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The SEC published its latest quarterly "Private Funds Statistics" report recently, which summarizes Form PF reporting and includes some data on "Liquidity Funds," or pools which are similar to but not money market funds. The publication shows overall Liquidity fund assets were higher in the latest reported quarter (​Q3'​23) at $​346 billion (​up from $​319 billion in Q2'​23 and up from $​331 billion in Q3'​22). We also again briefly review the part of the SEC'​s MMF Reforms which addresses "Amendments to Form PF Reporting Requirements for Large Liquidity Fund Advisers" and which go into effect in coming months, below.

The SEC'​s "Introduction" tells us, "This report provides a summary of recent private fund industry statistics and trends, reflecting data collected through Form PF and Form ADV filings. Form PF information provided in this report is aggregated, rounded, and/​or masked to avoid potential disclosure of proprietary information of individual Form PF filers. This report reflects data from Fourth Calendar Quarter 2021 through Third Calendar Quarter 2023 as reported by Form PF fi​lers." (Note: Crane Data believes the largest portion of these liquidity fund assets are securities lending reinvestment pools.)

The tables in the SEC'​s "Private Funds Statistics: Third Calendar Quarter 2023," with the most recent data available, show 68 Liquidity Funds (​most of which are "Section 3 Liquidity Funds," which are Liquidity Funds from advisers with over $​1 billion total in cash), down 1 from last quarter and down 10 from a year ago. (​There are 50 Section 3 Liquidity Funds out of the 68 Liquidity Funds.) The SEC receives Form PF reports from 33 Liquidity Fund advisers (​21 of which are Section 3 Liquidity Fund advisers), unchanged from last quarter and down 6 from a year ago.

The SEC'​s table on "​Aggregate Private Fund Net Asset Value" shows total Liquidity Fund assets at $​346 billion, up $​27 billion from Q2'​23 and up $​15 billion from a year ago (​Q3'​22). Of this total, $​345 billion is in Section 3 (​large manager) Liquidity Funds. The SEC'​s table on "​Aggregate Private Fund Gross Asset Value" shows total Liquidity Fund assets at $​361 billion, up $​29 billion from Q2'​23 and up $​26 billion from a year ago (​Q3'​22). Of this total, $​359 billion in is Section 3 (​large manager) Liquidity Funds.

A table on "Beneficial Ownership for Section 3 Liquidity Funds" shows $​135 billion is held by Other (​39.​1%), $​64 billion is held by Private Funds (​18.​6%), $​52 billion is held by Unknown Non-​U.​S. Investors (​15.​1%), $​16 billion is held by SEC-​Registered Investment Companies (​4.​6%), $​10 billion is held by Insurance Companies (​2.​9%) and $​3 billion is held by Non-​Profits (​0.​9%).

The tables also show that 68.​7% of Section 3 Liquidity Funds have a liquidation period of one day, $​331 billion of these funds may suspend redemptions, and $​299 billion of these funds may have gates. WAMs average a short 30 days (​36 days when weighted by assets), WALs are 45 days (​55 days when asset-​weighted), and 7-​Day Gross Yields average 5.​50% (​5.​25% asset-​weighted). Daily Liquid Assets average about 56% (​56% asset-​weighted) while Weekly Liquid Assets average about 61% (​62% asset-​weighted).

Overall, these portfolios appear shorter with a heavier Treasury exposure than money market funds in general; almost half of them (​36.​0%) are fully compliant with Rule 2a-​7. When calculating NAVs, 72.​0% are "Stable" and 28.​0% are "Floating."

As we'​ve mentioned before, last July, when the SEC'​s Money Market Fund Reforms were passed, they also included "​Amendments to Form PF Reporting Requirements for Large Liquidity Fund Advisers." The release explains, "Separately, the amendments will also modify certain reporting forms that are applicable to money market funds and large private liquidity funds advisers." The "Fact Sheet" explains, "In addition, the Commission adopted amendments to Form PF, the confidential reporting form for certain SEC-​registered investment advisers to private funds, to require additional information regarding the liquidity funds they advise that is generally aligned with the amended reporting for money market funds. These amendments were proposed by the Commission in January 2022."

The full final rules tell us, "The Commission is also amending Form PF, the confidential reporting form for certain SEC-​registered investment advisers to private funds to require additional information regarding the liquidity funds they advise. Liquidity funds are private funds that seek to maintain a stable NAV (​or minimize fluctuations in their NAVs) and thus can resemble money market funds. The amendments to section 3 of Form PF will provide a more complete picture of the short-​term financing markets in which liquidity funds invest and enhance the Commission'​s and the Financial Stability Oversight Council'​s ('​FSOC') ability to assess short-​term financing markets and facilitate our oversight of those markets and their participants. This, in turn, is designed to enhance investor protection efforts and systemic risk assessment. `​We have consulted with FSOC to gain input on these amendments to help ensure that Form PF continues to provide FSOC with information it can use to assess systemic risk."

It adds, "In a January 2022 release proposing amendments to Form PF, the Commission proposed changes to section 3 of Form PF that were intended to require large liquidity fund advisers to report substantially the same information that the Commission had proposed money market funds to report on Form N-​MFP. The proposed amendments to section 3 of Form PF included requirements for additional and more granular information regarding large liquidity fund operational information and assets, portfolio holdings, financing, and investor information as well as a new item concerning the disposition of portfolio securities. Consistent with the final amendments to Form N-​MFP, we are adopting largely as proposed the amendments to section 3 of Form PF, with some modifications to better tailor the reporting to private liquidity funds and remain consistent with the final requirements for money market funds under amended Form N-​MFP."

In other news, money fund yields were up 1 bp to 5.​13% on average (​as measured by our Crane 100 Money Fund Index) in the week ended April 26, after remaining unchanged the week prior. Our Crane 100 is an average of 7-​day yields for the 100 largest taxable money funds. Yields were 5.​14% on 3/​31 and 2/​29/​24, 5.​17% on 1/​31/​24, 5.​20% on 12/​31/​23, 4.​94% on 6/​30/​23, 4.​61% on 3/​31/​23 and 4.​05% on 12/​31/​22. The vast majority of money market fund assets now yield 5.​0% or higher. Assets of money market funds rose by $​40.​8 billion last week to $​6.​376 trillion according to Crane Data'​s Money Fund Intelligence Daily. Weighted average maturities were unchanged last week.

The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (​currently 712), shows a 7-​day yield of 5.​03%, unchanged in the week through Friday. Prime Inst MFs were unchanged at 5.​22% in the latest week. Government Inst MFs were up 1 bp at 5.​11%. Treasury Inst MFs were up 1 bp at 5.​07%. Treasury Retail MFs currently yield 4.​85%, Government Retail MFs yield 4.​82%, and Prime Retail MFs yield 5.​04%, Tax-​exempt MF 7-​day yields were down 8 bps at 3.​45%.

According to Monday'​s Money Fund Intelligence Daily, with data as of Friday (​4/​26), 7 money funds (​out of 833 total) yield under 3.​0% with $​176 million in assets, or 0.​0%; 117 funds yield between 3.​00% and 3.​99% ($​132.​0 billion, or 2.​1%), 249 funds yield between 4.​0% and 4.​99% ($​1.​318 trillion, or 20.​7%) and 460 funds now yield 5.​0% or more ($​4.​926 trillion, or 77.​3%). Our Brokerage Sweep Intelligence Index, an average of FDIC-​insured cash options from major brokerages, was unchanged at 0.​61%.

The latest Brokerage Sweep Intelligence, with data as of April 26, shows that there were no changes over the past week. Three of the 11 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.

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Federated Hermes, the 6th largest manager of money funds, reported Q1'​24 earnings and hosted its Q1'​24 earnings call late last week. On the call, President & CEO J. Christopher Donahue, comments, "We ended the first quarter with record assets under management of $​779 billion, driven by record money market assets of $​579 billion.... In Q1, we reached another record high for money market fund assets, money market separate account assets and total money market assets.... Total money market assets increased by $​19 billion during the first quarter from year end. Money market strategies continue to benefit from favorable market conditions for cash as an asset class, elevated liquidity levels in the financial system, and attractive yields compared to cash management alternatives, like bank deposits and direct investments in money market instruments like T-​bills and commercial paper. In the long-​expected, upcoming period of declining short term interest rates, we believe that market conditions for money market strategies will continue to be favorable compared to direct market rates and bank deposit rates."

He continues, "​Our estimate of money market mutual fund market share, including subadvised funds, was about 7.​35% at the end of the first quarter, down slightly from about 7.​40% at the end of 2023. Looking now at recent asset totals as of a few days ago, managed assets were approximately $​775 billion, including $​579 billion in money markets, $​77 billion in equities, $​96 billion in fixed income, $​20 billion in alternative private markets and $​3 billion in multi asset. Money market mutual fund assets stood at $​414 billion."

CFO Tom Donahue comments, "Total revenue for Q1 increased $​4.​9 million from the prior quarter, due mainly to higher average money market assets, increasing revenue by $​13.​7 million and higher average equity and fixed income assets, increasing revenue by $​7.​2 million, partially offset by fewer days, reducing revenue by $​5.​8 million, and lower carried interest and performance fees, reducing revenue by $​9.​3 million."

During the Q&​A, Patrick David with Autonomous Research asks, "​For the last few quarters, you'​ve talked about the money fund opportunity shifting from retail to institutional as the Fed pauses and then cuts. So with $​17 trillion still sitting in deposits, could you dig in on how those more institutional money fund pipelines and discussions are looking? What is your confidence that we should still expect the usual second half seasonal pop in those flows, despite what'​s already been an unusually strong start to the year?"

Chris Donahue responds, "​I'​m going to let Debbie comment in a minute, but a delay in the reduction of interest rates still keeps the money fund trade alive on the retail [​side]. And when ... you look at the marketplace in terms of what rates are even on commercial paper and T-​bills and things like that, it'​s still a decent trade. It'​s not the big trade that we talked about. But that was always dependent upon when [​or if] the Fed actually starts to lower interest rates, and everybody'​s guess is as good as mine."

Money Market CIO Deborah Cunningham says, "The longer rates are where they are today at ... a 5.​25-​5.​5% target rate, the better off we are from both a flow standpoint and an expectations standpoint.... So it'​s not a bad thing to delay [​cuts]. What it does delay, however, is the broader participation in the flows from the institutional side.... Institutional customers who have the capability of not only being in direct Treasuries, but direct commercial paper, which is a positively sloped curve at this point ... continue to be in those direct securities. Now that will change, unless something unless history doesn'​t repeat itself. But the likelihood [​of that] in our estimation is very small."

She states, "We think this is just a very big positive in the context of continuing the strength in the retail flow. And when you mentioned the $​17 trillion that are still there from a deposit perspective, I think about 40% of that is in non-​interest-​bearing deposits. So that'​s just fertile ground for additional converters into what we believe is the better cash management product."

Analyst Ken Worthington from J.​P. Morgan queries, "TradeWeb announced the acquisition of ICD, which follows BlackRock'​s acquisition of Cachematrix. How prominent are these platforms or portals in money market fund distribution, and how fast is the use of these platforms growing? What portion of your money market fund sales come through these portals?" Donahue answers, "So the portals have [​seen] long-​term, growing use.... I don'​t know what our percentage of assets coming through portals is, but just about every one of the clients on the institutional side that are corporate are using various portals. I don'​t have more information on how we break down. As you know, we break our information down by institutional and retail, which is basically, broker-​dealer. But I don'​t know the numbers by what comes through what platform."

Cunningham adds, "Maybe to add to that for just a second on the platform side from a trading perspective, for instance, with Tradeweb.... We have very little, less than 5%. What we do on those types of platforms, we are much more of a voice-​to-​voice type of trading firm. We feel like we get better execution. We feel like we'​re better received from a content and expectation standpoint. This kind of endears us a little bit more when there are special things that come to the market. We feel like that helps us from a positioning perspective to be able to be part of those ... more esoteric types of products that come to the market. That is not the market norm. I'​d say the market norm is probably over 50%, but it'​s mostly indicative of smaller players, not the larger players. I think most larger players like to have the relationship and the voice contact. That is ... the way that we operate our trading business from an FHI standpoint."

She explains, "As far as the portal distribution for our money market funds, we are on basically all the portals that are out there. So to the extent that the portals continue, and maybe they consolidate to some degree from an ownership perspective, we'​re not looking at that as problematic.... I don'​t know the percentage, that Chris was mentioning, but it is not a very large portion of the business compared to other channels." President Ray Hanley adds, "The open architecture is a key part of those portals [​so] we don'​t expect any change in our business, for example, as a result of the ICD transaction."

Asked about ideal environments for inflows, Donahue states, "My answer is that since money market funds are the Eighth Wonder of the World, they'​re always a wonderful product. We'​ve gone through 50 some years of these cycles, and people always need their cash taken care of and we always gain more clients and don'​t lose clients. Specifically, though, the main thing to me in terms of environment for the money fund is the word '​measured.' So if it'​s measured up, that means slow and deliberate. If it'​s measured down, that means slow and deliberate. Measured is always better as an environment for the money funds. Right now, because we have an open retail trade and can look forward to a stronger institutional trade, it'​s almost nirvana for money funds."

Finally, Cunningham weighs in, "Nirvana is one that I use quite often and I agree wholeheartedly. From a future expectations environment standpoint, measured is good, which is effectively, your first scenario ... where interest rates go down in a measured and orderly fashion. The curve is predictive of such declines. The key to that scenario is it'​s, again, a perfect type of scenario for gathering cash and keeping the cash very diversified amongst different players, different investor bases. But the key is that it goes to what I'​m going to call maybe the 3% level. So 100 basis points above ... where the target inflation rate is, not to the 0% level, which is where it stood ... for a very long period of time."

She adds, "​Your second scenario [​stagflation], a slow growth environment with inflation creeping up to some degree, that'​s not something that'​s really too problematic for us either. It'​s maybe not Nirvana, but either one of those scenarios works, with the first one being the preferred and what we think at this point is expected. `​Now with that start date being moved out ... and there be a scenario where it doesn'​t start at all in 2024, I think the answer is potentially yes."

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ICI'​s latest "Money Market Fund Assets" report shows money market mutual fund assets rebounding after falling sharply the prior week due to tax payments. MMF assets are up by $​91 billion, or 1.​9%, year-​to-​date in 2024 (​through 4/​24/​24), with Institutional MMFs down $​20 billion, or -​0.​6% and Retail MMFs up $​111 billion, or 6.​6%. Over the past 52 weeks, money funds have risen by $​715 billion, or 13.​6%, with Retail MMFs rising by $​502 billion (​26.​4%) and Inst MMFs rising by $​262 billion (​7.​9%). (Note: Thanks to those who visited with us at the `​The New England AFP Annual Conference!)

The weekly release says, "Total money market fund assets increased by $​9.​13 billion to $​5.​98 trillion for the week ended Wednesday, April 24, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $​3.​97 billion and prime funds increased by $​3.​15 billion. Tax-​exempt money market funds increased by $​2.​01 billion." ICI'​s stats show Institutional MMFs increasing $​8.​9 billion and Retail MMFs rising $​0.​2 billion in the latest week. Total Government MMF assets, including Treasury funds, were $​4.​836 trillion (​80.​9% of all money funds), while Total Prime MMFs were $​1.​014 trillion (​17.​0%). Tax Exempt MMFs totaled $​122.​9 billion (​2.​1%).

ICI explains, "Assets of retail money market funds increased by $​211 million to $​2.​40 trillion. Among retail funds, government money market fund assets decreased by $​2.​44 billion to $​1.​54 trillion, prime money market fund assets increased by $​1.​17 billion to $​746.​70 billion, and tax-​exempt fund assets increased by $​1.​48 billion to $​112.​86 billion." Retail assets account for over a third of total assets, or 40.​2%, and Government Retail assets make up 64.​2% of all Retail MMFs.

They add, "Assets of institutional money market funds increased by $​8.​92 billion to $​3.​58 trillion. Among institutional funds, government money market fund assets increased by $​6.​41 billion to $​3.​29 trillion, prime money market fund assets increased by $​1.​98 billion to $​270.​02 billion, and tax-​exempt fund assets increased by $​527 million to $​12.​02 billion." Institutional assets accounted for 59.​8% of all MMF assets, with Government Institutional assets making up 92.​1% of all institutional MMF totals.

According to Crane Data'​s separate Money Fund Intelligence Daily series, money fund assets have fallen by $​26.​4 billion in April (​through 4/​24) to $​6.​371 trillion (​they were a record $​6.​538 trillion on 4/​2). Assets fell $​68.​8 billion in March, but rose $​72.​1 billion in February, $​93.​9 billion in January, $​32.​7 billion in December and $​226.​4 billion in November. MMF totals fell by $​31.​9 billion in October. They rose $​93.​9 billion in September, $​98.​3 billion in August and $​34.​7 billion in July. Note that ICI'​s asset totals don'​t include a number of funds tracked by the SEC and Crane Data, so they'​re over $​400 billion lower than Crane'​s asset series.

In other news, a press release titled, "Federated Hermes, Inc. reports first quarter 2024 earnings of $​0.​89" tells us, "Federated Hermes, Inc. (​FHI), a global leader in active, responsible investing, today reported earnings per diluted share (​EPS) of $​0.​89 for Q1 2024, compared to $​0.​78 for the same quarter last year, on net income of $​75.​0 million for Q1 2024, compared to $​69.​6 million for Q1 2023."

It states, "Federated Hermes' total managed assets were a record $​778.​7 billion at March 31, 2024, up $​77.​7 billion or 11% from $​701.​0 billion at March 31, 2023 and up $​21.​1 billion or 3% from $​757.​6 billion at Dec. 31, 2023. Total average managed assets for Q1 2024 were $​776.​5 billion, up $​97.​1 billion or 14% from $​679.​4 billion reported for Q1 2023 and up $​48.​5 billion or 7% from $​728.​0 billion for Q4 2023."

"Investors continued to turn to the attractive yields available in our liquidity products. Our money market asset increases drove Federated Hermes to record assets under management for the sixth consecutive quarter," said J. Christopher Donahue, president and chief executive officer. "Investors also sought to add duration to portfolios, and net sales of fixed-​income products were led by our flagship core-​plus offering, Federated Hermes Total Return Bond Fund, the Federated Hermes Total Return Bond ETF and ultrashort products."

Federated explains, "Fixed-​income assets were $​96.​3 billion at March 31, 2024, up $​8.​8 billion or 10% from $​87.​5 billion at March 31, 2023 and up $​1.​4 billion or 1% from $​94.​9 billion at Dec. 31, 2023. Top-​selling fixed-​income funds during Q1 2024 on a net basis were Federated Hermes Total Return Bond Fund, Federated Hermes Ultrashort Bond Fund, Federated Hermes Government Ultrashort Bond Fund, Federated Hermes Total Return Bond ETF and Federated Hermes Institutional High Yield Bond Fund."

They continue, "Money market assets were a record $​578.​8 billion at March 31, 2024, up $​73.​0 billion or 14% from $​505.​8 billion at March 31, 2023 and up $​18.​8 billion or 3% from $​560.​0 billion at Dec. 31, 2023. Money market fund assets were a record $​417.​1 billion at March 31, 2024, up $​59.​8 billion or 17% from $​357.​3 billion at March 31, 2023 and up $​10.​9 billion or 3% from $​406.​2 billion at Dec. 31, 2023."

They add, "Revenue increased $​14.​2 million or 4% primarily due to an increase in revenue due to higher average money market assets. This increase was partially offset by a decrease in revenue due to lower average equity assets. During Q1 2024, Federated Hermes derived 48% of its revenue from long-​term assets (​30% from equity, 12% from fixed income, and 6% from alternative/​private markets and multi-​asset), 51% from money market assets, and 1% from sources other than managed assets."

Finally, Federated writes, "Operating expenses increased $​0.​8 million. Nonoperating income (​expenses), net decreased $​1.​9 million or 26% due primarily to a smaller increase in the market value of investments in Q1 2024 compared to the increase in the market value of investments in Q1 2023. This decrease was partially offset by an increase in investment yields due to higher interest rates. Federated Hermes will host an earnings conference call at 9 a.​m. Eastern on Friday, April 26, 2024. Investors are invited to listen to the earnings teleconference by calling 888-​506-​0062.... To listen online, go to the About section of FederatedHermes.​com/​us at least 15 minutes prior to register and join the call."

