News Archives: June, 2024

The Investment Company Institute published its latest weekly "Money Market Fund Assets" report Thursday, as well as its latest "Trends in Mutual Fund Investing" for May 2024. (Its monthly "Month-End Portfolio Holdings of Taxable Money Funds" wasn't available yesterday so isn't included in today's News.) The former shows money market mutual fund assets rising to $6.103 trillion, after dipping last week and rising the previous 8 weeks before that. MMF assets are up by $216 billion, or 4.6%, year-to-date in 2024 (through 6/26/24), with Institutional MMFs up $52 billion, or 1.7% and Retail MMFs up $164 billion, or 9.8%. Over the past 52 weeks, money funds have risen by $672 billion, or 12.4%, with Retail MMFs up by $454 billion (22.7%) and Inst MMFs rising by $218 billion (6.3%).

The weekly release says, "Total money market fund assets increased by $4.97 billion to $6.10 trillion for the eight-day period ended Wednesday, June 26, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $6.26 billion and prime funds decreased by $2.38 billion. Tax-exempt money market funds increased by $1.09 billion." ICI's stats show Institutional MMFs increasing $7.3 billion and Retail MMFs falling $2.3 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.930 trillion (80.8% of all money funds), while Total Prime MMFs were $1.043 trillion (17.1%). Tax Exempt MMFs totaled $129.1 billion (2.1%).

ICI explains, "Assets of retail money market funds decreased by $2.31 billion to $2.45 trillion. Among retail funds, government money market fund assets decreased by $3.38 billion to $1.56 trillion, prime money market fund assets decreased by $117 million to $773.75 billion, and tax-exempt fund assets increased by $1.18 billion to $117.53 billion." Retail assets account for over a third of total assets, or 40.2%, and Government Retail assets make up 63.7% of all Retail MMFs.

They add, "Assets of institutional money market funds increased by $7.28 billion to $3.65 trillion. Among institutional funds, government money market fund assets increased by $9.64 billion to $3.37 trillion, prime money market fund assets decreased by $2.26 billion to $269.49 billion, and tax-exempt fund assets decreased by $92 million to $11.54 billion." Institutional assets accounted for 59.8% of all MMF assets, with Government Institutional assets making up 92.3% of all institutional MMF totals.

According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $23.2 billion in June (through 6/26) to $6.496 trillion. (They hit a record $6.538 trillion on 4/2, so our assets series has yet to reclaim record levels.) Assets rose by $91.4 billion in May, fell $15.8 billion in April and $68.8 billion in March. But they 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 $90.9 billion in May to $6.079 trillion (after an increase in April, a drop in March and a jump in February, January, December and November, a decrease in October, and increases in September, August, July, and June). 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 $60.6 billion to $4.832 trillion, and bond ETF assets increased and still remain above the $1.5 trillion level (after passing it for the first time ever 5 months ago).

MMFs have increased by $659.6 billion, or 12.2%, over the past 12 months (according to ICI's Trends through 5/31). Money funds' May asset increase follows an increase of $4.3 billion in April, a decrease of $73.0 billion in March, an increase of $55.1 billion in February, $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 $1.559 trillion as of 5/31, according to ICI.)

ICI's monthly release states, "The combined assets of the nation's mutual funds increased by $733.74 billion, or 2.8 percent, to $26.78 trillion in May, 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 $7.83 billion in May, compared with an inflow of $7.89 billion in April.... Money market funds had an inflow of $74.16 billion in May, compared with an outflow of $14.91 billion in April. In May funds offered primarily to institutions had an inflow of $53.00 billion and funds offered primarily to individuals had an inflow of $21.16 billion."

The Institute's latest statistics show that Taxable MMFs and Tax Exempt MMFs were both higher from last month. Taxable MMFs increased by $86.6 billion in May to $5.950 trillion. Tax-Exempt MMFs increased $4.3 billion to $129.5 billion. Taxable MMF assets increased year-over-year by $642.4 billion (12.1%), and Tax-Exempt funds rose by $17.1 billion over the past year (15.2%). Bond fund assets increased by $60.6 billion (after decreasing by $75.2 billion in April) to $4.832 trillion; they've increased by $216.9 billion (4.7%) over the past year.

Money funds represent 22.7% of all mutual fund assets (down 0.3% from the previous month), while bond funds account for 18.0%, according to ICI. The total number of money market funds was 276, unchanged from the prior month and down from 280 a year ago. Taxable money funds numbered 231 funds, and tax-exempt money funds numbered 45 funds.

