, 5.10% on 8/31, 5.13% on 7/31 and 6/28, 5.14% on 3/31 and 5.20% on 12/31/23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 679), shows a 7-day yield of 4.05%, down one bps in the week through Friday. Prime Inst money fund yields were down 2 bps to 4.27% in the latest week. Government Inst MFs were down one bp to 4.16%. Treasury Inst MFs were down one bp to 4.10%. Treasury Retail MFs currently yield 3.86%, Government Retail MFs yield 3.86%, and Prime Retail MFs yield 4.05%, Tax-exempt MF 7-day yields were down 4 bps to 1.93%. Assets of money market funds rose by $29.7 billion last week to $7.351 trillion, according to Crane Data's Money Fund Intelligence Daily. For the month of February, MMF assets rose by $94.2 billion, after increasing by $52.8 billion in January, $110.9 billion in December, $200.5 billion in November, $97.5 billion in October and $149.8 billion in September. Weighted average maturities were down 1 day at 35 days for the Crane MFA and 1 day shorter at 36 days the Crane 100 Money Fund Index. According to Monday's Money Fund Intelligence Daily, with data as of Friday (3/7), 116 money funds (out of 791 total) yield under 3.0% with $140.2 billion in assets, or 1.9%; 213 funds yield between 3.00% and 3.99% ($846.8 billion, or 11.6%), 462 funds yield between 4.0% and 4.99% ($6.334 trillion, or 86.5%) and following the recent rate cut there continue to be zero funds yielding 5.0% or more. Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.41%. The latest Brokerage Sweep Intelligence, with data as of March 7, shows no changes over the past week. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
FT: Investors Push MMFs Over $7 Tril.
The Financial Times writes, "Investors push money market assets over $7tn as US equities wobble." The recap tells us, "Investors have poured into low-risk money market funds as they seek a refuge from recent tumult on Wall Street sparked by US President Donald Trump's tariffs, sending the industry's assets under management to $7tn. More than $51bn flowed into money market funds over the past week, pushing the total to a record $7.03tn as of Wednesday, according to the Investment Company Institute, a trade group.... The blue-chip S&P 500 dropped almost 2 per cent on Thursday and is poised to notch up its worst week since September. Investors looking for havens are finding an attractive alternative in money market funds, which offer consistent yields and high liquidity by investing primarily in relatively safe short-term government debt. Money market funds were benefiting from the recent struggles affecting equities and increasing uncertainty, which gave investors a 'good excuse to take some chips off the table', said Peter Tchir, head of macro strategy at Academy Securities." It quotes ICI's Shelly Antoniewicz, "Recent strong inflows may be a response to the spike in volatility in the financial markets we've seen lately. With short-term interest rates still at elevated levels historically, money market funds -- which pass earned interest on to their shareholders -- are relatively more attractive to both institutional and retail investors." Barron's also writes, "Money-Market Fund Assets Hit Record $7 Trillion as Investors Seek Safe Havens."
ICI: MMF Assets Break $7.0 Trillion
ICI published its latest weekly "Money Market Fund Assets" report on Thursday. The weekly series shows money fund assets rising $51.2 billion to a record $7.025 trillion, after rising $60.5 billion the week prior. Money fund assets have risen in 22 of the last 31, and 33 of the last 46 weeks, increasing by $721.8.7 billion (or 11.5%) since the Fed cut on 9/18/24 and increasing by $1.048 trillion (or 17.5%) since 4/24/24. MMF assets are up by $948 billion, or 15.6%, in the past 52 weeks (through 3/5/25), with Institutional MMFs up $491 billion, or 13.3% and Retail MMFs up $458 billion, or 19.2%. Year-to-date, MMF assets are up by $175 billion, or 2.6%, with Institutional MMFs up $70 billion, or 1.7% and Retail MMFs up $105 billion, or 3.8%. ICI's weekly release says, "Continued strong inflows into money market funds (MMFs) sent assets soaring by $51.15 billion to a record-breaking $7.03 trillion, the Investment Company Institute reported for the week ended Wednesday, March 5. Among taxable money market funds, government funds increased by $45.67 billion and prime funds increased by $8.30 