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With less than 2 months to go until Crane'​s Money Fund Symposium will be held in Pittsburgh, June 12-​14, we are also starting preparations for our 10th Annual European Money Fund Symposium. The preliminary agenda has been released and registrations are now being taken for this year'​s European event, which will take place Sept. 19-​20 at the Hilton London Tower Bridge in London, England. We provide more details on both shows below, and feel free to contact us for more information. (Note: If you haven'​t registered yet for the U.​S. Money Fund Symposium, you can still do so via www.​moneyfundsymposium.​com. Note too: For those attending The New England AFP Annual Conference, April 25-​26 in Boston, we hope to see some of you at the show!)

Our 2023 European Symposium event in Edinburgh attracted over 160 money fund professionals, sponsors and speakers. Given rising rates and expectations for another round of regulatory changes in Europe, we expect our show in London to once again be the largest gathering of money market professionals outside the U.​S. "European Money Fund Symposium offers European, global and "​offshore" money market portfolio managers, investors, issuers, dealers and service providers a concentrated and affordable educational experience, and an excellent and informal networking venue," says Crane Data President Peter Crane. "Our mission is to deliver the best possible conference content at an affordable price to money market fund professionals," he adds.

Registration for European Money Fund Symposium is $​1,​000 USD. EMFS will be held at the Hilton London Tower Bridge. Hotel rooms must be booked before August 14 to receive our discounted rate of E329. Visit www.​craneeurosymposium.​com to register, and contact us to request the PDF brochure. (​Let us know too if you'​d like information on speaking or sponsorships.)

The EMFS agenda features sessions conducted by many of the leading authorities on money funds in Europe and worldwide. The Day One Agenda for Crane'​s European Money Fund Symposium includes: "Welcome to European Money Fund Symposium" with Peter Crane of Crane Data; followed by a "IMMFA Update: The State of MMFs in Europe" with Kim Hochfeld of IMMFA and IMMFA'​s Veronica Iommi; "Online Trading Portals & Corporate Investors" with Laide Majiyagbe of BNY Mellon; and, "Senior Portfolio Manager Perspectives," featuring Joe McConnell of J.​P. Morgan AM, Douglas McPhail of Morgan Stanley I.​M., Ketan Shah of Legal & General I.​M. and Dan Singer of J.​P. Morgan Securities.

The afternoon will consist of: "Sterling & U.​K. Money Fund Issues," with Harm Carstens of DWS Investment, Paul Mueller of Invesco and Aman Samra of Abrdn; "Euro, ESG & French Standard Money Funds" with Vanessa Robert of Moody'​s Investors Service, David Callahan of Lombard Odier I.​M. and Marc Fleury of BNP Paribas A.​M.; "U.​S. Money Fund & European USD Update" with Peter Crane of Crane Data and Deborah Cunningham of Federated Hermes; and lastly, "Ultra-​Short Bond Funds & Standard MMFs" with Neil Hutchison of J.​P. Morgan Asset Mgmt, Valerio Lupini of Fitch Ratings and Alastair Sewell of Aviva Investors.

The Day Two Agenda includes: "Strategists Speak: Rates, Risks & Hot Topics" with Soniya Sadeesh of Deutsche Bank and Ronald Man of BofA Securities; "Global, Continental & Brussels Overview" with Dennis Gepp of Federated Hermes (​UK), Michael Pedroni of ICI Global and Rudolf Siebel of BVI; and, "Money Fund Reforms: Latest US & Possible EU" with Brenden Carroll of Dechert LLP and John Hunt of Sullivan & Worcester LLP.

The afternoon of day 2 will include: "Repo Developments & Platforms in Europe" with Andy Turvey of GLMX and Cassandra Jones of State Street; "Dealer & Issuer Supply Roundtable" with George MacKenzie of Rabobank, Marianne Medora of Groupe BPCE/​Natixis, Stewart Cutler of Barclays and Kieran Davis of TD Securities; and, "Chinese Money Funds & Asian Markets" with Michael Mango of S&​P Global Ratings and Minyue Wang of Fitch Ratings.

Also, with less than two months to go, Crane Data is making final preparations for our big show, Money Fund Symposium, which is June 12-​14 at The Westin Pittsburgh. The agenda is all set and registrations are still being taken.

Money Fund Symposium attracts money fund managers, marketers and servicers, cash investors, money market securities dealers, issuers, and regulators. Visit the Money Fund Symposium website for more information. Registration is $​1,​000, and discounted hotel reservations are available. We hope you'​ll join us in Pittsburgh in June or London in September! (​E-​mail us at info@​cranedata.​com to request the full brochure.)

Also, mark your calendars for our next Crane'​s Money Fund University, which will be held in Providence, R.​I., Dec. 19-​20, 2024. Money Fund University covers the history of money funds, interest rates, regulations (​Rule 2a-​7), ratings, rankings, money market instruments such as commercial paper, CDs and Treasuries, 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.

Finally, our next Bond Fund Symposium will be held in Newport Beach, Calif., on March 27-​28, 2025. (​Click here to see last year'​s agenda.) Bond Fund Symposium is the only conference devoted entirely to bond mutual funds, bringing together bond fund managers, marketers, and professionals with fixed-​income issuers, investors and service providers. The majority of the content is aimed at the growing ultra-​short and conservative ultra-​short bond fund marketplace. Let us know if you'​d like more details on any of our events, and we hope to see you in Pittsburgh in June, in London in September, in Providence in December or in Newport Beach next March! Thanks to all of our speakers and sponsors and for your patience and support over the past three rough years!

In other news, Crypto-​reporter.​com published an article titled, "Archax Increases Tokenised Money Market Fund Offerings." It says, "Archax, the first FCA regulated digital asset exchange, broker and custodian, announced that it is expanding the range of fund shares it offers in tokenised form with the provision of the BlackRock ICS US Treasury money market fund (​MMF), in partnership with the HBAR Foundation. This builds on its launch of tokenised access to abrdn'​s MMFs last year, which Archax has created on both the Hedera and Ethereum blockchains. This additional BlackRock MMF, along with existing offerings, are all available directly on the Archax platform, as well as through connected networks. The first transaction of tokenised shares of the BlackRock MMF, which was also tokenised on Hedera, the open-​source, proof-​of-​stake public ledger, was completed across the Ownera FinP2P digital asset network."

The piece continues, "In the current high interest-​rate environment, putting cash, treasury and stablecoin assets to work is more important than ever. MMFs are a useful vehicle as they have the potential to provide institutional stability and yield, due to their underlying investments in short-​term debt products, and reduce single bank or stablecoin provider counterparty risk. In addition, through creating a secondary market for the tokenised instruments, Archax can provide investors with the benefit of almost instantaneous transfer of MMF shares throughout the day -- an advantage which can also see the tokens being used for collateral movement instead of just traditional subscriptions/​redemptions."

They quote Graham Rodford, CEO and co-​founder of Archax, "Money market funds from different asset managers can follow different underlying investment theses -- for example investing in short-​term governmental debt issuances or commercial short-​term debt issuances. Consequently, it is important to have a range of offerings available to cater to differing client needs. Adding more funds into our portfolio of tokenised shares of MMF offerings expands the flavours we have on offer and so allows us to serve a broader range of potential clients.... As well as MMF product breadth, product distribution is also vitally important.... And so we are pleased to be expanding our partnership with Ownera to further leverage their FinP2P network for distribution of tokenised shares in MMFs and to help facilitate our first $​multi-​million trade on Hedera too."

The article also quotes Ami Ben David, CEO and co-​founder of Ownera, "Using a simple Ownera Buy-​Side Router, suitable banks of all sizes, wealth managers, asset managers, broker-​dealers, RIAs (​registered investment advisors), and exchanges can route transactions to the tokenized MMFs offered by Archax. This is another step towards realising the vision we share with Archax and other partners across the ecosystem, of a global institutional tokenized assets ecosystem with market-​wide access, distribution and liquidity."

Finally, they write, "​With all the excitement in the marketplace around real-​world-​asset (​RWA) tokenisation, funds are certainly front and centre as a use case. MMFs are particularly prominent too, as these provide benefits to and serve both the Traditional Finance (​TradFi) tokenised world as well as the pure crypto space." For more, see these Crane Data News stories: "CoinDesk on Tether Stablecoin; Paxos" (​2/​5/​24), "Forbes: SEC Targets PayPal Stablecoin" (​11/​13/​23), "J.​P. Morgan on Stablecoin Shrinkage, Risks; Bloomberg, WSJ and NY Fed" (​9/​28/​23), "CNBC on PayPal, Paxos' Stablecoin" (​8/​10/​23) and "NY Fed on '​Runs on Stablecoins'" (​7/​19/​23).

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We wrote in our April 19 Link of the Day on a press release titled, "Austrian, French, Italian and Spanish financial market authorities give their key priorities for a macro-​prudential approach to asset management," but today we quote from the full publication, "A macro-​prudential approach to asset management." It says, "The risks stemming from non-​bank financial intermediation (​NBFI) have been subject to scrutiny from regulators worldwide since the Global Financial Crisis. The banking regulation tightening that followed, the desire to reduce the economy'​s dependency on bank financing in a number of jurisdictions, as well as the low (​including negative) interest rates policy, have resulted in an increase of the share of NBFI in the global financial system. In addition, several recent events have illustrated the fact that shocks that either spread through or originate from the NBFI world may have a potentially significant negative effect on the real economy, which amounts to say that they are of potential systemic relevance."

The paper tells us, "​Those concerns warrant some nuances in two ways. First, although parts of the NBFI ecosystem might indeed offer products that have bank-​like features and would then call for bank-​like regulation -- in the spirit of the well-​known same activity, same risk, same regulation principle -- the NBFI world, overall, is extremely diverse and generally, much different from banks. Asset management, in particular, follows an agency business model. Asset managers do not take risk as principals."

It explains, "​This paper focuses on the asset management industry. The international work so far has focused on liquidity risk of money market funds on the one hand, and open ended funds on the other (​there is currently a work stream dedicated to leverage in NBFI, which is another fundamental aspect of macro-​prudential stability). Despite the heterogeneity of the wide array of products in the asset management industry, two main takeaways have emerged from these works: First, investment funds need to be acknowledged and understood as investment products, in the sense that investors carry the economic risks associated with the underlying assets. Any contractual feature that generates a different expectation from investors is likely to result in excessive volatility due to arbitrage by investors."

The piece states, "This is the case in particular for NAV smoothing techniques ('​amortised cost accounting') of certain types of money market funds, which create a confusion by making investments products contractually comparable to demand deposits, even though the contractual promise is not internally consistent (​as investors are still supposed to bear all the risks of the assets). More broadly, any mechanism that may create a first mover advantage by not adequately passing on to investors the full cost of their own decisions, including redemption demands, is conducive to such problems. Second, investment funds must ensure that the promises they make to investors are consistent with their investment policy and suited to their investors. In particular, funds that invest in illiquid assets should be structured in a way that reflects that illiquidity. In addition, a large range of tools should be available to manage liquidity stress, to ensure that managers have the capacity to act in the best interest of their investors at all time."

It continues, "These themes are not new to securities market regulators as they are crucial to protect investors. A major breakthrough was made by the FSB in its 2022 Progress Report with the concept of repurposing existing tools. The idea behind this concept is that ex-​ante requirements aim at ensuring that investors are treated fairly and are offered a contractual promise that is internally consistent -- a principle that should be familiar to all securities market regulators -- and addresses financial stability concerns to a large extent. The FMA, AMF, CONSOB and CNMV, therefore, strongly support that concept."

The update also says, "There are four priorities that stand out in our view: The first one is to ensure a wide availability and greater use of LMTs in all kinds of open-​ended funds. The recent AIFMD-​UCITS review will allow for a significant progress in this respect making most common LMTs available across Member States, although level 2 measures as regards the use of those tools are still in the making. Given the strong reluctance of asset managers to adopt LMTs, one key issue is to make sure that LMTs are appropriately calibrated so they are effectively used. Nevertheless, the use of LMTs cannot substitute the need to offer appropriate redemption conditions aligned with the liquid nature of the fund'​s assets. To this end, the recent FSB recommendations on the redemption conditions of open-​ended funds should be fully implemented, in particular regarding ELTIF funds."

It comments, "The second relates to the review of Money Markets Funds Regulation (​MMFR). The key priority of this review should be to remove any first mover advantage and any confusion with on-​demand/​bank deposits by banning amortised cost accounting (​for Low Volatility Net Asset Value/​LVNAV and Constant Net Asset Value/​CNAV alike). These NAV smoothing techniques are intrinsically detrimental to financial stability and amount to making false claims to investors who are led to believe that they enjoy a contractual commitment to a stable NAV, whatever the value of the underlying assets might be. If that were the case, then the fund would act as a deposit and should be regulated as such. The other key area should be to review liquidity requirements upwards. Such an increase should remain moderate for VNAV funds, as price adjustments will create a natural incentive to limit redemption pressure. Liquidity requirements should remain expressed in terms of cash and not be mixed up with less liquid assets such as government bonds."

The piece adds, "In a more strictly macro-​prudential fashion, two key priorities should be explored: The EU would strongly benefit from the introduction of a truly consolidated supervisory approach for large cross border asset management groups. The structure of such groups has evolved and it is now common that the portfolio management teams, the risk management teams, and the funds are supervised by different NCAs in different countries, which creates coordination issues. This is particularly relevant in times of stress where there needs to be a close dialogue between supervisory authorities and asset managers. In addition, it is also relevant outside the context of a crisis. For instance, asset managers that have a large market footprint can be expected to display correlation in their investment behaviour across different funds -- even though those funds are managed for investors with different investment profiles. From a supervisory standpoint, there would be a strong benefit in being able to assess risk exposure at the level of all the funds managed by a given asset manager."

Finally, they write, "In practical terms, a consolidated supervisory approach should rely on a supervisory college gathering relevant NCAs and ESMA (​and possibly the ECB as an observer). The primary responsibility of this supervisory college would be i) to understand the group'​s overall risk exposures; ii) to assess the robustness of risk management frameworks within the group; and iii) to perform stress tests against economic stress scenarios to assess the resilience of the asset management group and each of its funds. The stress tests could be defined by ESMA, who could recommend using ex-​ante powers -- such as those of Article 25 of AIFMD regarding leverage limits. To ensure that crosscutting decisions taken by the supervisory college are effectively implemented, a '​lead NCA' for each group should be nominated (​e.​g. the licensing authority or the authority in which jurisdiction is the highest AUM for that group). The coordination actions would not interfere with the powers granted to each NCA by European legal texts. To provide asset managers with some benefits in return, that consolidated approach would need to be grounded in some regulatory requirements, e.​g. acknowledging intragroup service provision arrangements."

For more, see the website IPE.​com, which recently published the piece, "European financial market authorities set priorities for macro-​prudential approach." They state, "As the European Commission prepares to launch its consultation on the macro-​prudential treatment of risk in asset management, four major European market authorities, have set out their views on the priorities in the debate on a macro-​prudential approach to asset management. The authorities -- Austrian Finanzmarktaufsicht (​FMA), Italian Commissione Nazionale per le Società e la Borsa (​CONSOB), Spanish Comisió​n Nacional del Mercado de Valores (​CNMV) and French Autorité des marché​s financiers (​AMF) -- said the risks stemming from non-​bank financial intermediation have been subject to scrutiny from regulators worldwide over the past years, especially as its share in the global financial system has been increasing since. In addition, concerns have been raised about potential significant negative effects that shocks, either spreading through or originating from non-​bank financial intermediation, may have on the real economy, the quartet added."

​

The Securities and Exchange Commission'​s latest monthly "Money Market Fund Statistics" summary shows that total money fund assets fell by $​68.​5 billion in March to $​6.​457 trillion, after hitting a record $​6.​525 trillion the month prior. The SEC shows Prime MMFs rising $​8.​1 billion in March to $​1.​415 trillion, Govt & Treasury funds decreasing $​78.​8 billion to $​4.​914 trillion and Tax Exempt funds increasing $​2.​2 billion to $​128.​3 billion. Taxable yields inched lower in March after dipping in February. The SEC'​s Division of Investment Management summarizes monthly Form N-​MFP data and includes asset totals and averages for yields, liquidity levels, WAMs, WALs, holdings, and other money market fund trends. We review their latest numbers below. (Month-​to-​date in April through 4/​19, total money fund assets decreased by $​61.​9 billion to $​6.​336 trillion, according to our separate, and slightly smaller, MFI Daily series.)

March'​s overall asset decrease follows an increase of $​65.​9 billion in February, $​87.​7 billion in January, $​34.​0 billion in December and $​225.​7 billion in November. MMFs decreased $​41.​2 billion in October, but increased $​79.​7 billion in September, $​114.​2 billion in August and $​28.​8 billion in July. Assets rose $​19.​6 billion in June, $​156.​6 billion in May and $​49.​9 billion in April. Over the 12 months through 3/​31/​24, total MMF assets increased by $​752.​5 billion, or 13.​2%, according to the SEC'​s series.

The SEC'​s stats show that of the $​6.​457 trillion in assets, $​1.​407 trillion was in Prime funds, up $​8.​1 billion in March. Prime assets were up $​33.​5 billion in February, $​52.​5 billion in January, $​1.​2 billion in December, $​32.​5 billion in November, $​13.​9 billion in October, $​14.​3 billion in September, $​18.​5 billion in August, $​28.​9 billion in July, $​11.​0 billion in June, $​13.​7 billion in May and $​36.​0 billion in April. Prime funds represented 21.​9% of total assets at the end of March. They'​ve increased by $​264.​2 billion, or 23.​0%, over the past 12 months. (Note that the SEC'​s series includes a number of internal money funds not tracked by ICI, though Crane Data includes most of these assets in its collections.)

Government & Treasury funds totaled $​4.​914 trillion, or 76.​1% of assets. They decreased $​78.​8 billion in March, increased $​33.​1 billion in February, $​39.​7 billion in January, $​31.​7 billion in December, $​193.​7 billion in November, decreased $​62.​4 billion in October, increased $​64.​6 billion in September, $​92.​2 billion in August, $​3.​1 billion in July, $​4.​9 billion in June, $​137.​4 billion in May and $​19.​3 billion in April. Govt & Treasury MMFs are up $​478.​5 billion over 12 months, or 10.​8%. Tax Exempt Funds increased $​2.​2 billion to $​128.​3 billion, or 2.​0% of all assets. The number of money funds was 289 in March, down 2 from the previous month and down 5 funds from a year earlier.

Yields for Taxable MMFs inched lower while Tax Exempt MMFs rose in March. The Weighted Average Gross 7-​Day Yield for Prime Institutional Funds on Mar. 31 was 5.​44%, down 1 bp from the prior month. The Weighted Average Gross 7-​Day Yield for Prime Retail MMFs was 5.​50%, down 2 bps from the previous month. Gross yields were 5.​38% for Government Funds, unchanged from last month. Gross yields for Treasury Funds were unchanged at 5.​37%. Gross Yields for Tax Exempt Institutional MMFs were up 55 basis points to 3.​79% in March. Gross Yields for Tax Exempt Retail funds were up 34 bps to 3.​64%.

The Weighted Average 7-​Day Net Yield for Prime Institutional MMFs was 5.​38%, down 1 basis point from the previous month and up 52 bps from 3/​31/​23. The Average Net Yield for Prime Retail Funds was 5.​23%, down 2 bps from the previous month, and up 49 bps since 3/​31/​23. Net yields were 5.​14% for Government Funds, up 1 bp from last month. Net yields for Treasury Funds were unchanged from the previous month at 5.​15%. Net Yields for Tax Exempt Institutional MMFs were up 47 bps from February to 3.​61%. Net Yields for Tax Exempt Retail funds were up 33 bps at 3.​38% in March. (​Note: These averages are asset-​weighted.)

WALs and WAMs were mixed in March. The average Weighted Average Life, or WAL, was 49.​3 days (​unchanged) for Prime Institutional funds, and 49.​8 days for Prime Retail funds (​up 1.​8 days). Government fund WALs averaged 87.​1 days (​down 1.​0 days) while Treasury fund WALs averaged 80.​8 days (​down 1.​1 days). Tax Exempt Institutional fund WALs were 7.​4 days (​up 1.​1 days), and Tax Exempt Retail MMF WALs averaged 25.​4 days (​up 0.​1 days).

The Weighted Average Maturity, or WAM, was 32.​8 days (​up 0.​9 days from the previous month) for Prime Institutional funds, 35.​7 days (​up 2.​5 days from the previous month) for Prime Retail funds, 37.​7 days (​down 0.​9 days from previous month) for Government funds, and 43.​8 days (​down 2.​0 days from previous month) for Treasury funds. Tax Exempt Inst WAMs were up 1.​2 days to 7.​5 days, while Tax Exempt Retail WAMs were up 0.​2 days from previous month at 24.​7 days.