We wrote earlier this week on the "2024 AFP Liquidity Survey." (See our June 24 News, "AFP 2024 Liquidity Survey: Cash Still King Among Corporates, Increasing.") Today, we continue our excerpts from the annual survey of corporate investors' cash habits. Discussing "Current Allocations of Short-Term Investments," AFP says, "Companies maintain their investments in relatively few vehicles. Organizations invest in an average 2.7 vehicles for their cash and short-term investments -- unchanged from the average reported in 2023. Most organizations continue to allocate a large share of their short-term investment balances -- an average of 83% — in safe and liquid investment vehicles: bank deposits, money market funds (MMFs) and Treasury securities. This result is four percentage points higher than the 79% reported in 2023 -- and the highest percentage on record since AFP began tracking the data. The typical organization currently maintains 47% of its short-term investments in bank deposits. This allocation is the same as reported last year (2023) but is 8 percentage points lower than the 55% reported in 2022, and lower than both the 52% reported in 2021 and the 51% in 2020. This year's allocation is similar to percentages reported in 2019 (46%) and 2018 (49%)."

They explain, "The larger shares of short-term investments allocated to bank deposits for 2020-2022 were likely due to the liquidity and cash flow crisis during the pandemic. Post pandemic, the economy regained stability; that could explain the decline in bank deposits in 2023. However, the regional banking crisis in the spring of 2023 also likely contributed to the 47% allocation in bank deposits. Organizations were focused on the concentration of risks in their bank deposits. It appears that treasury practitioners continue to be cautious and are diversifying their organizations' deposits."

AFP writes, "The allocations in Government/Treasury money market mutual funds increased by 1.8 percentage points to 19.8% in 2023; the allocation is higher for larger, publicly held companies and net investor companies than for other organizations. Investment allocation to Treasury securities (includes bills, notes and bonds) is 12.4%. This allocation is more common for companies with annual revenue less than $1 billion and for those that are net investors, investment grade and privately held than for other organizations. Overall, as deposits remained stable, allocations to Government/Treasury money funds and Treasury securities increased, driving the larger allocation in the top three investment selections overall. These shifts in investment vehicles signal that organizations continue to be cautious and are leaning towards allocating their investments in those vehicles which offer stability and safety -- especially in the wake of the regional banking crisis."

A sidebar on "Mandatory Liquidity Fee Filing[s]," says, "In July of 2023, the Securities and Exchange Commission (SEC) adopted amendments to certain rules that govern money market funds under the Investment Company Act of 1940. The amendments will increase minimum liquidity requirements for money market funds to provide a more substantial liquidity buffer in the event of rapid redemptions.... The amendments will also remove provisions in the current rule that permit a money market fund to suspend redemptions temporarily through a gate, and allow money market funds to impose liquidity fees if their weekly liquid assets fall below a certain threshold. These changes are designed to reduce the risk of investor 'runs' on money market funds during periods of market stress. These amendments go into effect on October 2, 2024."

It continues, "To address concerns about redemption costs and liquidity, the amendments will require institutional Prime and institutional tax-exempt money market funds to impose liquidity fees when a fund experiences daily net redemptions that exceed 5% of net assets, unless the fund's liquidity costs are de minimis. In addition, the amendments will require any non-government money market fund to impose a discretionary liquidity fee if the board determines that a fee is in the best interest of the fund. These amendments are designed to protect remaining shareholders from dilution and to allocate costs more fairly so that shareholders bear the costs of redeeming from the fund when liquidity in underlying short-term funding markets is costly."

AFP adds, "A majority of organizations does not have Prime-fund exposure, and 32% are taking a wait-and-see approach. The views of the remaining 14% are divided between increasing, decreasing or eliminating Prime-fund exposure. Prime funds account for only 4% of current investment allocations, so the impact from corporate investors would be minimal. Due to the complexity of the ability to mandate a liquidity fee, many investment firms are exiting Prime funds. For the almost one-third of Prime holders taking a wait-and-see approach, their decision to exit Prime funds might ultimately boil down to timing -- i.e., when their current Prime funds will likely exit the market. Most Prime funds are transitioning to Government funds, so it is likely that is where the allocation change will be."