billion. Tax-exempt money market funds decreased by $2.82 billion." ICI's stats show Institutional MMFs increasing $20.8 billion and Retail MMFs increasing $30.4 billion in the latest week. Total Government MMF assets, including Treasury funds, were $5.766 trillion (82.1% of all money funds), while Total Prime MMFs were $1.127 trillion (16.0%). Tax Exempt MMFs totaled $132.0 billion (1.9%). ICI Chief Economist Shelly Antoniewicz comments on the record-high, saying, "Recent strong inflows may be a response to the spike in volatility in the financial markets we've seen lately. With short-term interest rates still at elevated levels historically, money market funds -- which pass earned interest on to their shareholders -- are relatively more attractive to both institutional and retail investors." ICI's release explains, "Assets of retail money market funds increased by $30.35 billion to $2.84 trillion. Among retail funds, government money market fund assets increased by $22.62 billion to $1.81 trillion, prime money market fund assets increased by $9.96 billion to $908.94 billion, and tax-exempt fund assets decreased by $2.23 billion to $120.97 billion." Retail assets account for well over a third of total assets, or 40.4%, and Government Retail assets make up 63.7% of all Retail MMFs. They add, "Assets of institutional money market funds increased by $20.80 billion to $4.19 trillion. Among institutional funds, government money market fund assets increased by $23.06 billion to $3.96 trillion, prime money market fund assets decreased by $1.66 billion to $218.54 billion, and tax-exempt fund assets decreased by $592 million to $11.02 billion." `Institutional assets accounted for 59.6% of all MMF assets, with Government Institutional assets making up 94.5% of all institutional MMF totals. According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $35.7 billion in March through 3/5/25 to a record high $7.357 trillion. Assets rose by $94.2 billion in February, $52.8 billion in January, $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 2024. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $330 billion lower than Crane's asset series.
FDIC Quarterly Banking Profile Q4'24
The Federal Deposit Insurance Corporation released its latest "FDIC Quarterly Banking Profile," which says, "The [chart] shows that domestic deposits increased $214.4 billion, or 1.2 percent, during the fourth quarter. Transaction deposits increased from the prior quarter by $230.7 billion while time deposits declined $122.4 billion. Brokered deposits decreased for the fourth straight quarter, down $46.0 billion (3.6 percent) from the prior quarter. Estimated uninsured domestic deposits increased $218.5 billion, or 3.0 percent, during the quarter. Growth in estimated uninsured deposits was widespread; banks in all QBP asset size groups that report estimated uninsured deposits reported an increase in uninsured deposits from the previous quarter. The industry's insured deposits also increased, but at a slower pace. Insured deposits increased $39.1 billion quarter over quarter, or 0.4 percent." It explains, "[Another] chart shows that the DIF balance was $137.1 billion on December 31, 2024, up $4.0 billion from the third quarter. Assessment revenue continued to be the primary driver of the increase, adding $3.2 billion to the DIF balance. Interest earned on investment securities, negative provisions for insurance losses, and unrealized gains on securities also contributed a combined $1.5 billion to the fund, partially offset by operating expenses of $666 million." The FDIC adds, "`Insured deposits increased approximately 0.4 percent during the fourth quarter, while year-over-year insured deposit growth was 0.5 percent. The reserve ratio increased by 3 basis points in the fourth quarter to 1.28 percent as of December 31, 2024, and was 13 basis points higher than a year ago. The FDIC adopted a DIF Restoration Plan on September 15, 2020, to return the reserve ratio to the statutory minimum of 1.35 percent by September 30, 2028, as required by law. Based on FDIC projections, the reserve ratio remains on track to reach 1.35 percent by the statutory deadline. The FDIC will continue to monitor factors affecting the reserve ratio, including but not limited to, insured deposit growth and potential losses due to bank failures and related reserves."