Total Daily Liquid Assets for Prime Institutional funds were 57.​7% in March (​up 1.​1% from the previous month), and DLA for Prime Retail funds was 42.​0% (​up 0.​4% from previous month) as a percent of total assets. The average DLA was 67.​1% for Govt MMFs and 94.​0% for Treasury MMFs. Total Weekly Liquid Assets was 72.​2% (​up 2.​2% from the previous month) for Prime Institutional MMFs, and 60.​1% (​down 0.​3% from the previous month) for Prime Retail funds. Average WLA was 80.​8% for Govt MMFs and 98.​3% for Treasury MMFs.

In the SEC'​s "Prime Holdings of Bank-​Related Securities by Country table for March 2024," the largest entries included: Canada with $​182.​2 billion, the U.​S. with $​181.​5B, Japan with $​122.​8 billion, France with $​98.​2 billion, the Netherlands with $​53.​9B, the U.​K. with $​53.​6B, Germany with $​35.​0B, Aust/​NZ with $​27.​3B and Switzerland with $​7.​2B. The gainers among the "Prime MMF Holdings by Country" included: Canada (​up $​22.​5B), the U.​S. (​up $​12.​9B) and Netherlands (​up $​6.​3B). Decreases were shown by: Aust/​NZ (​down $​13.​0B), Japan (​down $​10.​6B), France (​down $​7.​6B), the U.​K. (​down $​0.​7B), Switzerland (​down $​0.​4B) and Germany (​down $​0.​3B).

The SEC'​s "Prime Holdings of Bank-​Related Securities by Region" table shows The Americas had $​363.​7 billion (​up $​35.​4B), while Eurozone had $​202.​6B (​down $​8.​1B). Asia Pacific subset had $​177.​0B (​down $​22.​2B), while Europe (​non-​Eurozone) had $​118.​0B (​down $​21.​5B from last month).

The "​Prime MMF Aggregate Product Exposures" chart shows that of the $​1.​403 trillion in Prime MMF Portfolios as of Mar. 31, $​636.​4B (​45.​4%) was in Government & Treasury securities (​direct and repo) (​up from $​594.​7B), $​343.​2B (​24.​5%) was in CDs and Time Deposits (​down from $​381.​9B), $​197.​7B (​14.​1%) was in Financial Company CP (​down from $​198.​7B), $​147.​8B (​10.​5%) was held in Non-​Financial CP and Other securities (​up from $​144.​1B), and $​78.​0B (​5.​6%) was in ABCP (​up from $​77.​4B).

The SEC'​s "Government and Treasury Funds Bank Repo Counterparties by Country" table shows the U.​S. with $​390.​2 billion, Canada with $​208.​9 billion, France with $​172.​7 billion, the U.​K. with $​96.​9 billion, Germany with $​14.​4 billion, Japan with $​141.​2 billion and Other with $​38.​5 billion. All MMF Repo with the Federal Reserve was up $​72.​9 billion in March to $​537.​8 billion.

Finally, a "Percent of Securities with Greater than 179 Days to Maturity" table shows Prime Inst MMFs 6.​2%, Prime Retail MMFs with 5.​8%, Tax Exempt Inst MMFs with 0.​0%, Tax Exempt Retail MMFs with 3.​2%, Govt MMFs with 15.​1% and Treasury MMFs with 12.​2%.

​

The hits keep coming to the Prime Institutional money fund sector, as Goldman Sachs becomes the latest fund firm to announce an exit from the space. A Prospectus Supplement filing Friday for the $​1.​6 billion Goldman Sachs Financial Square Money Market Fund and the $​2.​9 billion Goldman Sachs Financial Square Prime Obligations Fund, including its Administration, Capital, Institutional, Preferred, Select, Service, and Drexel Hamilton Class Shares, explains, "At a meeting held on April 16-​17, 2024, upon the recommendation of Goldman Sachs Asset Management, L.​P., the Board of Trustees of Goldman Sachs Trust approved a proposal to liquidate the Goldman Sachs Financial Square Money Market Fund and Goldman Sachs Financial Square Prime Obligations Fund, each a series of the Trust. After careful consideration of a number of factors, the Board concluded that it is advisable and in the best interest of the Funds and their shareholders to liquidate the Funds. The Funds are expected to be liquidated on or about September 16, 2024, pursuant to Plans of Liquidation approved by the Board. The Liquidation Date may be changed without notice at the discretion of the Trust'​s officers." This brings the total of Prime Institutional money funds declaring either pending conversions to Government or pending liquidations to 5 funds to date, representing $​229.​3 billion in assets, or 34.​9% of the $​657.​0 billion total in Prime Inst MMFs (​assets as of 3/​31/​24). (​For more, see these Crane Data News stories: "Federated Liquidating Money Mkt Trust" (​4/​1/​24), "Vanguard Market Liquidity Fund Files to Go Government, Joins American" (​3/​20/​24) and "American Funds Central Cash to Convert to Govt to Avoid Liquidity Fees" (​2/​6/​24).)

The filing explains, "Shares of the Funds will no longer be available for purchase as of the close of business on August 16, 2024, except that existing shareholders of the Funds may continue to purchase shares of the Funds until September 9, 2024. To the extent there are any dividend or distribution payments made prior to the Liquidation Date with respect to the Funds, they will continue to be paid either in cash, in additional shares of the Funds, or in shares of other Goldman Sachs Funds, depending on each shareholder'​s current election, as disclosed in the Prospectuses."

It continues, "The Funds may depart from their stated investment objectives and policies as they prepare to liquidate and distribute their assets to shareholders. It is anticipated that the Funds' portfolios will be positioned into cash, cash equivalents or other liquid assets on or prior to the Liquidation Date. In connection with the liquidation, all outstanding shares of the Funds on the Liquidation Date will be automatically redeemed by the Funds. Each shareholder of record of a Fund on the Liquidation Date will receive proceeds of the automatic redemptions equal to the shareholder'​s proportionate interest in the Fund'​s net assets plus accrued and unpaid earnings of the Fund at the time of liquidation. The liquidation of a Fund'​s portfolio may result in increased transaction costs, which must be borne by the Fund and its shareholders and may result in higher capital gains for taxable shareholders. Shareholders should contact their tax advisers concerning the tax consequences of the liquidation."

Goldman writes, "At any time prior to the Liquidation Date, shareholders may redeem their shares of the Funds and receive the net asset value thereof, as provided in the Prospectuses. Shareholders of the Goldman Sachs Financial Square Prime Obligations Fund may also exchange their shares for certain shares of other Goldman Sachs Funds at net asset value without imposition of an initial sales charge. Exchanges are not permitted from or into the Goldman Sachs Financial Square Money Market Fund."

They add, "Certain shareholders may redeem all or a portion of their shares of the Funds before the Liquidation Date, and as a result the Funds and their remaining shareholders may experience adverse effects. These shareholder redemptions may also negatively impact a Fund'​s net asset value per share."

In other news, Barron'​s features a piece entitled, "Money-​Market Funds Look Like a Tempting Place for Your Cash. But Don'​t Make This Mistake." Author Allan Sloan writes, "Most of the time, money-​market mutual funds are about as exciting as watching paint dry. That'​s what they'​re designed to be: boring and reliable. But these days, money funds have gotten interesting. And tempting. Maybe overly tempting."

He explains, "​Owning these funds has become lots more lucrative since the Federal Reserve began raising short-​term interest rates two years ago. Thanks to the Fed, money-​fund yields have gone from essentially zero in early 2022 to 5%-​plus today. As a bonus of sorts for money fund holders, the significant drops in Fed rates that had been widely expected by now seem to be delayed, perhaps indefinitely.... All this means that for now ... money fund holders are getting higher yields than long-​term Treasury holders are getting."

The article states, "​All of this has attracted lots of interest -- yes, you can groan now -- from both institutional and retail investors. Money fund assets have risen by 25% from the start of last year through April 11, according to Crane Data. That $​1.​3 trillion increase has boosted money fund assets to $​6.​48 trillion. That'​s a tad lower than the record $​6.​54 trillion on April 2, which Pete Crane says is because people are taking money fund withdrawals to help pay their income tax bills."

It continues, "These days, with stocks lurching up and down, there'​s a lot of comfort and safety in money-​market funds for retail investors as well as institutional investors. Sure, money funds aren'​t exciting. But you don'​t have to deal with wild daily or weekly price lurches. That'​s why I say that money funds are tempting. It'​s easy to fall in love with reliability and predictability, given the hectic financial and political markets that we'​re dealing with. And a 5%-​plus yield is pretty nice, too. But watch out. Don'​t fall in love with your money fund."

Barron'​s says, "Sure, it'​s great to be getting a decent yield on your short-​term money after years of earning almost nothing on it. In fact ... rates were so low from the first quarter of 2020 through the first quarter of 2022 that the yield on money funds was significantly less than the dividend income of the S&​P 500.... That pattern has since reversed itself, of course. S&​P 500 and government fund incomes became almost equal two years ago, when the Fed started increasing rates, and money funds now yield about four times as much."

Finally, they comment, "It'​s really comforting to see the nice, high, reliable income from your money fund. But it'​s a mistake to consider it a permanent investment like stocks or bonds. That'​s because, among other things, someday money fund yields will fall. And over the long-​term, returns on cash have been far lower than stock market returns.... In any event, you need to be careful not to be tempted by the safe money fund returns if you have a long time horizon. It'​s one thing to earn a nice return on cash. But don'​t be tempted to treat money funds as a long-​term investment class like stocks and bonds. That would be a long-​term mistake."

​

ICI'​s latest "Money Market Fund Assets" report shows money market mutual fund assets falling sharply again to $​5.​968 trillion as April 15 tax payments hit hard. MMF assets are still up by $​82 billion, or 1.​7%, year-​to-​date in 2024 (​through 4/​17/​24), with Institutional MMFs down $​29 billion, or -​0.​9% and Retail MMFs up $​111 billion, or 6.​6%. Over the past 52 weeks, money funds have risen by $​760 billion, or 14.​6%, with Retail MMFs rising by $​507 billion (​26.​8%) and Inst MMFs rising by $​253 billion (​7.​6%).

The weekly release says, "Total money market fund assets decreased by $​112.​08 billion to $​5.​97 trillion for the week ended Wednesday, April 17, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $​98.​56 billion and prime funds decreased by $​12.​12 billion. Tax-​exempt money market funds decreased by $​1.​39 billion." ICI'​s stats show Institutional MMFs falling $​96.​6 billion and Retail MMFs dropping $​15.​5 billion in the latest week. Total Government MMF assets, including Treasury funds, were $​4.​832 trillion (​81.​0% of all money funds), while Total Prime MMFs were $​1.​014 trillion (​17.​0%). Tax Exempt MMFs totaled $​122.​9 billion (​2.​0%).

ICI explains, "Assets of retail money market funds decreased by $​15.​45 billion to $​2.​40 trillion. Among retail funds, government money market fund assets decreased by $​8.​24 billion to $​1.​54 trillion, prime money market fund assets decreased by $​5.​89 billion to $​745.​53 billion, and tax-​exempt fund assets decreased by $​1.​31 billion to $​111.​38 billion." Retail assets account for over a third of total assets, or 40.​2%, and Government Retail assets make up 64.​3% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $​96.​63 billion to $​3.​57 trillion. Among institutional funds, government money market fund assets decreased by $​90.​32 billion to $​3.​29 trillion, prime money market fund assets decreased by $​6.​23 billion to $​268.​04 billion, and tax-​exempt fund assets decreased by $​76 million to $​11.​50 billion." Institutional assets accounted for 59.​8% of all MMF assets, with Government Institutional assets making up 92.​2% of all institutional MMF totals.

According to Crane Data'​s separate Money Fund Intelligence Daily series, money fund assets have fallen by $​40.​0 billion in April (​through 4/​17) to $​6.​357 trillion (​they were a record $​6.​538 trillion on 4/​2). Assets fell $​68.​8 billion in March, but rose $​72.​1 billion in February, $​93.​9 billion in January, $​32.​7 billion in December and $​226.​4 billion in November. MMF totals fell by $​31.​9 billion in October. They rose $​93.​9 billion in September, $​98.​3 billion in August and $​34.​7 billion in July. Note that ICI'​s asset totals don'​t include a number of funds tracked by the SEC and Crane Data, so they'​re over $​400 billion lower than Crane'​s asset series.

In other news, The Wall Street Journal'​s CFO Journal writes, "Companies Belly Up to Cash Buffet, in Five Charts." The article tells us, "Companies are socking away cash at the fastest rate since the onset of the pandemic. Four years ago, companies boosted their cash holdings to weather economic uncertainty stemming from virus-​related lockdowns. Now, with interest rates hovering at two-​decade highs, they are allocating more of their portfolios to high-​yielding cash accounts and investments, getting a welcome boost from yields that top 5% on money-​market funds."

It states, "High interest rates are a boon to cash-​rich companies. What counts as cash or cash equivalents on corporate balance sheets includes cash deposits and investments with maturities of three months or less, including money-​market funds, Treasury bills and commercial paper. Separately, companies also invest in short- and long-​term securities.... Still, companies are preparing their playbooks on how they would respond to a cut, including by parking more cash in money-​market funds, where rates take weeks to adjust, bankers and advisers said."

The piece says, "At Facebook parent Meta Platforms, interest and investment income increased more than threefold in 2023, to $​1.​6 billion, compared with a year earlier. At Google parent Alphabet, the same figure increased 78% over the same period, to $​3.​9 billion. As earnings season gets under way, companies are providing details on their cash positions. Here'​s a look at how corporate cash strategies have changed since the Fed began raising rates in 2022."

It explains, "Nonfinancial companies in the S&​P 500 parked 56% of their funds in cash and cash equivalents, and the remainder in securities at the end of 2023, the highest level since the first quarter of 2020, according to JPMorgan Chase. The increase in cash allocations is largely due to companies moving cash into money-​market funds, according to Teresa Ho, managing director and head of U.​S. short duration strategy at JPMorgan. In previous rate-​cutting cycles, money-​market funds have seen inflows even after the Fed began to cut rates, because the funds adjust more slowly to rate cuts than Treasury bills do, according to Ho."

The CFO Journal writes, "Companies are parking more cash in money-​market funds, where total assets under management jumped 22% by the end of 2023 from a year earlier, to $​6.​3 trillion, according to Crane Data. By the end of this year’​s first quarter, the total had risen to $​6.​4 trillion. Money-​market investments from nonfinancial companies accounted for approximately 14% of total assets under management at the end of 2023, roughly on par with a year earlier, according to Crane. The remainder comes mostly from households, as well as governments, pension funds, insurance companies and other firms."

It adds, "Money-​market funds are attractive to companies because they'​re more liquid than CDs or other types of short-​term investments, said Peter Crane, president of the eponymous firm. '​It'​s in cash because they might need the money tomorrow,' he said. The average yield for all money-​market fund investors was 5.​12% on Tuesday, according to Crane. The average rate on interest-​bearing checking accounts in March was 3.​03%, while the average rate on money-​market deposit accounts was 3.​79%, according to Curinos. Companies have the ability to negotiate higher rates on their accounts."

​

Asset managers, brokerages and banks continue to report first-​quarter earnings, but the calls and press releases have been relatively light on money fund and "​cash sorting" comments. On the "Charles Schwab Corporation 2024 Spring Business Update Monday, CFO Peter Crawford comments, "The important point is that we sit here today a year removed from the events surrounding the regional banking crisis, we are in a very strong position with nearly all key business and financial indicators improving, in some cases substantially. We have seen meaningful progress back to historical ... organic growth, a continued moderation of client cash realignment activity with the pace slowing even faster than expectations [​and] further reduction in the use of supplemental borrowing." Schwab'​s money fund assets rose to an average of $​499.​9 billion in Q1'​24 from $​316.​4 billion a year earlier, an increase of $​183.​5 billion, or 58.​0%. Deposits fell from $​343.​1 billion a year ago to $​274.​4 billion in Q1, a decline of $​68.​7 billion, or -​20.​0%. according to their quarterly earnings release.

He tells us, "​Turning our attention to the balance sheet, total assets dropped by 5% driven by the paydown of parent level debt and the continuation of a much lower case of cash realignment [​than] we have experience roughly [​the past] two years. We saw a notable reduction in activity from January to February and March, and the overall level of realignment was more than 80% less in the same quarter in 2023. Within the bank, an amount that we could support with cash flow from the investment portfolio allowed to reduce usage of borrowing by $​9 billion during the quarter, bringing the total down roughly $​25 billion from the peak of last May."

Crawford continues, "During last quarter'​s update, we talked about the slowing pace of the client cash realignment. But we also shared our expectation that we likely see typical seasonal activity to start the year. That indeed has been the case, and clients continue to engage in the market and the number of ... those realignment events continues to trend lower, bringing us ever closer to the point where any residual activity among existing clients will be offset from the contribution of cash from new accounts, and making the client cash realignment a story [​that] soon will move to the back pages."

He also says, "​Now, if we turn our attention from the solid quarter we just completed to what we expect to be a very bright future, we expect our net interest margin to expand through 2024 and 2025 and approach 3% by the end of 2025, due to mostly the paydown of supplemental borrowing. The actual paying off will be influenced by the level of deposit growth, but also by the growth of margin balances. Why is that? Given the way the liquidity ratio where LCR will work for every dollar of March and balance growth, we need extra $​1.​50 of client cash of the broker-​dealers. That requires us to reroute some client cash balances from bank’​s sweep to the broker-​dealer solution.... Those are balances that we otherwise used to pay down supplemental borrowing."

During the Q&​A, Crawford is asked about paying down debt. He responds, "Certainly, our priority is to pay down the amount of borrowing, CDs, as quickly as we possibly can.... The pace of payment is really driven by ... both the levels of transactional cash that we see as well as the mix of transactional cash between the bank and the broker-​dealer. We will do it as quickly as we can to the extent that we see ... greater contributions from new accounts and greater level of deposit growth that will accelerate that."

Asked if new accounts are choosing money funds over bank deposits, he answers, "​I would say that we look at the new accounts and they tend to over time look a lot like the existing accounts. They come in with a heavier portion of cash but we are seeing newer accounts realigning ahead of bringing that money ... to Schwab. One is we saw last quarter, for example, or transfer of accounts colors were actually higher portion of our net new assets than last year. That is a good thing. That means we are winning business from competitors, clients are trusting us and choosing to ship more of their business to Schwab versus competitors."

He adds, "But that also means that new assets are coming in the form of securities and mutual funds, etc.... Our expectation, of course, we will see the realignment among the existing clients continue to moderate, not necessarily go to zero, but moderate and get offset by growth from contribution of cash into accounts over time here, ... and see a resumption of positive growth and over time, transactional cash will grow with the growth and accounts and the growth over total assets."

Another analyst states, "You guys have about $​350 billion more money market balances today than you did at the beginning of 2022 when the Fed policy shifted. [​With lower rates] how sticky are the balances and do you think [​they] might flow out ... over time?" Crawford answers, "​You are right, balances certainly a lot higher than a few years ago and obviously higher than zero interest rate environment. To the extent that money ... is flowing out of money funds into the equity markets and mutual funds, etc., it depends on what the vehicle is. `​If it is flowing out of money funds into our cash balance sheet, clearly that is a positive for us from a revenue standpoint. But [​with] our expectations of interest rates ... you would see over time a little bit of a shift in the proportion of cash sitting in those transactional cash solutions like banks reap the broker-​dealer deal cash solutions with money fund. It will not happen immediately.... Where you see much more dramatic would be of course if rates fall back to levels we saw in 2020 and 2021. That tends to be the period of time where you see much more significant reductions."

Also, earlier this month on BlackRock'​s latest earnings release and earnings call, CFO Martin Small tells us, "Our cash business can experience seasonal rotations in the first quarter as many institutional clients withdraw these liquid assets for operational purposes, including tax and bonus payments. Cash management flows were impacted by approximately $​14 billion of net redemptions during the last week of March ahead of the Good Friday holiday. Outflows were driven by clients redeeming balances to have cash on hand during a time when many businesses are open, but the financial markets are closed. This phenomenon is not uncommon or unique to BlackRock. Balance has largely returned with approximately $​20 billion of money market net inflows in the first week of April."

CEO Larry Fink comments, "As Martin said, we generated $​76 billion of long-​term net flows in the first quarter, which represents nearly 40% of last year'​s long-​term flows in just the first three months of this year. And long-​term net inflows across retail and ETFs and institutional active was actually $​100 billion, which excludes the episodic institutional equity activity Martin mentioned. Some of these are public, some aren'​t, but over the last few months, we'​ve been chosen for a breadth of mandate, both wealth and institutional clients across regions that will fund over future quarters and we'​re in active conversations on a number of unique broad-​based opportunities, including several large mandates for Aladdin."