A section on "Money Market Funds," tells us, "Various drivers play a role in the selection of money market funds. The three factors that play the most important role are fund ratings, yield and fees. Sixty-two percent of treasury and finance professionals cite fund ratings as a primary driver (among the top three drivers), while 63% cite yield and 35% cite fees as having a significant role when selecting a mutual fund. While safety, liquidity and yield rank first, second and third as guiding investment objectives overall, this year's survey results show that organizations evaluate money funds similarly to bank deposits. The funds utilized are predominantly Government money market funds. Safety and security are well understood by many -- obligations of the U.S. government with a stable NAV; but with the banking crisis in the rear-view mirror, the desire to manage quality via fund ratings is likely a main reason. Treasury practitioners also want to make sure the underlying investments in a fund are all within an investment policy scope."

AFP concludes, "Over 40% of organizations' cash holdings increased within the U.S. in the past 12 months (through March 2024). The share of those respondents reporting a decrease in their companies' cash holdings within the U.S is 13% in the current survey. This result suggests organizations are being cautious and holding onto cash balances, implying some trepidation on their part. Slightly less than half of respondents anticipates that their organizations' current cash and short-term investment holdings will remain the same during the second and third quarters of 2024 (i.e., April 2024 through September 2024). Nearly one-third of respondents expects that their companies' current cash and short-term investment holdings will increase, while 20% predict a decrease in the second and third quarters of 2024. High interest rates and uncertainty in the economy are likely driving organizations to build their cash and short-term investment holdings."

They explain, "Changes in cash holdings appear to be driven by various factors. A large majority of respondents report that increased operating cash flow has had either a significant impact or some impact on the increase in their organizations' cash holdings in the past 12 months. Nearly 60% of survey respondents report that inflationary impacts have had either a significant impact or some impact on the decrease in their organizations' cash holdings in the past 12 months (ending in March 2024), while about half indicates that increased capital expenditures has had either a significant impact or some impact on the decrease in cash holdings during the same time period. Organizations are continuously working to balance their desire for safety and liquidity against a competitive rate of return. Safety continues to be the most-valued short-term investment objective for 65% of organizations. This is expected, given the high interest-rate environment and the possibility of inflation continuing to be a threat along with further interest-rate increases by the Federal Reserve."

Finally, the survey says, "As a result of the banking crisis in 2023, over 40% of organizations moved deposits from regional banks to larger banks, while 35% diversified their deposits across a greater number of banks to spread the risk in the event of a bank failure. Other steps taken to protect bank deposits were moving deposits to money funds and moving bank deposits to other forms of bank deposit products (25%). Most organizations continue to allocate a large share of their short-term investment balances -- 80% -- in safe and liquid investment vehicles: bank deposits, money market funds (MMFs) and Treasury securities.... The next 12-18 months will be crucial for treasury professionals as they manage their organizations' cash and short-term investments in an uncertain economic environment. As the White House deals with two conflicts overseas ... there is also the unknown of whether the economy will be sufficiently stable to drive the Federal Reserve to begin lowering the federal funds rate."

The Investment Company Institute published, "Worldwide Regulated Open-Fund Assets and Flows, First Quarter 2024," this week, which shows that money fund assets globally fell by $35.6 billion, or -0.3%, in Q1'24 to $10.405 trillion. But the series excluded Australia's 6th largest $286.7 billion, so assets would have increased by $236.8 billion (or 2.3%) with Australia included. Increases were led by a sharp jump in money funds in U.S. and China, while Luxembourg and Mexico also rose. Meanwhile, money funds in Ireland and Chile were lower. MMF assets worldwide increased by $944.5 billion, or 10.0%, in the 12 months through 3/31/24, and money funds in the U.S. now represent 57.5% of worldwide assets. We review the latest Worldwide MMF totals, below.

ICI's release says, "Worldwide regulated open-end fund assets increased 0.5 percent to $69.17 trillion at the end of the first quarter of 2024, excluding funds of funds. Worldwide net cash inflow to all funds was $814 billion in the first quarter, compared with $674 billion of net inflows in 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), the organization of national fund associations. The collection for the first quarter of 2024 contains statistics from 44 jurisdictions."

It explains, "The growth rate of total regulated open-end fund assets reported in US dollars was decreased by US dollar appreciation over the first quarter of 2024. For example, on a US dollar–denominated basis, fund assets in Europe increased by 2.3 percent in the first quarter, compared with an increase of 4.5 percent on a euro-denominated basis."