Weekly Money Fund Portfolio Holds
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 Feb. 28) includes Holdings information from 55 money funds (down 12 from a week ago), or $3.133 trillion (down from $3.856 trillion) of the $7.321 trillion in total money fund assets (or 42.8%) 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 Feb. 12 News, "Feb. Money Fund Portfolio Holdings: Treasuries Higher, Fed Repo Plunges.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.466 trillion (down from $1.825 trillion a week ago), or 46.8%; Repurchase Agreements (Repo) totaling $1.140 trillion (down from $1.283 trillion a week ago), or 36.4%, and Government Agency securities totaling $284.3 billion (down from $320.3 billion), or 9.1%. Commercial Paper (CP) totaled $110.8 billion (down from a week ago at $173.8 billion), or 3.5%. Certificates of Deposit (CDs) totaled $54.5 billion (down from $95.7 billion a week ago), or 1.7%. The Other category accounted for $45.5 billion or 1.5%, while VRDNs accounted for $32.6 billion, or 1.0%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.468 trillion (46.8% of total holdings), Fixed Income Clearing Corp with $284.3B (9.1%), the Federal Home Loan Bank with $177.9 billion (5.7%), JP Morgan with $96.6B (3.1%), Citi with $79.5B (2.5%), BNP Paribas with $78.4B (2.5%), Federal Farm Credit Bank with $74.4B (2.4%), RBC with $58.5B (1.9%), Wells Fargo with $51.8B (1.7%) and the Federal Reserve Bank of New York with $48.5B (1.5%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($299.2B), Goldman Sachs FS Govt ($271.4B), JPMorgan 100% US Treas MMkt ($250.3B), Fidelity Inv MM: Govt Port ($228.3B), Morgan Stanley Inst Liq Govt ($176.3B), State Street Inst US Govt ($159.1B), Fidelity Inv MM: MM Port ($151.2B), Dreyfus Govt Cash Mgmt ($127.5B), Allspring Govt MM ($125.6B) and First American Govt Oblg ($105.8B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
Investment News on Berkshire Cash
Investment News writes "Berkshire Hathaway is piling cash. Advisors say that's not such a bad thing," which tells us, "Why did the so-called 'Oracle of Omaha' completely sell out of his S&P 500 index funds? And what's the deal with all that cash on his balance sheet? Inquiring financial advisors are dying to know." They explain, "The report also revealed that Berkshire Hathaway's cash stockpile ended 2024 at a hefty $334 billion, or nearly 30 percent of the investment company's total assets. Moreover, that cash position doubled over the course of last year, helped along by significant sales in its publicly traded equities portfolio of big-name stocks like Bank of America (BAC) and Apple (AAPL).... The 94-year-old Buffett didn’t offer much insight into his rational for holding all that cash, nor did he give his thoughts on current market conditions. In his accompanying letter to shareholders, he noted that, 'Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities.' He added: 'That preference won’t change.'" The piece adds, "Moreover, regarding his cash position, Buffett reiterated his long-held stance that 'Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.' Eric Amzalag, founder of Peak Financial Planning, holds Berkshire B-shares in 80 percent of his client portfolios. In his view, Berkshire has maintained an elevated cash position for quite some time, so he does not consider Buffett's decision to reduce exposure to the market-cap weighted index last year as being particularly bearish. Instead, he interprets it as a 'prudent investment management action.'"
Digital MM Debuts at ChinaAMC HK
The website TronWeekly posted a story titled, "Ethereum-Based $107M Digital Currency Market Fund Debuts at ChinaAMC HK," which tells us, "China Asset Management Hong Kong (ChinaAMC HK) launched the ChinaAMC HKD Digital Money Market Fund combining blockchain technology with traditional finance through its platform. This fund started operations on February 28, 2025, to serve retail Asia-Pacific investors through the Ethereum blockchain platform. The fund launched with an initial value of US$107 million represents the first money market fund token available for this demographic in the Asia-Pacific region. Standard Chartered Bank (Hong Kong) serves as the tokenization agent and administrator, but OSL Digital Securities is the market's key distributor." The piece explains, "The implementation of digital assets in conventional investment options holds a position as an emerging industry trend. The fund allocates its assets to short-term HKD-denominated deposits and high-quality money market instruments. Ethereum allows ChinaAMC HK to provide investors faster transactions and better market access. Hong Kong advances as a digital asset innovation center through this move which received approval from the Securities and Futures Commission (SFC)." It adds, "Investors who want exposure to diversified digital assets within the retail market can now access opportunities through the ChinaAMC HKD Digital Money Market Fund. The investment requires at least HKD 10, USD 1, or RMB 10 for minimum subscriptions across three share classes. Because of this accessibility feature, the fund seeks to increase its financial accessibility. Despite strong investments, the ChinaAMC HKD Digital Money Market Fund has faced risks because of blockchain security problems, credit risks tied to short-term deposits and currency fluctuations."