He explains, "There is still a record amount of cash on the sidelines and money market fund balances are now approaching $​9 trillion [​sic]. I think this stems from fear and uncertainty, but it'​s hard to achieve retirement or long-​dated objectives by holding cash. Clients worldwide are coming to BlackRock for advice on where and how to deploy their capital, and in many ways, how to help them reduce that fear and putting that money to work. Being a growth company requires continued innovation, lots of investments, and intense client focus. BlackRock has invested ahead of these themes, we believe will define the next decade of asset management."

During the Q&​A session, JP Morgan'​s Ken Worthington queries, "Fixed income flows have picked up for U.​S. -- the U.​S. mutual fund industry so far this year, but the same data services that track the industry don'​t show a proportionate pickup for BlackRock. Your fixed-​income ETF sales were solid at $​18 billion, but below levels seen last year. Can you talk about the competitive landscape for fixed-​income retail and fixed-​income ETFs, both inside and outside the U.​S.? And to what extent do you think investor appetite may have changed in 2024?"

President Rob Kapito responds, "The conversations that we'​re having across all of the distribution systems are about a new allocation into fixed income. It'​s been very much clouded by all the noise around inflation and the Fed. So the yield curve remains inverted and investors are currently getting paid to wait. And a more balanced term structure of interest rates is going to be the indicator to watch, and that'​s where we'​ll start to see demand for intermediate and longer-​term fixed income. So the first quarter ... flows of $​42 billion, ... we saw the strength in the bond ETFs from immunization activity in institutional and about 25% of the flows were into active strategies. So we'​re seeing renewed demand for active fixed income and that'​s led to flows into the high yield, the unconstrained, and the total return strategies."

He adds, "But I do think the noise that'​s out there focused on inflation and the fact that you can still earn 5%, which is very attractive right now is causing the delay in more allocations to fixed income. The other part of why I'​m more encouraged is we are finding a growing interest in high-​performing active fixed-​income strategies alongside private market strategies. So I think that we stand to bode very well once you see some changes in the yield curve." See BlackRock'​s Q1 2024 Earnings Call Transcript here.)

​

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 April 12) includes Holdings information from 70 money funds (​up 9 from two weeks ago), or $​3.​129 trillion (​up from $​2.​941 trillion) of the $​6.​407 trillion in total money fund assets (​or 48.​8%) tracked by Crane Data. (​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 April 10 News, "April Money Fund Portfolio Holdings: Repo Rises, Treasuries, TDs Fall.")

Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $​1.​450 trillion (​up from $​1.​432 trillion two weeks ago), or 46.​4%; Repurchase Agreements (​Repo) totaling $​1.​146 trillion (​up from $​1.​017 trillion two weeks ago), or 36.​6%, and Government Agency securities totaling $​272.​8 billion (​up from $​251.​1 billion), or 8.​7%. Commercial Paper (​CP) totaled $​91.​3 billion (​down from two weeks ago at $​92.​0 billion), or 2.​9%. Certificates of Deposit (​CDs) totaled $​70.​3 billion (​up from $​69.​6 billion two weeks ago), or 2.​2%. The Other category accounted for $​66.​3 billion or 2.​1%, while VRDNs accounted for $​31.​6 billion, or 1.​0%.

The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $​1.​450 trillion (​46.​4% of total holdings), Fixed Income Clearing Corp with $​260.​6B (​8.​3%), Federal Home Loan Bank with $​206.​1B (​6.​6%), the Federal Reserve Bank of New York with $​115.​6 billion (​3.​7%), BNP Paribas with $​81.​7B (​2.​6%), RBC with $​76.​6B (​2.​4%), JP Morgan with $​75.​4B (​2.​4%), Citi with $​72.​6B (​2.​3%), Federal Farm Credit Bank with $​63.​7B (​2.​0%) and Bank of America with $​49.​2B (​1.​6%).

The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($​249.​0B), Goldman Sachs FS Govt ($​223.​6B), JPMorgan 100% US Treas MMkt ($​199.​3B), Fidelity Inv MM: Govt Port ($​197.​8B), Morgan Stanley Inst Liq Govt ($​142.​8B), BlackRock Lq FedFund ($​142.​3B), State Street Inst US Govt ($​138.​3B), Fidelity Inv MM: MM Port ($​126.​0B), BlackRock Lq Treas Tr ($​114.​0B) and Allspring Govt MM ($​113.​0B). (​Let us know if you'​d like to see our latest domestic U.​S. and/​or "​offshore" Weekly Portfolio Holdings collection and summary.)

In related news, J.​P. Morgan published "March MMF holdings update: shifting into reverse," which states, "March generally saw MMF AUMs rise further, though they dropped considerably at month-​end due to the Good Friday holiday. As in prior years, corporates tend to pull cash out of MMFs in the day leading up to Good Friday (​given that it'​s a holiday in the bond markets but not elsewhere) and redeposit the proceeds the day after. Indeed, cash flowed back into MMFs on April 1 and 2, when AUMs reached a new high of $​6.​41tn, a $​238bn increase YTD."

It continues, "In any case, government MMFs ended the month down by more than $​70bn from February. The quarter-​end gave way to a $​97bn drop in their Treasury and Agency repo, a $​71bn drop in their bill holdings, and a $​77bn increase in their RRP balances.... This shift is not surprising -- even as total bill outstandings rose by $​52bn in March, it seems many funds reached their capacity for bill absorption, as a majority of MMFs sat at WAMs of above 35d and held under $​15bn in RRP in March, with some funds decreasing their WAMs since February-​end."

JPM explains, "To that effect, growing uncertainty on the path of monetary policy might have inspired a degree of portfolio shortening. Indeed, government funds reduced bill holdings in the >​2m space (-$​141bn) but increased holdings of bills maturing within 30 days by $​66bn month-​over-​month.... Furthermore, looking at how WAMs behaved during the peaks of historical hiking cycles, government WAMs might not extend beyond their February-​end highs of 38 days in the near term; in fact, they'​ve come back down to about 35 days as of 4/​11/​24.... We'​re unlikely to see WAMs meaningfully surpass these levels until the Fed signals that rate cuts are imminent."

They write, "On the prime fund side, AUMs were relatively stable month-​over-​month as funds shifted out of CDs and TD and into repo and Treasuries, though they only picked up about $​14bn in T-​bills (​versus $​50bn in February and January). Somewhat notably, they kept their Fed ON RRP balances relatively steady. Institutional prime funds in particular have been gradually increasing their WLA (​weekly liquid assets) over the course of this year, now averaging 73%. This shift to more liquid portfolios can be attributed to MMF reform deadlines, with the new 25%/​50% DLA/​WLA threshold requirements having come into effect earlier this month and with uncertainty over potential outflows as the new liquidity fee framework comes into play in October."

The piece adds, "The Fed'​s ON RRP balance in total rose to $​594bn on 3/​28, a $​92bn step up from where it ended in February.... Paired with the fact that balances largely remained within the $​400-​500bn range over March, never falling below $​410bn, it is clear balances are keeping sticky as MMF bill pickup has waned/​reversed and as Fed uncertainty has lingered. In April, with net bill issuance turning negative, it is likely MMFs T-​bill holdings will continue to come down. And considering that headline and core CPI each came in above expectations at +​0.​4% for March ..., which led markets to push back rate cut expectations, MMF portfolio shortening could likely be a continued theme this month, and RRP balances should stay elevated in the near term."

Finally, money fund yields fell to 5.​12% on average (​as measured by our Crane 100 Money Fund Index) in the week ended April 12, after going unchanged two weeks prior. Our Crane 100 is an average of 7-​day yields for the 100 largest taxable money funds. Yields were 5.​14% on 3/​31 and 2/​29/​24, 5.​17% on 1/​31/​24, 5.​20% on 12/​31/​23, 4.​94% on 6/​30/​23, 4.​61% on 3/​31/​23 and 4.​05% on 12/​31/​22. The vast majority of money market fund assets now yield 5.​0% or higher. Assets of money market funds fell by $​98.​3 billion last week to $​6.​407 trillion according to Crane Data'​s Money Fund Intelligence Daily. Weighted average maturities were unchanged last week.

The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (​currently 712), shows a 7-​day yield of 5.​02%, down 2 bps in the week through Friday. Prime Inst MFs were down 2 bps at 5.​22% in the latest week. Government Inst MFs were down 2 bps at 5.​10%. Treasury Inst MFs were down 2 bps at 5.​05%. Treasury Retail MFs currently yield 4.​84%, Government Retail MFs yield 4.​82%, and Prime Retail MFs yield 5.​03%, Tax-​exempt MF 7-​day yields were up 1 bp at 3.​22%.

According to Monday'​s Money Fund Intelligence Daily, with data as of Friday (​4/​12), 19 money funds (​out of 833 total) yield under 3.​0% with $​1.​2 billion in assets, or 0.​0%; 106 funds yield between 3.​00% and 3.​99% ($​129.​4 billion, or 2.​0%), 255 funds yield between 4.​0% and 4.​99% ($​1.​333 trillion, or 20.​8%) and 453 funds now yield 5.​0% or more ($​4.​944 trillion, or 77.​2%).

Our Brokerage Sweep Intelligence Index, an average of FDIC-​insured cash options from major brokerages, was unchanged at 0.​61%. The latest Brokerage Sweep Intelligence, with data as of Apr. 12, shows that there was no changes over the past week. Three of the 11 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.

​

The Federal Reserve Bank of New York'​s Liberty Street Economics blog recently featured the article, "Monetary Policy and Money Market Funds in Europe." It states, "As shown in a past Liberty Street Economics post, in the United States, the yields of money market fund (​MMF) shares respond to changes in monetary policy rates much more than the rates of bank deposits; in other words, the MMF beta is much higher than the deposit beta. Consistent with this, the size of the U.​S. MMF industry fluctuates over the interest rate cycle, expanding during times of monetary policy tightening. In this post, we show that the relationship between the policy rates of the European Central Bank (​ECB) and the size of European MMFs investing in euro-​denominated securities is also positive -- as long as policy rates are positive; after the ECB introduced negative policy rates in 2015, that relationship broke down, as MMFs received large inflows during this period."

The piece explains, "MMFs are a type of open-​end mutual fund that invest in short-​term money-​market instruments with low credit risk. Due to the nature of their investments, MMFs are money-​like instruments that provide investors with returns close to current money-​market rates. Similar to their U.​S. counterparts, European MMFs can be divided into government funds (​usually called '​public debt funds') and prime funds based on their portfolio holdings: government MMFs mainly invest in debt securities issued by the public sector or repurchase agreements (​repos) collateralized by such securities, whereas prime MMFs can also invest in uncollateralized debt securities issued by the private sector. European MMFs are regulated under Regulation (​EU) 2017/​1131 of the European Parliament and of the Council of the European Union (​EU), which was adopted in 2017 in response to the 2008 run experienced by MMFs.

It tells us, "​In this post, we focus on 'euro-​denominated MMFs' -- that is, European MMFs investing in euro-​denominated securities. The size of this industry is much smaller than its U.​S. equivalent: in July 2023, euro-​denominated MMFs managed $​0.​72 trillion (€​0.​65 trillion) in assets; in comparison, U.​S. MMFs managed $​6 trillion (€​5.​4 trillion). The composition of the industry is also different: euro-​denominated MMFs are mainly prime funds with variable net asset value (​NAV), with government funds (​operating with a constant NAV) representing less than 1 percent of the industry; in contrast, in the U.​S., government MMFs make up 78 percent of the industry."

The blog says, "As in the U.​S. market, the beta of euro-​denominated MMFs is much higher than that of EU bank deposits; in other words, MMF yields track the policy rate more closely than bank deposit rates do.... [​O]​vernight EU deposit rates move slowly, with a low beta, similar to what we observe for U.​S. deposits: in particular, the EU deposit rate increased by just 1 percentage point (​pp) during 2006-​07, whereas the ECB'​s DFR was raised by 1.​5 pp during the same period. During the latest tightening cycle, the difference has been even more stark: while the DFR was raised by 4 pp during 2022-​23, the deposit rate increased by 0.​6 pp during the same period."

It continues, "​Moreover, whereas the DFR reached negative territory in June 2014, the deposit rate only went below zero in 2021. In contrast, the average yield of euro-​denominated MMFs follows the DFR much more tightly, increasing sharply during the brief hiking cycle in 2011 as well as in the latest hiking cycle initiated in 2022. Indeed, the yield on MMF shares becomes negative in December 2015, following the ECB'​s adoption of a negative interest rate policy in June 2014. In other words, despite the delayed arrival of negative MMF yields, the beta on euro-​denominated MMFs is much higher than that on bank deposits, similar to the U.​S. experience."

The NY Fed also says, "As documented in a past post, the size of the U.​S. MMF industry moves together with the monetary policy cycle. When rates increase, U.​S. MMFs grow in size, and then shrink when the Federal Reserve eases monetary policy. This pattern was evident during the cycle, for example: the assets managed by U.​S. MMFs increased by $​1 trillion between 2022:​Q2 and 2023:​Q3, reaching over $​6 trillion. The positive relationship between the Fed'​s monetary policy stance and the size of the MMF industry is consistent with investors leaving bank deposits for MMF shares because of their significantly higher beta in a rising rate environment."

They write, "A similar positive relationship existed between the ECB'​s policy stance and the size of euro-​denominated MMFs during the tightening-​and-​easing cycles of 2006-​12.... [​D]​espite policy rates falling into negative territory, European MMFs received substantial inflows from 2015 onwards. This is in stark contrast to the usual positive relationship between interest rates and the size of the MMF sector. The growth in MMF assets was particularly driven by institutional-​oriented MMFs, which grew by €​43 billion (​34 percent) between June 2014 and June 2016 -- compared to an increase of €​27 billion (​14 percent) for retail-​oriented MMFs. As the ECB further cut interest rates in September 2019, MMFs continued to experience significant inflows, despite providing negative yields."

The article comments, "One reason for the behavior of institutional investors might have been the relative attractiveness of MMF yields compared to other wholesale money-​market rates available to institutional investors. For example, the Euro Overnight Index Average (​EONIA) and the Euro Short-​Term Rate (€​STR), which measure the cost of wholesale unsecured overnight borrowing in euros for banks located in the euro area, were even lower than the yields offered by euro-​denominated MMFs during the period of negative rates."

It adds, "In other words, in contrast to retail deposit rates, rates offered to institutional investors continue to closely follow the policy rate once it turns negative, and MMF yields can remain attractive relative to them. The size of the euro-​denominated MMF industry stabilized in 2021, hovering around €​570 billion. The usual positive relationship between policy rates and MMF flows re-​emerged after the onset of the ECB'​s latest hiking cycle in July 2022. Between June 2022 and August 2023, euro denominated MMFs grew by more than €​100 billion, reflecting both the higher policy rate and the particular attractiveness of short-​term investment vehicles in an inverted yield curve environment."

Finally, the blog summarizes, "This post documents that, similar to the general pattern in the United States, the yields on European MMF shares display a much tighter relationship with monetary policy compared to bank deposit rates. In line with the observations in the U.​S. market, such a high beta on MMF shares implies that the size of the European MMF industry usually increases when policy rates increase. During the introduction of negative policy rates, however, this positive relationship broke down: negative rates were associated with inflows into euro-​denominated MMFs, as MMF yields remained competitive with respect to other short-​term investment vehicles offered to institutional investors. During the ECB'​s recent tightening cycle, the positive relationship between the ECB'​s monetary policy stance and the size of the euro-​denominated MMF sector re-​emerged."

​

Crane Data'​s latest Money Fund Intelligence International shows that assets in European or "​offshore" money market mutual funds moved higher again over the past 30 days to a record $​1.​258 trillion, while yields were mostly flat. Assets for USD, EUR & GBP MMFs all rose over the past month. Like U.​S. money fund assets, European MMFs have repeatedly hit record highs in 2023 and 2024. These U.​S.-​style money funds, domiciled in Ireland or Luxembourg and denominated in US Dollars, Pound Sterling and Euros, increased by $​15.​6 billion over the 30 days through 4/​11. The totals are up $​60.​8 billion (​5.​1%) year-​to-​date for 2024, they were up $​166.​9 billion (​16.​2%) for the year 2023. (​Note that currency moves in the U.​S. dollar cause Euro and Sterling totals to shift when they'​re translated back into totals in U.​S. dollars. See our latest MFI International for more on the "​offshore" money fund marketplace. These funds are only available to qualified, non-​U.​S. investors and are almost entirely institutional.) (Note too: For those attending TEXPO 2024, the Texas Treasury & Financial conference, April 14-​16 in Houston, stop by Booth #​504 to say "Howdy" to Crane Data!)

Offshore US Dollar money funds increased $​7.​8 billion over the last 30 days and are up $​22.​0 billion YTD to $​671.​5 billion; they increased $​100.​0 billion in 2023. Euro funds increased E3.​9 billion over the past month. YTD, they'​re up E18.​0 billion to E253.​0 billion, for 2023, they increased by E54.​5 billion. GBP money funds increased L2.​9 billion over 30 days, and they'​re up L13.​3 billion YTD at L248.​7B, for 2023, they fell L28.​1 billion. U.​S. Dollar (​USD) money funds (​211) account for over half (​53.​4%) of the "​European" money fund total, while Euro (​EUR) money funds (​119) make up 21.​7% and Pound Sterling (​GBP) funds (​142) total 25.​0%. We summarize our latest "​offshore" money fund statistics and our Money Fund Intelligence International Portfolio Holdings (​which went out to subscribers Friday), below.

Offshore USD MMFs yield 5.​24 (​7-​Day) on average (​as of 4/​11/​24), down 1 bp from a month earlier. Yields averaged 4.​20% on 12/​30/​22, 0.​03% on 12/​31/​21, 0.​05% on 12/​31/​20, 1.​59% on 12/​31/​19 and 2.​29% on 12/​31/​18. EUR MMFs finally left negative yield territory in the second half of 2022 but they should remain flat until the ECB moves rates again. They'​re yielding 3.​85% on average, down 1 bp from a month ago and up from 1.​48% on 12/​30/​22, -​0.​80% on 12/​31/​21, -​0.​71% at year-​end 2020, -​0.​59% at year-​end 2019 and -​0.​49% at year-​end 2018. Meanwhile, GBP MMFs broke the 5.​0% barrier 9 months ago and now yield 5.​16%, down 2 bps from a month ago, and up from 3.​17% on 12/​30/​22. Sterling yields were 0.​01% on 12/​31/​21, 0.​00% on 12/​31/​20, 0.​64% on 12/​31/​19 and 0.​64% on 12/​31/​18.

Crane'​s April MFI International Portfolio Holdings, with data as of 3/​31/​24, show that European-​domiciled US Dollar MMFs, on average, consist of 26% in Commercial Paper (​CP), 16% in Certificates of Deposit (​CDs), 21% in Repo, 25% in Treasury securities, 11% in Other securities (​primarily Time Deposits) and 1% in Government Agency securities. USD funds have on average 39.​0% of their portfolios maturing Overnight, 11.​3% maturing in 2-​7 Days, 10.​3% maturing in 8-​30 Days, 11.​7% maturing in 31-​60 Days, 7.​0% maturing in 61-​90 Days, 12.​3% maturing in 91-​180 Days and 8.​3% maturing beyond 181 Days. USD holdings are affiliated with the following countries: the US (​41.​4%), France (​11.​8%), Canada (​9.​2%), Japan (​8.​1%), Sweden (​5.​2%), the Netherlands (​4.​8%), the U.​K. (​3.​8%), Germany (​3.​1%), Australia (​3.​1%), and Belgium (​1.​9%).

The 10 Largest Issuers to "​offshore" USD money funds include: the US Treasury with $​166.​5 billion (​24.​7% of total assets), Fixed Income Clearing Corp with $​31.​1B (​4.​6%), BNP Paribas with $​18.​3B (​2.​7%), RBC with $​17.​1B (​2.​5%), Credit Agricole with $​16.​0B (​2.​4%), JP Morgan with $​15.​6B (​2.​3%), Toronto-​Dominion Bank with $​12.​5B (​1.​9%), Skandinaviska Enskilda Banken AB with $​12.​4B (​1.​8%), Mizuho Corporate Bank Ltd with $​12.​1B (​1.​8%), and Nordea Bank with $​12.​0B (​1.​8%).

Euro MMFs tracked by Crane Data contain, on average 47% in CP, 20% in CDs, 19% in Other (​primarily Time Deposits), 13% in Repo, 1% in Treasuries and 0% in Agency securities. EUR funds have on average 40.​3% of their portfolios maturing Overnight, 9.​4% maturing in 2-​7 Days, 16.​8% maturing in 8-​30 Days, 9.​0% maturing in 31-​60 Days, 7.​2% maturing in 61-​90 Days, 9.​6% maturing in 91-​180 Days and 7.​7% maturing beyond 181 Days. EUR MMF holdings are affiliated with the following countries: France (​31.​0%), Japan (​12.​6%), the U.​S. (​8.​0%), Germany (​7.​2%), Canada (​6.​6%), the U.​K. (​6.​4%), the Netherlands (​6.​0%), Austria (​4.​6%), Sweden (​4.​1%), and Belgium (​3.​1%).

The 10 Largest Issuers to "​offshore" EUR money funds include: Credit Agricole with E13.​2B (​6.​1%), BNP Paribas with E13.​1B (​6.​1%), Societe Generale with E8.​3B (​3.​8%), Credit Mutuel with E7.​9B (​3.​6%), Mitsubishi UFJ Financial Group Inc with E7.​5B (​3.​5%), BPCE SA with E7.​3B (​3.​4%), Republic of France with E6.​9B (​3.​2%), Erste Group Bank AG with E6.​8B (​3.​2%), Landesbank Baden-​Wurttemberg with E6.​6B (​3.​1%), and JP Morgan with E6.​3B (​2.​9%).

The GBP funds tracked by MFI International contain, on average (​as of 3/​31/​24): 39% in CDs, 19% in CP, 21% in Other (​Time Deposits), 17% in Repo, 3% in Treasury and 1% in Agency. Sterling funds have on average 35.​8% of their portfolios maturing Overnight, 7.​8% maturing in 2-​7 Days, 9.​3% maturing in 8-​30 Days, 12.​1% maturing in 31-​60 Days, 10.​5% maturing in 61-​90 Days, 17.​2% maturing in 91-​180 Days and 7.​2% maturing beyond 181 Days. GBP MMF holdings are affiliated with the following countries: France (​17.​6%), the U.​K. (​15.​4%), Japan (​14.​5%), Canada (​14.​1%), the U.​S. (​9.​5%), Australia (​7.​8%), Sweden (​4.​2%), the Netherlands (​3.​4%), Singapore (​2.​7%) and Abu Dhabi (​2.​0%).

The 10 Largest Issuers to "​offshore" GBP money funds include: UK Treasury with L16.​3B (​7.​9%), BNP Paribas with L9.​2B (​4.​5%), Toronto-​Dominion Bank with L9.​1B (​4.​4%), Sumitomo Mitsui Banking Corp with L7.​4B (​3.​6%), JP Morgan with L7.​3B (​3.​5%), RBC with L7.​0B (​3.​4%), Mitsubishi UFJ Financial Group Inc with L6.​8B (​3.​3%), Credit Agricole with L6.​7B (​3.​3%), Mizuho Corporate Bank Ltd with L6.​3B (​3.​1%), and National Australia Bank Ltd with L6.​2B (​3.​0%).

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The April issue of our Bond Fund Intelligence, which will be sent to subscribers Friday morning, features the stories, "Worldwide BF Assets Jump to $​12.​9 Trillion, Led by U.​S," which ICI'​s latest collection of global bond fund marketplace statistics and "Bond Fund Symposium '​24: Spreads Tight, Yield Attractive," which quotes from our recent fixed-​income fund conference. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns jumped in March while yields were mixed. We excerpt from the new issue below. (Contact us if you'​d like to see our latest Bond Fund Intelligence and BFI XLS spreadsheet, or our Bond Fund Portfolio Holdings data.)

Our "Worldwide BF" piece states, "Bond fund assets worldwide increased in the latest quarter to $​12.​9 trillion, led higher by four of the largest bond fund markets -- the U.​S., Luxembourg, Ireland and China. We review the ICI'​s 'Worldwide Open-​End Fund Assets and Flows, Fourth Quarter 2023' release and statistics below."

The piece continues, "​ICI'​s report says, 'Worldwide regulated open-​end fund assets increased 8.​6 percent to $​68.​85 trillion at the end of the fourth quarter of 2023.... The Investment Company Institute compiles worldwide regulated open-​end fund statistics on behalf of the International Investment Funds Association (​IIFA).'"

Our "Symposium" article states, "​We recently hosted our latest Crane'​s Bond Fund Symposium in Philadelphia. Below, we quote from the 'Long-​Term & Core Bond Fund Issues,' which featured Invesco'​s Matthew Brill, J.​P. Morgan A.​M.'​s Priya Misra and Ramirez A.​M.'​s Samuel Ramirez, Jr. (​Thanks to those who supported BFS. Crane Data subscribers may access the recordings and conference materials at the bottom of our 'Content' page or via our 'Bond Fund Symposium 2024 Download Center.')"

It states: "​Asked about the biggest issues for core bond funds, Brill comments, 'The landscape out the curve is probably similar to what you see on the front end. [​E]​ssentially, it'​s a question of what matters more. Is it spread or is it yield? So that'​s the dynamic that we are dealing with every day.... [​W]​e'​ve been overweight corporate credit. We think there'​s some attractive value there. We'​ve been trying to tell people: '​step out the curve.' If you like six months, you’​ve got to like six years. That'​s been our motto for almost a year now, and it'​s been ... well-​received.'"

Our first News brief, "Returns Higher, Yields Mixed in March," says, "Bond fund returns rose after falling in February, while yields rose slightly last month. Our BFI Total Index rose 0.​57% over 1-​month and 4.​73% over 12 months. The BFI 100 increased 0.​22% in March and 4.​07% over 12 mos. Our BFI Conservative Ultra-​Short Index was up 0.​42% over 1-​month and 5.​64% for 1-​year; Ultra-​Shorts rose 0.​49% and 6.​13%. Short-​Term gained 0.​50% and 4.​78%, and Intm-​Term fell 0.​20% in March but rose 2.​69% over 1-​year. BFI'​s Long-​Term Index fell 0.​46% but rose 2.​51%. High Yield rose 0.​87% in March and 9.​80% over 12 months."

A second News brief, "Morningstar on 'How the Largest Bond Funds Did Last Quarter," states, "With Federal Reserve interest rate cuts pushed to later in 2024, the first quarter was mixed for the largest bond funds. The funds with the greatest sensitivity to changes in interest rates lost ground as bond prices fell in response to expectations that the Fed would hold rates higher for longer. However, funds that emphasized corporate bonds and other corners of the credit markets benefitted from the economy'​s continued strength. For investors in the most widely held funds, returns were often subpar."

Our next News brief, "ICI Expense Survey: BFs Average 0.​37%," explains, "​ICI published the release, 'Mutual Fund Expense Ratios Have Declined Substantially over the Past 27 Years,' along with the report, 'Trends in the Expenses and Fees of Funds, 2023.' The full report tells us, 'On an asset-​weighted basis, average expense ratios incurred by mutual fund investors have fallen substantially over the past 27 years. From 1996 to 2023, average equity mutual fund expense ratios dropped by 60% and average bond mutual fund expense ratios dropped by 56%.... The average expense ratio for index bond ETFs remained unchanged at 0.​11% in 2023.... Average expense ratios of hybrid and bond mutual funds, as well as money market funds, have also declined meaningfully since 1996.' A table, shows bond fund averages falling from 0.​84% to 0.​37% from 1996 through 2023."

A BFI sidebar, "MStar on Core Bond Funds," says, "Morningstar writes on the '5 Top-​Performing Core Bond Funds.' They state, 'Bond fund investors continue to experience a seesaw market. After a rally in late 2023, 2024 has started on a sour note, with many funds posting losses. Still, their declines are minor compared with 2022′​s record-​setting ones.'"

Finally, another sidebar, "Barron'​s on 5 Funds for Cuts" comments, "Barron'​s lists, ‘5 Funds to Prepare for Fed Rate Cuts, Whenever the Time Comes.' The article says, 'Short-​term yields are now in the 5% range, drawing many fund investors to the front end of the yield curve. Money-​market fund assets recently totaled about $​6.​5 trillion, continuing their strong growth, according to Crane Data. Nevertheless, it'​s a good time to consider funds that hold longer-​term bonds as a way to diversify, position for an eventual Federal Reserve rate cut, and even gird against a recession.'"

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With just two months to go, preparations are fully underway for Crane Data'​s big show, Money Fund Symposium. Money Fund Symposium 2024 is scheduled for June 12-​14, 2024 at The Westin Pittsburgh, in Pittsburgh, Pa, and we'​re expecting a record crowd of over 600. The latest agenda for the largest gathering of money market fund managers and cash investors in the world is available and registrations are still being taken. Money Fund Symposium attracts money fund managers, marketers and servicers, cash investors, money market securities dealers, issuers, and regulators. Visit the Money Fund Symposium website at www.​moneyfundsymposium.​com for more information. Registration is $​1,​000, and discounted hotel reservations are available. We hope you'​ll join us in Pittsburgh in June! We review our latest conference information, as well as our upcoming April Treasury show travel schedule (​including TEXPO and NEAFP), below.

We'​re also making plans for our next European Money Fund Symposium, which is scheduled for Sept. 19-​20, 2024, in London, England. Our 2023 event in Edinburgh, Scotland attracted a record 166 attendees, so we expect our 2024 event to be even bigger. Watch for the draft agenda to be posted in coming weeks and registration ($​1000 to attend) is now live. European Money Fund Symposium offers "​offshore" money fund portfolio managers, and money market investors, issuers, dealers and service providers a concentrated and affordable educational experience, as well as an excellent and informal networking venue.

Mark your calendars too for our next Money Fund University "​basic training" event, scheduled for Dec. 19-​20, 2024, in Providence, R.​I, and for next year'​s Bond Fund Symposium conference, which is scheduled for March 27-​28, 2025, in Newport Beach, Calif. Let us know if you'​d like more details on any of our events, and we hope to see you in Pittsburgh in June, in London in September, in Providence in December or in Newport Beach next March!

Crane Data will be exhibiting at a couple of upcoming regional treasury events, including TEXPO 2024 in Houston, which starts Sunday (​4/​14) and runs through April 16, and New England AFP, which takes place April 25-​26 in Boston. We hope to see some of you at these shows, and we review some of the sessions involving money market funds and cash investing, below.

The TEXPO agenda includes presentations entitled, "Regulatory, Rate and Regime Changes: A Perfect Storm for Liquidity Investors?" with Jeff Jones of Twisted X, Wes Rager of Invesco, and Brittany O'​Shea of Texas Capital; "Don'​t Just Set It and Forget it. Investing Public Funds Across Texas: Austin, Dallas, Houston, and San Antonio" with Laurel Eagan Kenny of Turningpoint Communications, Jenny Kerzman of the City Controller'​s Office, City of Dallas, Vernon Middleton D Lewis of the City of Houston Treasury Department, Debbie Fleming of the City of Austin, Texas and Brett Sekula of the City of San Antonio, Texas; "Safety? Liquidity? Yield? Best Practices for Today'​s Corporate Cash Investor" with Sara Flour of RBC Global Asset Management; "Asset Allocation, Manage the Balance Between Risk and Return" with Will Goldthwait of State Street Global Advisors and Lina Arikat of ExxonMobil; "Managing Cash on the Peak of Mount Rates" with Patrick O'​Callaghan of Goldman Sachs and Justin Sims of ConocoPhillips; and, "Cash Optimization to Improve Return on Latent Cash" with Daniel O'​Brien of Morgan Stanley and Wade Olsen of Treasury Suite.

The New England AFP Annual Conference agenda includes sessions entitled, "Managing Cash on the Peak of Mount Rates" with Jamie Cortas of Dell and Larry Walsh and Anuj Bhatia of Goldman Sachs; "Strategies to Managing Liquidity and Investments in Today'​s Environment" with Sherry Bruno of the Enstar Group, John Paris of Gilbane Building Co., and Anisha Gulati and Sean Colman of Bank of America; "Stairway to Seven Trillion: Why Money Markets Should Stay Hot Even as Rates Move Lower with Peter Crane of Crane Data and Susan Hill of Federated Hermes; "Investing Short-​term Funds for the Long-​term in Today'​s Interest Rate Environment" with Seth Roman of Longfellow Investment Management; and, "Managing Liquidity and Short-​Term Investments through the Cycle" with Matthew Jones of Western Asset Management.

In other news, Financial-​Planning.​com recently published an article titled, "Why cash is still king -- even with Fed cuts looming." They write, "As investors and financial advisors wait on the Fed to slash interest rates three times this year, experts say cash assets represent an attractive and often under-​discussed opportunity. Rising interest rates have pushed the average yield on money markets and other cash-​equivalent funds above 5.​1%, according to research firm Crane Data, the publisher of the 'Money Fund Intelligence' report."

The piece states, "Those returns remain much higher than the infinitesimal gains for clients in so-​called sweep accounts that automatically generate big profits for many large wealth management firms on customer cash holdings, as well as the paltry yields on trillions of dollars in savings and checking accounts at the massive giants of the banking world. Last year'​s banking crisis also highlighted how diversification of cash holdings can provide more Federal Deposit Insurance Corporation protection in the event of an institution'​s failure."

It continues, "To be sure, many investors are heeding those factors: Last year, assets in money-​market funds jumped 22% to $​6.​36 trillion, according to the Fed. However, more potential landing spots for cash assets are hitting the market almost every day. Available research indicates that advisors may not be aware of the amount of clients' holdings in non-​yielding accounts, suggesting that they could bring up the topic much more in client conversations. In addition, the Fed cuts expected to begin in June or July could open more windows for shifts in portfolios, depending on whether clients need access to cash for liquidity or see a chance for higher yield."

Financial Planning quotes Ben Cruikshank, president of Flourish, "The vast majority of our deposits are still coming from checking accounts from large money- center banks that pay virtually zero. That can be a little hard at times for people who work in financial services to remember.... Your clients have a lot of cash that is held away from you as an advisor and you as an advisor actually have a lot less visibility into that cash than you think."

The article cites "Capgemini'​s World Wealth Report," which comments, "Cash and cash equivalents, which was stable at around 25% of portfolios for the last give years (​2018-​2022), significantly increased -- by almost 10 percentage points -- to 34% as of January 2023. Rising interest rates and high inflation have made returns on cash and cash equivalents more attractive, and they are less risky."

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Crane Data'​s April Money Fund Portfolio Holdings, with data as of March 31, 2024, show that Repo holdings rose while Treasuries and Time Deposits fell. Money market securities held by Taxable U.​S. money funds (​tracked by Crane Data) decreased by $​63.​1 billion to $​6.​302 trillion in March, after increasing $​66.​9 in February, $​86.​6 in January, $​51.​1 billion in December and $​244.​0 billion in November. Assets decreased $​57.​9 billion in October, but increased $​56.​1 in September, $​106.​7 billion in August and $​78.​3 billion in July. Repo bounced back, increasing $​13.​4 billion, after a steep slide the month prior, but it remained in the No. 2 spot among portfolio segments. Treasuries decreased by $​19.​6 billion, but they continued to be the largest portfolio segment. The U.​S. Treasury continues to be the single largest Issuer to MMFs. `​In March, U.​S. Treasury holdings fell to $​2.​540 trillion vs. the Fed RRP'​s $​536.​8 billion (​which rose $​72.​2 billion). Agencies were the third largest segment, CP remained fourth, ahead of CDs, Other/​Time Deposits and VRDNs. Below, we review our latest Money Fund Portfolio Holdings statistics.

Among taxable money funds, Repurchase Agreements (​repo) increased $​13.​4 billion (​0.​6%) to $​2.​359 trillion, or 37.​4% of holdings, in March, after decreasing $​137.​6 billion in February, $​163.​2 billion in January and increasing $​74.​8 billion in December. Repo fell $​20.​3 billion in November, $​329.​2 billion in October and $​84.​0 billion in September. Treasury securities fell $​19.​6 billion (-​0.​8%) to $​2.​540 trillion, or 40.​3% of holdings, after increasing $​206.​2 billion in February, $​104.​7 billion in January, $​69.​6 billion in December, $​250.​1 billion in November, $​178.​1 billion in October and $​164.​9 billion in September. Government Agency Debt was down $​14.​2 billion, or -​1.​9%, to $​717.​2 billion, or 11.​4% of holdings. Agencies decreased $​6.​7 billion in February, increased $​43.​9 billion in January, decreased $​21.​8 billion in December, increased $​4.​4 billion in November and $​36.​1 billion in October, but they decreased $​8.​3 billion in September. Repo, Treasuries and Agency holdings now total $​5.​616 trillion, representing a massive 89.​1% of all taxable holdings.

Money fund holdings of CP, CDs and Time Deposits all decreased in March. Commercial Paper (​CP) decreased $​3.​9 billion (-​1.​3%) to $​304.​0 billion, or 4.​8% of holdings. CP holdings decreased $​2.​1 billion in February, increased $​18.​6 billion in January and decreased $​14.​8 billion in December. But CP increased $​5.​5 billion in November, $​17.​6 billion in October and $​3.​0 billion in September. Certificates of Deposit (​CDs) decreased $​18.​7 billion (-​7.​9%) to $​217.​4 billion, or 3.​4% of taxable assets. CDs increased $​0.​8 billion in February, $​19.​5 billion in January and decreased $​5.​4 billion in December. But CDs increased $​6.​9 billion in November, $​11.​2 billion in October and $​0.​5 billion in September. Other holdings, primarily Time Deposits, decreased $​20.​3 billion (-​11.​7%) to $​152.​9 billion, or 2.​4% of holdings, after increasing $​5.​7 billion in February, $​63.​4 billion in January, decreasing $​52.​1 billion in December and $​3.​1 billion in November. VRDNs rose to $​12.​1 billion, or 0.​2% of assets. (​Note: This total is VRDNs for taxable funds only. We will post our Tax Exempt MMF holdings separately Wednesday around noon.)

Prime money fund assets tracked by Crane Data rose to $​1.​389 trillion, or 22.​0% of taxable money funds' $​6.​302 trillion total. Among Prime money funds, CDs represent 15.​7% (​down from 17.​1% a month ago), while Commercial Paper accounted for 21.​8% (​down from 22.​2% in February). The CP totals are comprised of: Financial Company CP, which makes up 14.​1% of total holdings, Asset-​Backed CP, which accounts for 5.​5%, and Non-​Financial Company CP, which makes up 2.​2%. Prime funds also hold 3.​4% in US Govt Agency Debt, 17.​0% in US Treasury Debt, 15.​9% in US Treasury Repo, 0.​3% in Other Instruments, 9.​1% in Non-​Negotiable Time Deposits, 5.​8% in Other Repo, 8.​8% in US Government Agency Repo and 0.​7% in VRDNs.

Government money fund portfolios totaled $​3.​190 trillion (​50.​6% of all MMF assets), down from $​3.​266 trillion in February, while Treasury money fund assets totaled another $​1.​724 trillion (​27.​4%), up from $​1.​716 trillion the prior month. Government money fund portfolios were made up of 21.​0% US Govt Agency Debt, 17.​8% US Government Agency Repo, 32.​8% US Treasury Debt, 28.​3% in US Treasury Repo, 0.​0% in Other Instruments. Treasury money funds were comprised of 72.​9% US Treasury Debt and 27.​1% in US Treasury Repo. Government and Treasury funds combined now total $​4.​914 trillion, or 78.​0% of all taxable money fund assets.

European-​affiliated holdings (​including repo) decreased by $​113.​0 billion in March to $​677.​0 billion; their share of holdings fell to 10.​7% from last month'​s 12.​5%. Eurozone-​affiliated holdings decreased to $​453.​7 billion from last month'​s $​498.​3 billion; they account for 7.​2% of overall taxable money fund holdings. Asia & Pacific related holdings fell to $​281.​0 billion (​4.​5% of the total) from last month'​s $​304.​5 billion. Americas related holdings rose to $​5.​336 trillion from last month'​s $​5.​263 trillion, and now represent 84.​7% of holdings.

The overall taxable fund Repo totals were made up of: US Treasury Repurchase Agreements (​up $​38.​8 billion, or 2.​5%, to $​1.​589 trillion, or 25.​2% of assets); US Government Agency Repurchase Agreements (​down $​31.​3 billion, or -​4.​4%, to $​689.​1 billion, or 10.​9% of total holdings), and Other Repurchase Agreements (​up $​6.​0 billion, or 8.​0%, from last month to $​80.​8 billion, or 1.​3% of holdings). The Commercial Paper totals were comprised of Financial Company Commercial Paper (​down $​1.​4 billion to $​196.​4 billion, or 3.​1% of assets), Asset Backed Commercial Paper (​up $​0.​5 billion to $​76.​8 billion, or 1.​2%), and Non-​Financial Company Commercial Paper (​down $​3.​0 billion to $​30.​8 billion, or 0.​5%).

The 20 largest Issuers to taxable money market funds as of March 31, 2024, include: the US Treasury ($​2.​540T, 40.​3%), Federal Home Loan Bank ($​578.​6B, 9.​2%), the Federal Reserve Bank of New York ($​536.​8B, or 8.​5%), Fixed Income Clearing Corp ($​491.​9B, 7.​8%), RBC ($​204.​7B, 3.​2%), JP Morgan ($​149.​1B, 2.​4%), BNP Paribas ($​139.​8B, 2.​2%), Federal Farm Credit Bank ($​124.​2B, 2.​0%), Goldman Sachs ($​114.​6B, 1.​8%), Citi ($​114.​2B, 1.​8%), Bank of America ($​113.​8B, 1.​8%), Barclays PLC ($​80.​5B, 1.​3%), Mitsubishi UFJ Financial Group Inc ($​68.​2B, 1.​1%), Wells Fargo ($​65.​9B, 1.​0%), Sumitomo Mitsui Banking Corp ($​64.​3B, 1.​0%), Canadian Imperial Bank of Commerce ($​53.​3B, 0.​8%), Bank of Montreal ($​48.​7B, 0.​8%), Credit Agricole ($​47.​8B, 0.​8%), Toronto-​Dominion Bank ($​47.​3B, 0.​7%) and Societe Generale ($​43.​0B, 0.​7%).

In the repo space, the 10 largest Repo counterparties (​dealers) with the amount of repo outstanding and market share (​among the money funds we track) include: the Federal Reserve Bank of New York ($​536.​8B, 22.​8%), Fixed Income Clearing Corp ($​491.​9B, 20.​9%), RBC ($​166.​9B, 7.​1%), JP Morgan ($​137.​8B, 5.​8%), BNP Paribas ($​125.​2B, 5.​3%), Goldman Sachs ($​113.​8B, 4.​8%), Citi ($​103.​0B, 4.​4%), Bank of America ($​90.​2B, 3.​8%), Barclays ($​57.​7B, 2.​4%) and Wells Fargo ($​55.​3B, 2.​3%). The largest users of the $​536.​8 billion in Fed RRP include: Vanguard Federal Money Mkt Fund ($​81.​8B), Fidelity Govt Money Market ($​36.​7B), Fidelity Cash Central Fund ($​32.​2B), Vanguard Cash Reserves Federal MM ($​29.​0B), Goldman Sachs FS Govt ($​25.​3B), Northern Instit Treasury MMkt ($​22.​4B), Fidelity Sec Lending Cash Central Fund ($​20.​7B), Fidelity Inv MM: Govt Port ($​18.​8B), Federated Hermes Govt Oblig ($​18.​5B), and Schwab Treasury Oblig MF ($​16.​5B).

The 10 largest issuers of "​credit" -- CDs, CP and Other securities (​including Time Deposits and Notes) combined -- include: RBC ($​37.​8B, 6.​3%), Mizuho Corporate Bank Ltd ($​26.​5B, 4.​4%), Toronto-​Dominion Bank ($​24.​3B, 4.​0%), Bank of America ($​23.​5B, 3.​9%), Mitsubishi UFJ Financial Group Inc ($​23.​0B, 3.​8%), Barclays PLC ($​22.​8B, 3.​8%), Bank of Montreal ($​22.​5B, 3.​7%), Credit Agricole ($​19.​5B, 3.​2%), Canadian Imperial Bank of Commerce ($​19.​5B, 3.​2%) and Bank of Nova Scotia ($​18.​5B, 3.​1%).

The 10 largest CD issuers include: Bank of America ($​15.​7B, 7.​2%), Mitsubishi UFJ Financial Group Inc ($​13.​3B, 6.​1%), Mizuho Corporate Bank Ltd ($​11.​7B, 5.​4%), Sumitomo Mitsui Banking Corp ($​11.​6B, 5.​4%), Credit Agricole ($​11.​2B, 5.​2%), Toronto-​Dominion Bank ($​11.​0B, 5.​1%), Sumitomo Mitsui Trust Bank ($​10.​9B, 5.​0%), Wells Fargo ($​10.​5B, 4.​9%), Mitsubishi UFJ Trust and Banking Corporation ($​10.​5B, 4.​8%) and Canadian Imperial Bank of Commerce ($​8.​6B, 3.​9%).

The 10 largest CP issuers (​we include affiliated ABCP programs) include: RBC ($​17.​7B, 6.​5%), Bank of Montreal ($​13.​3B, 4.​9%), Toronto-​Dominion Bank ($​12.​5B, 4.​6%), Barclays PLC ($​11.​6B, 4.​3%), JP Morgan ($​11.​3B, 4.​1%), Mitsubishi UFJ Financial Group Inc ($​9.​6B, 3.​5%), National Bank of Canada ($​9.​4B, 3.​5%) and Bank of Nova Scotia ($​9.​2B, 3.​4%), DNB ASA ($​8.​5B, 3.​1%) and BPCE SA ($​8.​1B, 3.​0%).

The largest increases among Issuers include: the Federal Reserve Bank of New York (​up $​72.​2B to $​536.​8B), RBC (​up $​13.​1B to $​204.​7B), Goldman Sachs (​up $​10.​4B to $​114.​6B), Fixed Income Clearing Corp (​up $​9.​4B to $​491.​9B), BNP Paribas (​up $​9.​1B to $​139.​8B), Bank of Montreal (​up $​8.​9B to $​48.​7B), Canadian Imperial Bank of Commerce (​up $​6.​8B to $​53.​3B), Federal Farm Credit Bank (​up $​3.​2B to $​124.​2B), National Bank of Canada (​up $​3.​0B to $​12.​6B) and Sumitomo Mitsui Banking Corp (​up $​2.​8B to $​64.​3B).

The largest decreases among Issuers of money market securities (​including Repo) in March were shown by: Barclays PLC (​down $​45.​9B to $​80.​5B), Citi (​down $​28.​9B to $​114.​2B), Federal Home Loan Bank (​down $​24.​6B to $​578.​6B), US Treasury (​down $​19.​6B to $​2.​540T), Credit Agricole (​down $​19.​1B to $​47.​8B), Australia & New Zealand Banking Group Ltd (​down $​14.​3B to $​17.​2B), Mizuho Corporate Bank Ltd (​down $​8.​6B to $​43.​0B), Sumitomo Mitsui Trust Bank (​down $​6.​9B to $​20.​7B), JP Morgan (​down $​6.​3B to $​149.​1B) and Deutsche Bank AG (​down $​4.​6B to $​17.​4B).

The United States remained the largest segment of country-​affiliations; it represents 78.​3% of holdings, or $​4.​935 trillion. Canada (​6.​4%, $​400.​8B) was in second place, while France (​4.​4%, $​273.​9B) was No. 3. Japan (​4.​2%, $​261.​4B) occupied fourth place. The United Kingdom (​2.​5%, $​154.​9B) remained in fifth place. Netherlands (​1.​2%, $​74.​1B) was in sixth place, followed by Germany (​0.​8%, $​47.​8B), Sweden (​0.​7%, $​40.​9B), Australia (​0.​5%, $​34.​2B), and Spain (​0.​3%, $​20.​2B). (​Note: Crane Data attributes Treasury and Government repo to the dealer'​s parent country of origin, though money funds themselves "​look-​through" and consider these U.​S. government securities. All money market securities must be U.​S. dollar-​denominated.)

As of March 31, 2024, Taxable money funds held 44.​6% (​up from 44.​5%) of their assets in securities maturing Overnight, and another 12.​4% maturing in 2-​7 days (​up from 12.​0%). Thus, 57.​0% in total matures in 1-​7 days. Another 12.​7% matures in 8-​30 days, while 11.​3% matures in 31-​60 days. Note that over three-​quarters, or 81.​0% of securities, mature in 60 days or less, the dividing line for use of amortized cost accounting under SEC regulations. The next bucket, 61-​90 days, holds 5.​6% of taxable securities, while 8.​8% matures in 91-​180 days, and just 4.​7% matures beyond 181 days. (​Visit our Content center to download, or contact us to request our latest Portfolio Holdings reports.)

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Crane Data'​s latest monthly Money Fund Portfolio Holdings statistics will be sent out Tuesday, and we'​ll be writing our regular monthly update on the new March 31 data for Wednesday'​s News. But we also already uploaded a separate and broader Portfolio Holdings data set based on the SEC'​s Form N-​MFP filings on Monday. (​We continue to merge the two series, and the N-​MFP version is now available via our Portfolio Holdings file listings to Money Fund Wisdom subscribers.) Our new N-​MFP summary, with data as of March 31, includes holdings information from 975 money funds (​up 6 from last month), representing assets of $​6.​492 trillion (​down from $​6.​546 trillion). Prime MMFs now total $​1.​403 trillion, or 21.​6% of the total. We review the new N-​MFP data, and we also look at our revised MMF expense data, which shows charged expenses flat and money fund revenues seeing a small drop in March.

Our latest Form N-​MFP Summary for All Funds (​taxable and tax-​exempt) shows Treasuries remaining the largest type of portfolio holding in money market funds after overtaking Repo several months ago. Treasury holdings total $​2.​564 trillion (​down from $​2.​578 billion), or 39.​5% of all holdings, while Repurchase Agreement (​Repo) holdings in money market funds now total $​2.​382 trillion (​up from $​2.​366 trillion), or 36.​7% of all assets. Government Agency securities total $​728.​8 billion (​down from $​743.​5 billion), or 11.​2%. Holdings of Treasuries, Government agencies and Repo (​almost all of which is backed by Treasuries and agencies) combined total $​5.​674 trillion, or a massive 87.​4% of all holdings.

Commercial paper (​CP) totals $​314.​8 billion (​down from $​318.​4 billion), or 4.​8% of all holdings, and the Other category (​primarily Time Deposits) totals $​158.​1 billion (​down from $​178.​7 billion), or 2.​4%. Certificates of Deposit (​CDs) total $​217.​4 billion (​down from $​236.​2 billion), 3.​3%, and VRDNs account for $​127.​9 billion (​up from $​125.​4 billion last month), or 2.​0% of money fund securities.

Broken out into the SEC'​s more detailed categories, the CP totals were comprised of: $​197.​7 billion, or 3.​0%, in Financial Company Commercial Paper; $​77.​3 billion or 1.​2%, in Asset Backed Commercial Paper; and, $​39.​8 billion, or 0.​6%, in Non-​Financial Company Commercial Paper. The Repo totals were made up of: U.​S. Treasury Repo ($​1.​613 trillion, or 24.​8%), U.​S. Govt Agency Repo ($​682.​4B, or 10.​5%) and Other Repo ($​86.​3B, or 1.​3%).

The N-​MFP Holdings summary for the Prime Money Market Funds shows: CP holdings of $​307.​5 billion (​down from $​311.​1 billion), or 21.​9%; Repo holdings of $​426.​7 billion (​up from $​393.​7 billion), or 30.​4%; Treasury holdings of $​241.​6 billion (​up from $​227.​4 billion), or 17.​2%; CD holdings of $​217.​4 billion (​down from $​236.​2 billion), or 15.​5%; Other (​primarily Time Deposits) holdings of $​151.​5 billion (​down from $​170.​7 billion), or 10.​8%; Government Agency holdings of $​48.​7 billion (​up from $​48.​1 billion), or 3.​5% and VRDN holdings of $​9.​6 billion (​unchanged from $​9.​6 billion), or 0.​7%.

The SEC'​s more detailed categories show CP in Prime MMFs made up of: $​197.​7 billion (​down from $​198.​7 billion), or 14.​1%, in Financial Company Commercial Paper; $​77.​3 billion (​up from $​76.​6 billion), or 5.​5%, in Asset Backed Commercial Paper; and $​32.​6 billion (​down from $​35.​8 billion), or 2.​3%, in Non-​Financial Company Commercial Paper. The Repo totals include: U.​S. Treasury Repo ($​224.​8 billion, or 16.​0%), U.​S. Govt Agency Repo ($​121.​3 billion, or 8.​6%), and Other Repo ($​80.​6 billion, or 5.​7%).

In related news, money fund charged expense ratios (​Exp%) were flat in March. Our Crane 100 Money Fund Index and Crane Money Fund Average were 0.​26% and 0.​37%, respectively, as of March 31, 2024. Crane Data revises its monthly expense data and gross yield information after the SEC updates its latest Form N-​MFP data the morning of the 6th business day of the new month. (​They posted this info Monday morning, so we revised our monthly MFI XLS spreadsheet and historical craneindexes.​xlsx averages file to reflect the latest expenses, gross yields, portfolio composition and maturity breakout, then.) Visit our "Content" page for the latest files.

Our Crane 100 Money Fund Index, a simple average of the 100 largest taxable money funds, shows an average charged expense ratio of 0.​26%, unchanged from last month'​s level (​but 18 bps higher than 12/​31/​21'​s 0.​08%). The average is now back around the level (​0.​27%) it was on Dec. 31, 2019, so we estimate that funds are charging normal expenses (​though they are waiving a minimal amount of fees for competitive purposes). The Crane Money Fund Average, a simple average of all taxable MMFs, showed a charged expense ratio of 0.​37% as of March 31, 2024, unchanged from the month prior and slightly below the 0.​40% at year-​end 2019.

Prime Inst MFs expense ratios (​annualized) average 0.​28% (​unchanged from last month), Government Inst MFs expenses average 0.​26% (​unchanged from last month), Treasury Inst MFs expenses average 0.​28% (​down 1 bp from last month). Treasury Retail MFs expenses currently sit at 0.​52%, (​unchanged from last month), Government Retail MFs expenses yield 0.​54% (​down 1 bp from last month). Prime Retail MF expenses averaged 0.​48% (​unchanged from last month). Tax-​exempt expenses were also up 2 bps at 0.​42% on average.

Gross 7-​day yields were slightly lower during the month ended March 31, 2024. The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (​currently 760), shows a 7-​day gross yield of 5.​40%, unchanged from the prior month. The Crane Money Fund Average was 1.​72% at the end of 2019, 0.​15% at the end of 2020 and 0.​09% at the end of 2021. Our Crane 100'​s 7-​day gross yield was also unchanged, ending the month at 5.​41%.

According to our revised MFI XLS and Crane Index numbers, we now estimate that annualized revenue for all money funds is $​16.​883 billion (​as of 3/​31/​24). Our estimated annualized revenue totals decreased from the all-​time high record of $​17.​070B last month and $​16.​855B two months ago. Revenue levels are more than five times larger than May'​s 2021'​s record-​low $​2.​927B level. Charged expenses and gross yields are driven by a number of variables, but revenues should continue their climb higher as money funds continue to see inflows to start the new year.

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Crane Data'​s latest monthly Money Fund Market Share rankings show assets decreased among most of the largest U.​S. money fund complexes in March, after jumping in February. Money market fund assets fell by $​66.​7 billion, or -​1.​0%, last month to $​6.​406 trillion. Total MMF assets have increased by $​88.​0 billion, or 1.​4%, over the past 3 months, and they'​ve increased by $​777.​5 billion, or 13.​8%, over the past 12 months. The largest increases among the 25 largest managers last month were seen by Vanguard, Fidelity, Schwab, American Funds and UBS, which grew assets by $​16.​3 billion, $​12.​2B, $​11.​3B, $​4.​5B and $​2.​5B, respectively. Declines in March were seen by SSGA, JPMorgan, Goldman Sachs, Morgan Stanley and HSBC, which decreased by $​30.​3 billion, $​21.​5B, $​21.​3B, $​8.​5B and $​6.​7B, respectively. Our domestic U.​S. "Family" rankings are available in our MFI XLS product, our global rankings are available in our MFI International product. The combined "Family & Global Rankings" are available to Money Fund Wisdom subscribers. We review the latest market share totals, and look at money fund yields, which were flat to slightly lower in March.

Over the past year through Mar. 31, 2024, Fidelity (​up $​218.​2B, or 19.​8%), Schwab (​up $​157.​9B, or 44.​1%), JPMorgan (​up $​124.​4B, or 24.​0%), Vanguard (​up $​92.​9B, or 18.​4%) and SSGA (​up $​65.​5B, or 43.​4%) were the `​largest gainers. Fidelity, Schwab, Vanguard, Federated Hermes and Dreyfus had the largest asset increases over the past 3 months, rising by $​52.​4B, $​39.​3B, $​29.​5B, $​12.​8B and $​10.​1B, respectively. The largest declines over 12 months were seen by: Goldman Sachs (​down $​72.​6B), Invesco (​down $​24.​3B), Morgan Stanley (​down $​12.​5B), and Western (​down $​5.​2B). The largest declines over 3 months included: Goldman Sachs (​down $​24.​3B), Allspring (​down $​15.​1B) and Morgan Stanley (​down $​13.​2B).

Our latest domestic U.​S. Money Fund Family Rankings show that Fidelity Investments remains the largest money fund manager with $​1.​320 trillion, or 20.​6% of all assets. Fidelity was up $​12.​3B in March, up $​52.​4 billion over 3 mos., and up $​218.​2B over 12 months. JPMorgan ranked second with $​643.​6 billion, or 10.​0% market share (​down $​21.​5B, down $​1.​2B and up $​124.​4B for the past 1-​month, 3-​mos. and 12-​mos., respectively). Vanguard ranked in third place with $​598.​4 billion, or 9.​3% of assets (​up $​16.​3B, up $​29.​5B and up $​92.​9B). Schwab ranked fourth with $​515.​7 billion, or 8.​1% market share (​up $​11.​3B, up $​39.​3B and up $​157.​9B), while BlackRock was the fifth largest MMF manager with $​504.​0 billion, or 7.​9% of assets (​down $​6.​5B, down $​5.​7B and up $​17.​9B for the past 1-​month, 3-​mos. and 12-​mos.).

Federated Hermes was in sixth place with $​449.​6 billion, or 7.​0% (​down $​2.​7B, up $​12.​8B and up $​60.​9B), while Goldman Sachs was in seventh place with $​369.​4 billion, or 5.​8% of assets (​down $​21.​3B, down $​24.​3B and down $​72.​6B). Dreyfus ($​276.​4B, or 4.​3%) was in eighth place (​down $​6.​4B, up $​10.​1B and up $​15.​1B), followed by Morgan Stanley ($​237.​8B, or 3.​7%; down $​8.​5B, down $​13.​2B and down $​12.​5B). SSGA was in 10th place ($​216.​2B, or 3.​4%; down $​30.​3B, down $​8.​2B and up $​65.​5B).

The 11th through 20th-​largest U.​S. money fund managers (​in order) include: Allspring (​formerly Wells Fargo) ($​191.​6B, or 3.​0%), American Funds ($​169.​1B, or 2.​6%), Northern ($​164.​9B, or 2.​6%), First American ($​139.​8B, or 2.​2%), Invesco ($​132.​3B, or 2.​1%), UBS ($​108.​2B, or 1.​7%), T. Rowe Price ($​46.​7B, or 0.​7%), DWS ($​43.​3B, or 0.​7%), HSBC ($​39.​6B, or 0.​6%) and Western ($​28.​9B, or 0.​5%). Crane Data currently tracks 61 U.​S. MMF managers, unchanged from last month.

When European and "​offshore" money fund assets -- those domiciled in places like Ireland, Luxembourg and the Cayman Islands -- are included, the top 10 managers are the same as the domestic list, except: BlackRock moves up to the No. 3 spot, Vanguard moves down to the No. 4 spot and Schwab moves down to No. 5. Goldman Sachs moves up to the No. 6 spot, while Federated Hermes moves down to the No. 7 spot. Morgan Stanley moves up to the No. 8 spot while Dreyfus moves down to the No. 9 spot <​b:>`​_. Global Money Fund Manager Rankings include the combined market share assets of our MFI XLS (​domestic U.​S.) and our MFI International ("​offshore") products.

The largest Global money market fund families include: Fidelity ($​1.​333 trillion), JP Morgan ($​883.​3B), BlackRock ($​745.​4B), Vanguard ($​598.​4B) and Schwab ($​515.​7B). Goldman Sachs ($​501.​6B) was in sixth, Federated Hermes ($​461.​2B) was seventh, followed by Morgan Stanley ($​323.​0B), Dreyfus/​BNY Mellon ($​300.​0B) and SSGA ($​262.​1B), which round out the top 10. These totals include "​offshore" U.​S. Dollar money funds, as well as Euro and Pound Sterling (​GBP) funds converted into U.​S. dollar totals.

The April issue of our Money Fund Intelligence and MFI XLS, with data as of 3/​31/​24, shows that yields were flat to down slightly in March across the Crane Money Fund Indexes. The Crane Money Fund Average, which includes all taxable funds covered by Crane Data (​currently 760), was 5.​03% (​unchanged) for the 7-​Day Yield (​annualized, net) Average, the 30-​Day Yield was down 1 bp at 5.​02%. The MFA'​s Gross 7-​Day Yield was at 5.​40% (​unchanged), and the Gross 30-​Day Yield also was down 1 bp at 5.​39%. (Gross yields will be revised Tuesday at noon, though, once we download the SEC'​s Form N-​MFP data for 3/​31/​24.)

Our Crane 100 Money Fund Index shows an average 7-​Day (​Net) Yield of 5.​14% (​unchanged) and an average 30-​Day Yield at 5.​14% (​down 1 bp). The Crane 100 shows a Gross 7-​Day Yield of 5.​41% (​unchanged), and a Gross 30-​Day Yield of 5.​40% (​down 1 bp). Our Prime Institutional MF Index (​7-​day) yielded 5.​22% (​down 1 bp) as of Mar. 31. The Crane Govt Inst Index was at 5.​12% (​up 1 bp) and the Treasury Inst Index was at 5.​08% (​down 1 bp). Thus, the spread between Prime funds and Treasury funds is 14 basis points, and the spread between Prime funds and Govt funds is 10 basis points. The Crane Prime Retail Index yielded 5.​04% (​down 1 bp), while the Govt Retail Index was 4.​83% (​unchanged), the Treasury Retail Index was 4.​84% (​down 1 bp from the month prior). The Crane Tax Exempt MF Index yielded 3.​26% (​up 34 bps) as of March.

Gross 7-​Day Yields for these indexes to end March were: Prime Inst 5.​50% (​down 1 bp), Govt Inst 5.​37% (​up 1 bp), Treasury Inst 5.​36% (​down 1 bp), Prime Retail 5.​52% (​down 1 bp), Govt Retail 5.​38% (​unchanged) and Treasury Retail 5.​36% (​down 1 bp). The Crane Tax Exempt Index rose to 3.​65% (​up 32 bps). The Crane 100 MF Index returned on average 0.​43% over 1-​month, 1.​27% over 3-​months, 1.​27% YTD, 5.​15% over the past 1-​year, 2.​51% over 3-​years (​annualized), 1.​88% over 5-​years, and 1.​25% over 10-​years.

The total number of funds, including taxable and tax-​exempt, was up 2 in March at 881. There are currently 760 taxable funds, up 2 from the previous month, and 121 tax-​exempt money funds (​unchanged from last month). (Contact us if you'​d like to see our latest MFI XLS, Crane Indexes or Market Share report.)

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The April issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "Pending Reforms Trigger Prime Shift: Federated, Vanguard Go," which covers the budding exodus from Prime Institutional MMFs; "Bond Fund Symposium '​24: Ultra-​Shorts Look for Bounce," which quotes from our recent ultra-​short bond fund conference; and, "Worldwide MF Assets Break $​10 Trillion in '​23; US Leads," which reviews ICI'​s latest global money fund statistics. We also sent out our MFI XLS spreadsheet Friday a.​m., and we'​ve updated our Money Fund Wisdom database with 3/​31/​24 data. Our April Money Fund Portfolio Holdings are scheduled to ship on Tuesday, April 9, and our April Bond Fund Intelligence is scheduled to go out on Friday, April 12.

MFI'​s "Prime Shift" article says, "Federated Money Market Trust is the first Prime Institutional MMF to announce its liquidation ahead of the latest round of SEC MMF Reforms. Vanguard and American Funds filed to convert two large internal money funds as well, and we'​ll no doubt see more moves over the next several months. The SEC'​s asset totals ... show Prime MMFs representing $​1.​4 trillion (​as of 2/​29/​24), or 21.​5%, of the $​6.​5 trillion in total MMFs, with Inst Public totaling $​342 billion, Inst Nonpublic totaling $​332 billion and Prime Retail totaling $​733 billion."

It continues, “​A Prospectus Supplement filing for the $​1.​2 billion Federated Hermes Money Market Obligations Trust, including the Inst (​MMPXX), Capital (​MMLXX) and Eagle Shares (​MMMXX), tells us, 'On Feb. 15, 2024, the Board of Trustees of Federated Hermes Money Market Obligations Trust approved a Plan of Liquidation for the Federated Hermes Institutional Money Market Management pursuant to which the Fund will be liquidated on or about July 12, 2024.... In approving the Liquidation, the Board determined the Liquidation is in the best interests of the Fund and its shareholders. Accordingly, the Fund'​s investment adviser will take all action necessary to liquidate, dissolve, and wind up the affairs of the Fund.'"

We write in our Bond Fund article, "​We recently hosted our latest Crane'​s Bond Fund Symposium in Philadelphia. Below, we quote from the 'Senior Portfolio Manager Perspectives,' which featured J.​P. Morgan Asset Management'​s Dave Martucci, UBS A.​M.'​s Dave Rothweiler and PIMCO'​s Jerome Schneider. (​Thanks again to those who supported BFS. Crane Data subscribers may access the recordings and conference materials at the bottom of our 'Content' page or via our 'Bond Fund Symposium 2024 Download Center.')"

It tells us, "​Rothweiler comments, 'Looking back to 2022-​2023, you had competition from the money funds with higher yields [​and] stable NAVs, ... and people pushing to go longer duration. So you were getting hit from both ends.... The Street just doesn'​t have the balance sheet they used to have. [​When] everyone runs out the door at the same time, liquidity is of the utmost importance.'"

Our "Worldwide" piece states, "​The Investment Company Institute published, 'Worldwide Regulated Open-​Fund Assets and Flows, Fourth Quarter 2023,' recently, which shows that money fund assets globally jumped by $​497.​0 billion, or 5.​1%, in Q4'​23 to $​10.​441 trillion. The increases were led by a sharp jump in money funds in U.​S., while Ireland, Luxembourg, France and China also rose. Meanwhile, money funds in Argentina and Belgium were lower. MMF assets worldwide increased by $​1.​585 trillion, or 19.​1%, in the 12 months through 12/​31/​23, and money funds in the U.​S. now represent 56.​7% of worldwide assets."

It continues, "​ICI'​s release says, 'Worldwide regulated open-​end fund assets increased 8.​6% to $​68.​85 trillion at the end of the fourth quarter of 2023, excluding funds of funds.... [​ICI] compiles worldwide regulated open-​end fund statistics on behalf of the International Investment Funds Association (​IIFA).... The collection for the fourth quarter of 2023 contains statistics from 45 jurisdictions.'"

MFI also includes the News brief, "MMF Assets Dip in March, Rebound to Record $​6.​538 Trillion on April 2." It states, "Money fund assets fell by $​66.​7 billion to $​6.​407 trillion in March, but they'​ve soared by $​140.​3 billion in the first 2 days of April. Over the past 12 months, money funds have risen by $​778 billion, or 13.​8%, with Retail MMFs jumping $​531.​5 billion (​29.​2%) and Inst MMFs rising by $​236.​7 billion (​6.​4%)."

Another News brief, "BlackRock Launches Tokenized MF," comments, "​A release entitled, 'BlackRock Launches Its First Tokenized Fund, BUIDL, on the Ethereum Network,' says, 'BlackRock unveil[​ed] its first tokenized fund issued on a public blockchain, the BlackRock USD Institutional Digital Liquidity Fund (​BUIDL). BUIDL will provide qualified investors with the opportunity to earn U.​S. dollar yields by subscribing to the Fund through Securitize Markets, LLC.'"

A third News brief, "ICI: MMF Expense Ratios 0.​22% in '​23," says, "​The Investment Company Institute published, 'Trends in the Expenses and Fees of Funds, 2023,' which tells us, 'Average expense ratios of hybrid and bond mutual funds, as well as money market funds, have ... declined meaningfully since 1996.' A table shows expense ratios by type from 1996 to 2023 and shows bonds fund averages falling from 0.​84% to 0.​37% over this period and money fund ratios falling from 0.​52% to 0.​22%. (Note: Crane Data shows the average expense ratio for money market mutual funds at 0.​26% as of 2/​29/​24 as measured by our Crane 100 Money Fund Index.)"

A sidebar, "WSJ on Wall of Cash Bulls," says, "The Wall Street Journal writes, 'Sorry Stock Bulls, the '​Wall of Cash' Isn'​t All Headed Your Way.' They explain, '​Trillions of dollars are seemingly available to move out of cash funds and be put to work in the stock market. That possibility has had stock-​market bulls salivating, but they are probably in for disappointment. Despite the expectation that the Federal Reserve'​s next move is to cut rates, money-​market-​fund assets have continued to grow at a fast pace. They are now around $​6.​5 trillion, according to industry tracker Crane Data. While the S&​P 500 is up 8% year to date, total money funds added more than $​150 billion in assets through the first two months of 2024, or about $​50 billion more than they did in the same period last year, according to Crane.'"

Our April MFI XLS, with March 31 data, shows total assets decreased $​66.​7 billion to $​6.​407 trillion, after increasing $​50.​0 billion in February, $​87.​0 billion in January, $​24.​5 billion in December and $​219.​8 billion in November. Assets decreased $​39.​3 billion in October, but increased $​77.​8 billion in September, $​104.​2 billion in August, $​21.​0 billion in July, $​20.​3 billion in June, $​152.​7 billion in May and $​56.​5 billion in April."

Our broad Crane Money Fund Average 7-​Day Yield was down 1 bp to 5.​03%, and our Crane 100 Money Fund Index (​the 100 largest taxable funds) was down 1 bp to 5.​14% in March. On a Gross Yield Basis (​7-​Day) (​before expenses are taken out), the Crane MFA and the Crane 100 averaged 5.​40% and 5.​41%, respectively. Charged Expenses averaged 0.​37% and 0.​26% for the Crane MFA and the Crane 100. (​We'​ll revise expenses on Monday once we upload the SEC'​s Form N-​MFP data for 3/​31/​24.) The average WAM (​weighted average maturity) for the Crane MFA was 37 days (​down 1 bp from previous month) and the Crane 100 WAM was down 2 bps at 38 days. (​See our Crane Index or craneindexes.​xlsx history file for more on our averages.)

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We passed another Money Fund Reform milestone earlier this week as the new mandate for higher liquidity levels (​25% daily and 50% weekly) went live (​on April 2), along with the ability for funds to implement emergency discretionary liquidity fees. (​The mandatory emergency liquidity fees for Prime Inst MMFs don'​t go live until October 2.) The average DLA (​daily liquid assets) for Taxable MMFs is 73.​8 days; WLA (​weekly liquid assets) is 82.​8 days. For Prime Inst MMFs, these average 54.​6 and 67.​4 days, respectively, and for Prime Retail these average 43.​3 and 57.​2 days. Below, we review some recent SEC filings, which are adjusting Prospectuses to the new rules. (Note: money fund assets surged to record levels yet again in the first 2 days of April, after dropping sharply at month- and quarter-​end, which included the Good Friday Holiday and Easter weekend. Total MMFs rose $​140.​3 billion on April 1 and 2 to a record $​6.​538 trillion.)

A Prospectus Supplement filing for Allspring Money Market Funds, tells us, "The following changes are effective April 2, 2024.... The following paragraph replaces the first paragraph under the sub-​heading 'Principal Investment Risks' in the '​Fund Summary' section for the Allspring Money Market Fund and the Allspring National Tax-​Free Money Market Fund: You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $​1.​00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon sale of your shares. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund'​s sponsor is not required to reimburse the Fund for losses, and you should not expect that the sponsor will provide financial support to the Fund at any time, including during periods of market stress."

It continues, "​The following disclosure is added to end of the 'Buying and Selling Fund Shares' section for all of the Funds: Discretionary Liquidity Fees. Under Rule 2a-​7, a money market Fund is permitted to impose a discretionary liquidity fee (​not to exceed 2% of the value of the shares redeemed) on redemptions if the Fund'​s Board (​or its delegate) determines that doing so is in the best interests of the Fund. Such determination will be based on current market conditions and the Fund'​s particular circumstances, and it is expected that such fee would be imposed, if at all, during periods of extraordinary market stress. The Fund would retain liquidity fees for the benefit of remaining shareholders. The Board (​or its delegate) may, in its discretion, terminate a liquidity fee at any time if it determines that imposing such liquidity fee is no longer in the best interests of the Fund."

A filing for Federated Hermes Municipal Obligations Fund and Federated Hermes Tax-​Free Obligations Fund, titled, "Supplement to Current Summary Prospectuses, Prospectuses and Statements of Additional Information," states, "Under amendments to Rule 2a-​7, the Funds may no longer impose a redemption gate and the imposition of liquidity fees is no longer tied to the Funds' weekly liquid assets. Accordingly, all references to redemption gates and the link between the imposition of liquidity fees to the Funds' weekly liquid assets are removed. The Funds may impose discretionary liquidity fees on redemptions subject to a determination by the Funds' Board of Trustees or its delegate that such liquidity fee is in the Funds' best interests. If the Funds' Board, including a majority of the independent Trustees, or its delegate, determines that imposing a liquidity fee is in the Funds' best interests, the Funds may impose discretionary liquidity fees of up to 2% of the value of the shares redeemed."

A Prospectus Supplement filing for BNY Mellon'​s Money Market Funds, other than Treasury Only and Government Only Funds, tells us, "​The following information supersedes and replaces any contrary information in the sections '​Principal Risks' in the fund'​s summary prospectus and '​Fund Summary – Principal Risks,' '​Fund Details – Investment Risks' and '​Shareholder Guide – Buying and Selling Shares' in the fund'​s prospectus: The fund may impose a discretionary liquidity fee upon the sale of your fund shares if such a fee is determined to be in the best interests of the fund during periods of market stress. Any such fee may not exceed 2% of the value of the shares redeemed and would be applied primarily to mitigate the broader effects of preemptive '​runs' and otherwise to manage potential dilution of remaining shareholders' interests in the fund. Such fee would be applied to all shares redeemed and would remain in effect until it is determined that imposing the fee is no longer in the best interests of the fund."

A recent filing for First American Funds states, "​The following replaces the information provided under the heading 'Shareholder Information -- Additional Information on Purchasing and Redeeming Fund Shares -- Liquidity Fees' on pages 44-​46 of the Prospectus: With respect to Retail Prime Obligations Fund and Retail Tax Free Obligations Fund, under authority delegated to the adviser by the funds' board of trustees, the adviser is permitted to impose a liquidity fee on redemptions (​up to 2%) if it determines it is in the best interests of the fund to impose a liquidity fee. A liquidity fee may be imposed as early as the same day on which the adviser determines to impose such fee and may occur before the end of the business day. Liquidity fees may be terminated at any time in the discretion of the adviser. Unprocessed purchase orders that the fund received prior to notification of the imposition of a liquidity fee will be canceled unless re-​confirmed. Under certain circumstances, the fund may pay redemptions without adding a liquidity fee to the redemption amount if the fund can verify that the redemption or exchange order was submitted to the fund'​s agent before the fund imposed liquidity fees. Once a liquidity fee is in place, shareholders will not be permitted to exchange into or out of a fund until the fee is terminated."

It continues, "The adviser generally expects that a liquidity fee would be imposed, if at all, during periods of extraordinary market stress. The adviser generally expects that a liquidity fee would be imposed only after the fund has notified financial intermediaries and shareholders that a liquidity fee will be imposed. Announcements regarding the imposition of liquidity fees, or the termination of liquidity fees, will be filed with the SEC on Form N-​CR and will be available on the website of the fund (http://​www.​firstamericanfunds.​com). In addition, the fund will make such announcements through a supplement to its prospectuses and may make such announcements through a press release or by other means. Liquidity fees are designed to transfer the costs of liquidating fund securities from shareholders who remain in the fund to those who leave the fund during periods when liquidity is scarce. Liquidity fees imposed by a fund will reduce the amount you will receive upon the redemption of your shares, and each fund generally expects such fees will generally decrease the amount of any capital gain or increase the amount of any capital loss you will recognize with respect to such redemption. Proceeds to a fund from liquidity fees may take the form of a return to shareholders as a distribution. Financial intermediaries will be required to promptly take such actions reasonably requested by a fund, the transfer agent or the adviser to implement, modify or remove, or to assist the fund in implementing, modifying or removing, a liquidity fee established by the fund."

A Principal Funds Supplment says, "The changes described below are being made to the Prospectus for the Money Market Fund.... In the Principal Risks section, add the following alphabetically: Discretionary Liquidity Fee Risk. The Fund may charge a liquidity fee of up to 2% of the value of shares redeemed if the Fund'​s Board of Directors (​or PGI, in accordance with Board-​approved guidelines) determines that doing so is in the best interests of the Fund. Accordingly, your redemptions from the Fund may be subject to a liquidity fee when you sell your shares at certain times."

Finally, a Prospectus Supplement for Fidelity Government Money Market Fund and Fidelity Money Market Fund subtitled, "Special Limitations Affecting Redemptions of Fidelity Money Market Fund: Discretionary Liquidity Fees," says, "A fund may impose liquidity fees during adverse market conditions. If, at any time, the fund'​s Board of Trustees (​or its delegate) determines it is in the fund'​s best interests, the fund must impose a liquidity fee of no more than 2% of the value of the shares redeemed on all fund redemptions. Any such fee, which may be imposed as early as the same day, would remain in effect until the fund'​s Board of Trustees (​or its delegate) determines that the fee is no longer in the fund'​s best interests."

It adds, "Liquidity fees are generally designed to transfer the costs of liquidating fund securities from shareholders who remain in a fund to those who leave the fund during periods when liquidity is scarce or otherwise manage potential dilution and/​or liquidity during periods of market stress. The fees are payable to the fund and any fees charged to a shareholder will fully or partially offset the gain or increase the loss realized by that shareholder upon redemption. If discretionary liquidity fees are imposed, a fund will notify shareholders on the fund'​s website or by press release."

For more, see these recent Crane Data News stories: "Federated Liquidating Money Mkt Trust" (​4/​1/​24), "Vanguard Market Liquidity Fund Files to Go Government, Joins American" (​3/​20/​24), "American Funds Central Cash to Convert to Govt to Avoid Liquidity Fees" (​2/​6/​24), "DWS Government MMFs File Update" (​3/​28/​24), "Rolling w/​Reform Changes V: Little Change in '​23 Ahead of MMF Reforms" (​1/​5/​24), "Fund Companies Prep for Liquidity Fees Via Filings, Discretionary Fees" (​10/​26/​23).

The last article comments, "Now that the previous regime of emergency gates and liquidity fees has been removed from money market mutual funds (​effective Oct. 2), advisors have begun changing disclosures and filing updates to prepare for the new round of pending regulations. As we mentioned in our Oct. 23 Link of the Day, "Dreyfus Recaps 2a-​7 Changes for AFP," discretionary liquidity fees will become live on April 2, 2024 and mandatory liquidity fees for Prime Institutional MMFs will become active on Oct. 2, 2024."

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The Brookings Institution published an update titled, "The evolution of banking in the 21st century," which summarizes, "Uninsured deposits should be subjected to tougher regulatory requirements to guard against the type of rapid runs that toppled three large regional banks last spring, suggests a paper discussed at the Brookings Papers on Economic Activity (​BPEA) conference on March 29. In the wake of the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank (​three of the four largest bank failures in U.​S. history), the authors look at two trends over the past quarter century -- the substantial growth of uninsured deposits and the migration of business lending to non-​banks. The trends challenged the failed banks and banks like them, and in some cases left them vulnerable to runs. And, using a simple model they constructed, the authors assess regulatory options for reducing the risk of destabilizing runs."

Authors Samuel Hanson, Victoria Ivashina, Laura Nicolae, Jeremy Stein, Adi Sunderam, and Daniel Tarullo, all from Harvard University, comment, "One of the most striking developments that we document ... is a dramatic growth in the economy-​wide ratio of bank deposits to GDP [​gross domestic product], with much of this growth coming from large uninsured deposits."

The brief explains, "​According to their paper -- 'The Evolution of Banking in the 21st Century: Evidence and Regulatory Implications' -- total deposits in the fourth quarter of 1995 were 49% of GDP, with 20% of those deposits uninsured. By the third quarter of 2023, total deposits were 75% of GDP, 39% of them uninsured. Adding to that vulnerability, technology and social media have made it increasingly easier for large depositors to quickly withdraw their money."

It says, "Meanwhile, banks with the most rapid growth in deposits have seen the biggest declines in business lending, which has migrated toward non-​bank entities such as securitization vehicles, mutual funds, insurance companies, and, in recent years, private-​credit funds and business development companies.... Instead of lending to large- and medium-​size businesses, regional banks have shifted toward investing in longer-​term Treasury securities and government-​guaranteed mortgage backed securities. Those securities have little or no credit risk (​the risk of default) but they are subject to interest-​rate risk. When interest rates rise sharply, as they did in 2022 when the Federal Reserve raised rates to fight inflation, existing long-​term securities lose value because investors can earn more from newly issued securities."

The update tells us, "To reduce the risk of runs, the authors looked at expanding federal deposit insurance to cover all or most deposits. But that expansion of the government'​s footprint would increase taxpayer exposure and could weaken banks' incentives to guard against risk. Also, in the case of banks that have shifted away from lending, it would in effect subsidize bond holding rather than lending."

It adds, "Instead, the authors favor strengthening liquidity regulations, which aim to ensure banks have funds available to meet deposit withdrawals. The authors would require banks with more than $​100 billion in assets to back their uninsured deposits by pre-​positioning collateral, largely in the form of short-​term government securities, at the Federal Reserve. That requirement would enable them to withstand a run by borrowing from the Fed'​s discount window and would encourage them to shift their asset-​mix away from longer-​term securities and toward short-​term securities, which are much less subject to interest-​rate risk."

Finally, the summary says, "The authors also recommend that regulators re-​think rules that, except for the eight largest U.​S. banks, shield regulatory capital from reflecting most market losses on the securities banks hold. And, the authors recommend that regulators '​look more positively on proposed mergers of mid-​size regionals and on acquisitions of smaller banks by mid-​sized regionals.' That could either help regionals to better compete with the largest banks or could aid in wringing out excess capacity to the extent that the business model of the regionals continues to be under pressure."

In related news, the website DepositAccounts.​com published the brief, "Deposit Account Holders Netted 5.​25 Times More Interest in 2023 Than in 2022." It states, "The past couple of years have been good to depositors, with interest rates rising and fees falling. And 2023, in particular, was good to bank account holders. In fact, those with deposit accounts netted 5.​25 times more in interest than in 2022."

The blog states, "Banks paid out $​315.​4 billion to domestic deposit accounts in 2023, according to our analysis of quarterly Federal Deposit Insurance Corp. (​FDIC) filings. This contrasts sharply with the $​78.​7 billion paid out in 2022. That equates to a year-​over-​year increase of 301.​0%.... Each deposit account earned an average of $​440.​54 in 2023, 384.​2% more than an average of $​90.​99 in 2022. These deposit accounts include demand deposit accounts (​such as checking accounts), savings deposit accounts, time deposits (​such as certificates of deposit) and certain retirement savings accounts."

It also says, "By quarter in 2023, accounts went from earning an average of $​84.​02 in interest in the first quarter to $​132.​59 in the fourth quarter.... That increase is part of a larger trend: In last year'​s deposit account interest study, we found that banks paid out 223.​1% more in interest in 2022 than in 2021."

The piece quotes DepositAccounts founder Ken Tumin, "The Fed raised its benchmark interest rate in 2022 by 425 basis points, the largest annual increase since 1980.... Most of the increases came in the second half of 2022, and banks took some time before they increased deposit rates based on Fed rate increases. Thus, most of the impact of the Fed interest rate increases on deposit rates came in 2023."

Separately, Federated Hermes' latest monthly update from Money Market CIO Deborah Cunningham is titled, "Investing in the now: The Fed is not feeling pressure to cut rates." It says, "​The Federal Reserve will eventually lower rates, but based on the March FOMC meeting, that is down the road. The situation means this remarkable period in cash management history could stretch for many more months, keeping yields attractive and assets growing."

Cunningham writes, "[​The] supply of Treasuries might be a little tighter in the second quarter as the U.​S. Treasury receives tax payments, but that should not have a material impact. Speaking of taxes, the tax-​adjusted value of municipal money funds across the industry for those in the top tax brackets is compelling, and SIFMA has been less volatile of late."

She adds, "​A final reminder that the next compliance stage of the new SEC money market rules arrives tomorrow. Money funds must maintain at least 25% in daily liquid assets (​previously 10%) and at least 50% in weekly liquid assets (​previously 30%). Tax-​exempt money funds are not subject to the daily requirement."

​

The Securities and Exchange Commission'​s latest monthly "Money Market Fund Statistics" summary shows that total money fund assets jumped by $​65.​9 billion in February to a record $​6.​525 trillion. The SEC shows Prime MMFs rising $​33.​5 billion in February to $​1.​407 trillion, Govt & Treasury funds increasing $​33.​1 billion to $​4.​993 trillion and Tax Exempt funds decreasing $​0.​7 billion to $​126.​1 billion. Taxable yields inched lower in February after falling in January. The SEC'​s Division of Investment Management summarizes monthly Form N-​MFP data and includes asset totals and averages for yields, liquidity levels, WAMs, WALs, holdings, and other money market fund trends. We review their latest numbers below. (Month-​to-​date in March through 3/​28, total money fund assets decreased by $​68.​8 billion to $​6.​397 trillion, according to our separate, and slightly smaller, MFI Daily series.)

February'​s overall asset increase follows an increase of $​87.​7 billion in January, $​34.​0 billion in December and $​225.​7 billion in November. MMFs decreased $​41.​2 billion in October, but increased $​79.​7 billion in September, $​114.​2 billion in August and $​28.​8 billion in July. Assets rose $​19.​6 billion in June, $​156.​6 billion in May, $​49.​9 billion in April and $​364.​4 billion in March. Over the 12 months through 2/​29/​24, total MMF assets increased by a record $​1.​185 trillion, or 22.​2%, according to the SEC'​s series.

The SEC'​s stats show that of the $​6.​525 trillion in assets, $​1.​407 trillion was in Prime funds, up $​33.​5 billion in February. Prime assets were up $​52.​5 billion in January, $​1.​2 billion in December, $​32.​5 billion in November, $​13.​9 billion in October, $​14.​3 billion in September, $​18.​5 billion in August, $​28.​9 billion in July, $​11.​0 billion in June, $​13.​7 billion in May and $​36.​0 billion in April, but were down $​22.​2 billion in March. Prime funds represented 21.​6% of total assets at the end of February. They'​ve increased by $​233.​9 billion, or 19.​9%, over the past 12 months. (Note that the SEC'​s series includes a number of internal money funds not tracked by ICI, though Crane Data includes most of these assets in its collections.)

Government & Treasury funds totaled $​4.​993 trillion, or 76.​5% of assets. They increased $​33.​1 billion in February, $​39.​7 billion in January, $​31.​7 billion in December, $​193.​7 billion in November, decreased $​62.​4 billion in October, increased $​64.​6 billion in September, $​92.​2 billion in August, $​3.​1 billion in July, $​4.​9 billion in June, $​137.​4 billion in May, $​19.​3 billion in April and $​387.​9 billion in March. Govt & Treasury MMFs are up $​945.​2 billion over 12 months, or 23.​4%. Tax Exempt Funds decreased $​0.​7 billion to $​126.​1 billion, or 1.​9% of all assets. The number of money funds was 291 in February, up 1 from the previous month and down 2 funds from a year earlier.

Yields for Taxable MMFs inched lower while Tax Exempt MMFs dropped in February. The Weighted Average Gross 7-​Day Yield for Prime Institutional Funds on Feb. 29 was 5.​45%, down 4 bps from the prior month. The Weighted Average Gross 7-​Day Yield for Prime Retail MMFs was 5.​52%, down 3 bps from the previous month. Gross yields were 5.​38% for Government Funds, down 1 bp from last month. Gross yields for Treasury Funds were down 1 bp at 5.​37%. Gross Yields for Tax Exempt Institutional MMFs were down 106 basis points to 3.​24% in February. Gross Yields for Tax Exempt Retail funds were down 94 bps to 3.​30%.

The Weighted Average 7-​Day Net Yield for Prime Institutional MMFs was 5.​39%, down 2 basis points from the previous month and up 74 bps from 2/​28/​23. The Average Net Yield for Prime Retail Funds was 5.​25%, down 3 bps from the previous month, and up 72 bps since 2/​28/​23. Net yields were 5.​13% for Government Funds, down 2 bps from last month. Net yields for Treasury Funds were down 1 bp from the previous month at 5.​15%. Net Yields for Tax Exempt Institutional MMFs were down 105 bps from January to 3.​14%. Net Yields for Tax Exempt Retail funds were down 95 bps at 3.​05% in February. (​Note: These averages are asset-​weighted.)

WALs and WAMs were mixed in February. The average Weighted Average Life, or WAL, was 49.​3 days (​up 0.​9 days) for Prime Institutional funds, and 48.​0 days for Prime Retail funds (​up 3.​5 days). Government fund WALs averaged 88.​1 days (​up 3.​7 days) while Treasury fund WALs averaged 81.​9 days (​up 1.​5 days). Tax Exempt Institutional fund WALs were 6.​3 days (​down 0.​1 days), and Tax Exempt Retail MMF WALs averaged 25.​3 days (​down 0.​6 days).

The Weighted Average Maturity, or WAM, was 31.​9 days (​up 0.​2 days from the previous month) for Prime Institutional funds, 33.​2 days (​up 3.​6 days from the previous month) for Prime Retail funds, 38.​6 days (​up 3.​3 days from previous month) for Government funds, and 45.​8 days (​up 1.​6 days from previous month) for Treasury funds. Tax Exempt Inst WAMs were down 0.​1 days to 6.​3 days, while Tax Exempt Retail WAMs were down 0.​6 days from previous month at 24.​5 days.

Total Daily Liquid Assets for Prime Institutional funds were 56.​6% in February (​up 2.​8% from the previous month), and DLA for Prime Retail funds was 41.​6% (​down 2.​2% from previous month) as a percent of total assets. The average DLA was 68.​0% for Govt MMFs and 94.​9% for Treasury MMFs. Total Weekly Liquid Assets was 70.​0% (​up 2.​2% from the previous month) for Prime Institutional MMFs, and 60.​4% (​up 1.​3% from the previous month) for Prime Retail funds. Average WLA was 80.​4% for Govt MMFs and 99.​3% for Treasury MMFs.

In the SEC'​s "Prime Holdings of Bank-​Related Securities by Country table for February 2024," the largest entries included: the U.​S. with $​168.​6B, Canada with $​159.​7 billion, Japan with $​133.​4 billion, France with $​105.​8 billion, the U.​K. with $​54.​3B, the Netherlands with $​47.​6B, Aust/​NZ with $​40.​3B, Germany with $​35.​3B and Switzerland with $​7.​6B. The gainers among the "Prime MMF Holdings by Country" included: Netherlands (​up $​7.​1B), the U.​S. (​up $​6.​1B) and Aust/​NZ (​up $​1.​2B). Decreases were shown by: the U.​K. (​down $​5.​7B), France (​down $​4.​3B), Germany (​down $​2.​6B), Japan (​down $​1.​3B), Switzerland (​down $​1.​0B) and Canada (​down $​0.​7B).

The SEC'​s "Prime Holdings of Bank-​Related Securities by Region" table shows The Americas had $​328.​3 billion (​up $​5.​4B), while Eurozone had $​210.​7B (​up $​0.​2B). Asia Pacific subset had $​199.​2B (​down $​1.​4B), while Europe (​non-​Eurozone) had $​139.​5B (​down $​1.​5B from last month).

The "​Prime MMF Aggregate Product Exposures" chart shows that of the $​1.​397 trillion in Prime MMF Portfolios as of Feb. 29, $​594.​7B (​42.​6%) was in Government & Treasury securities (​direct and repo) (​up from $​569.​2B), $​381.​9B (​27.​3%) was in CDs and Time Deposits (​up from $​373.​5B), $​198.​7B (​14.​2%) was in Financial Company CP (​down from $​199.​4B), $​144.​1B (​10.​3%) was held in Non-​Financial CP and Other securities (​down from $​144.​2B), and $​77.​4B (​5.​5%) was in ABCP (​up from $​76.​3B).

The SEC'​s "Government and Treasury Funds Bank Repo Counterparties by Country" table shows the U.​S. with $​421.​0 billion, Canada with $​204.​4 billion, France with $​183.​5 billion, the U.​K. with $​144.​1 billion, Germany with $​21.​2 billion, Japan with $​140.​9 billion and Other with $​43.​2 billion. All MMF Repo with the Federal Reserve was down $​16.​4 billion in February to $​1.​158 billion.

Finally, a "Percent of Securities with Greater than 179 Days to Maturity" table shows Prime Inst MMFs 6.​9%, Prime Retail MMFs with 6.​6%, Tax Exempt Inst MMFs with 0.​1%, Tax Exempt Retail MMFs with 3.​4%, Govt MMFs with 15.​8% and Treasury MMFs with 12.​0%.

​

The Investment Company Institute, the trade group for the mutual fund industry, published its latest weekly "Money Market Fund Assets" report and its latest monthly "Trends in Mutual Fund Investing" and "Month-​End Portfolio Holdings of Taxable Money Funds" for February 2024 on Thursday. The former shows money market mutual fund assets inching lower to $​6.​041 trillion in the latest week after a big decline the previous week, which included the March 15 quarterly corporate tax date. MMF assets are up by $​154 billion, or 3.​3%, year-​to-​date in 2024 (​through 3/​27/​24), with Institutional MMFs up $​41 billion, or 1.​3% and Retail MMFs up $​114 billion, or 6.​8%. Over the past 52 weeks, money funds have risen a massive $​843 billion, or 16.​2%, with Retail MMFs rising by $​530 billion (​28.​3%) and Inst MMFs rising by $​312 billion (​9.​4%). (Note: Thanks again to those who attended our Bond Fund Symposium earlier this week in Philadelphia! Attendees and Crane Data subscribers may access the conference binder, Powerpoints and recordings (​after the show) via our "Bond Fund Symposium 2024 Download Center.")

The weekly release says, "Total money market fund assets decreased by $​5.​68 billion to $​6.​04 trillion for the week ended Wednesday, March 27, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $​10.​26 billion and prime funds increased by $​4.​52 billion. Tax-​exempt money market funds increased by $​59 million." ICI'​s stats show Institutional MMFs falling $​10.​0 billion and Retail MMFs rising $​4.​3 billion in the latest week. Total Government MMF assets, including Treasury funds, were $​4.​896 trillion (​81.​0% of all money funds), while Total Prime MMFs were $​1.​024 trillion (​17.​0%). Tax Exempt MMFs totaled $​121.​3 billion (​2.​0%).

ICI explains, "Assets of retail money market funds increased by $​4.​31 billion to $​2.​40 trillion. Among retail funds, government money market fund assets increased by $​2.​14 billion to $​1.​54 trillion, prime money market fund assets increased by $​1.​70 billion to $​749.​96 billion, and tax-​exempt fund assets increased by $​468 million to $​110.​56 billion." Retail assets account for over a third of total assets, or 39.​8%, and Government Retail assets make up 64.​2% of all Retail MMFs.

They add, "Assets of institutional money market funds decreased by $​9.​99 billion to $​3.​64 trillion. Among institutional funds, government money market fund assets decreased by $​12.​40 billion to $​3.​35 trillion, prime money market fund assets increased by $​2.​82 billion to $​273.​99 billion, and tax-​exempt fund assets decreased by $​409 million to $​10.​70 billion." Institutional assets accounted for 60.​2% of all MMF assets, with Government Institutional assets making up 92.​2% of all institutional MMF totals.

According to Crane Data'​s separate Money Fund Intelligence Daily series, money fund assets have fallen by $​6.​7 billion in March (​through 3/​27) to $​6.​460 trillion (​they were a record $​6.​519 trillion on 3/​12). Assets rose $​72.​1 billion in February, $​93.​9 billion in January, $​32.​7 billion in December and $​226.​4 billion in November. MMF totals fell by $​31.​9 billion in October. They rose $​93.​9 billion in September, $​98.​3 billion in August and $​34.​7 billion in July. Note that ICI'​s asset totals don'​t include a number of funds tracked by the SEC and Crane Data, so they'​re over $​400 billion lower than Crane'​s asset series.

ICI'​s monthly Trends shows money fund totals rising $​55.​1 billion in February to a record $​6.​057 trillion (​after a jump in January, December and November, a decrease in October, and increases in September, August, July, June, May and April). Prior to this, the March 2023 jump (​a $​371.​0 billion increase) was the third largest monthly increase ever and the largest in history if you exclude 2 coronavirus lockdown panic months in March and April 2020. Bond fund assets increased $​3.​2 billion to $​4.​783 trillion, and bond ETF assets inched lower but remained above the $​1.​5 trillion level (​after passing it for the first time ever the month prior).

MMFs have increased by $​1.​190 trillion, or 24.​4%, over the past 12 months (​according to ICI'​s Trends through 2/​29). Money funds' February asset increase follows an increase of $​82.​4 billion in January, $​34.​9 billion in December, $​213.​9 billion in November, a decrease of $​13.​6 billion in October and gains of $​74.​1 billion in September, $​123.​9 billion in August $​31.​4 billion in July, $​30.​6 billion in June, $​172.​7 billion in May, $​8.​4 billion in April, $​371.​0 billion in March, $​60.​0 billion in February and $​31.​5 billion in January. Money fund assets surpassed bond fund assets in September 2022 for the first time since 2010 and they continued to hold a sizeable lead last month. (​The bond fund totals don'​t include bond ETFs, which total $​1.​509 trillion as of 2/​29, according to ICI.)

ICI'​s monthly release states, "The combined assets of the nation'​s mutual funds increased $​720.​68 billion, or 2.​8 percent, to $​26.​38 trillion in February, according to the Investment Company Institute'​s official survey of the mutual fund industry. In the survey, mutual fund companies report actual assets, sales, and redemptions to ICI.... Bond funds had an inflow of $​37.​71 billion in February, compared with an inflow of $​32.​65 billion in January.... Money market funds had an inflow of $​38.​16 billion in February, compared with an inflow of $​61.​50 billion in January. In January funds offered primarily to institutions had an inflow of $​26.​00 billion and funds offered primarily to individuals had an inflow of $​12.​15 billion."

The Institute'​s latest statistics show that Taxable MMFs were higher while Tax Exempt MMFs were unchanged last month. Taxable MMFs increased by $​55.​0 billion in February to $​5.​938 trillion. Tax-​Exempt MMFs remain at $​119.​1 billion. Taxable MMF assets increased year-​over-​year by $​1.​184 trillion (​24.​9%), and Tax-​Exempt funds rose by $​5.​6 billion over the past year (​4.​9%). Bond fund assets increased by $​3.​2 billion (​after increasing $​34.​5 billion in January) to $​4.​783 trillion; they'​ve increased by $​214.​8 billion (​4.​7%) over the past year.

Money funds represent 23.​0% of all mutual fund assets (​down 0.​4% from the previous month), while bond funds account for 18.​1%, according to ICI. The total number of money market funds was 272, down 2 from the prior month and down from 281 a year ago. Taxable money funds numbered 227 funds, and tax-​exempt money funds numbered 45 funds.

ICI'​s "Month-​End Portfolio Holdings" confirms a jump in Treasuries and CDs last month. Treasury holdings in Taxable money funds increased last month; they moved up to the largest composition segment in February. Treasury holdings increased $​186.​3 billion, or 8.​4%, to $​2.​410 trillion, or 40.​6% of holdings. Treasury securities have increased by $​1.​457 billion, or 153.​0%, over the past 12 months. (​See our Mar. 12 News, "March MF Portfolio Holdings Show Another Treasury Jump, Repo Plunge.")

Repurchase Agreements dropped down to the second largest composition segment in February having decreased $​138.​6 billion, or -​5.​9%, to $​2.​230 trillion, or 37.​6% of holdings. Repo holdings have decreased $​517.​6 billion, or -​18.​8%, over the past year. U.​S. Government Agency securities were the third largest segment; they decreased $​13.​0 billion, or -​1.​8%, to $​690.​7 billion, or 11.​6% of holdings. Agency holdings have increased by $​152.​1 billion, or 28.​2%, over the past 12 months.

Certificates of Deposit (​CDs) remained in fourth place; they increased by $​5.​5 billion, or 1.​6%, to $​349.​2 billion (​5.​9% of assets). CDs held by money funds rose by $​95.​2 billion, or 37.​5%, over 12 months. Commercial Paper remained in fifth place, up $​5.​5 billion, or 2.​2%, to $​255.​8 billion (​4.​3% of assets). CP increased $​56.​8 billion, or 28.​6%, over one year. Other holdings decreased to $​20.​5 billion (​0.​3% of assets), while Notes (​including Corporate and Bank) decreased to $​4.​2 billion (​0.​1% of assets).

The Number of Accounts Outstanding in ICI'​s series for taxable money funds increased to 65.​940 million, while the Number of Funds was down 2 at 227. Over the past 12 months, the number of accounts rose by 6.​027 million and the number of funds decreased by 5. The Average Maturity of Portfolios was 40 days, up 3 from January. Over the past 12 months, WAMs of Taxable money have increased by 26.

Money Market News Archive