ICI's quarterly continues, "On a US dollar–denominated basis, equity fund assets increased by 4.1 percent to $33.08 trillion at the end of the first quarter of 2024. Bond fund assets increased by 0.8 percent to $13.00 trillion in the first quarter. Balanced/mixed fund assets increased by 0.5 percent to $7.33 trillion in the first quarter, while money market fund assets decreased by 0.3 percent globally to $10.41 trillion."

The release also tells us, "At the end of the first quarter of 2024, 48% of worldwide regulated open-end fund assets were held in equity funds. The asset share of bond funds was 19% and the asset share of balanced/mixed funds was 11%. Money market fund assets represented 15% of the worldwide total. By region, 57% of worldwide assets were in the Americas in the first quarter of 2024, 32% were in Europe, and 11 percent were in Africa and the Asia-Pacific regions."

ICI adds, "Net sales of regulated open-end funds worldwide were $814 billion in the first quarter of 2024.... Globally, bond funds posted an inflow of $367 billion in the first quarter of 2024, after recording an inflow of $147 billion in the fourth quarter.... Money market funds worldwide experienced an inflow of $277 billion in the first quarter of 2024 after registering an inflow of $358 billion in the fourth quarter of 2023."

According to Crane Data's analysis of ICI's "Worldwide" fund data, the U.S. sustained its position as the largest money fund market in Q1'24 with $5.984 trillion, or 57.5% of all global MMF assets. U.S. MMF assets increased by $64.5 billion (1.1%) in Q1'24 and have increased by $745.5 billion (14.2%) in the 12 months through March 31, 2024. China remained in second place among countries overall. China saw assets increase $141.2 billion (8.9%) in Q1 to $1.730 trillion (16.6% of worldwide assets). Over the 12 months through March 31, 2024, Chinese MMF assets have increased by $135.0 billion, or 8.5%.

Ireland remained third among country rankings, ending Q1 with $783.5 billion (7.5% of worldwide assets). Irish MMFs were down $22.9B for the quarter, or -2.8%, and up $65.0B, or 9.0%, over the last 12 months. Luxembourg remained in fourth place with $575.6 billion (5.5% of worldwide assets). Assets there increased $4.8 billion, or 0.8%, in Q1, and were up $85.0 billion, or 17.3%, over one year. France was in fifth place with $479.3B, or 4.6% of the total, up $19.6 billion in Q1 (4.3%) and up $65.8B (15.9%) over 12 months.

Australia was listed (by us) in sixth place with $268.7 billion, or 2.6% of worldwide assets. Its MMF data was unavailable for Q1 so we kept the Q4 numbers. Korea was the 7th ranked country and saw MMF assets increase $9.3 billion, or 7.0%, in Q1'24 to $142.6 billion (1.4% of the total); they've increased $4.7 billion (3.4%) for the year. Mexico moved up to 8th place with $135.3 billion (1.3%); assets there increased $10.5 billion (8.5%) in Q1 and increased by $35.8 billion (36.0%) over 12 months. Brazil fell to 9th place, as assets increased $4.1 billion, or 3.2%, to $129.1 billion (1.2% of total assets) in Q1. They've increased $18.4 billion (16.6%) over the previous 12 months. ICI's statistics show Japan was listed in 10th place with $102.5B, or 1.0% of total assets, down $4.3 billion (-4.0%) for the quarter.

India was in 11th place, decreasing $1.3 billion, or -2.1%, to $61.5 billion (0.6% of total assets) in Q1 and increasing $7.8 billion (14.5%) over the previous 12 months. Canada ($57.7B, down $172 million and up $14.7B over the quarter and year, respectively) ranked 12th ahead of Switzerland. ($39.6B, up $952M and up $5.7B). Chinese Taipei ($27.9B, down $291M and up $1.7B) and United Kingdom ($27.6B, down $508M and up $3.1B), rank 14th and 15th, respectively. Chile, South Africa, Argentina, Spain and Germany round out the 20 largest countries with money market mutual funds.

ICI's quarterly series shows money fund assets in the Americas total $6.357 trillion, up $76.2 billion in Q1. Asian MMFs decreased by $123.2 billion to $2.072 trillion, and Europe saw its money funds jump $11.6 billion in Q1'24 to $1.954 trillion. Africa saw its money funds decrease $194 million to $21.9 billion.

Note that Ireland and Luxembourg's totals are primarily "offshore" money funds marketed to global multinationals, while most of the other countries in the survey have mainly domestic money fund offerings. Contact us if you'd like our latest "Largest Money Market Funds Markets Worldwide" spreadsheet, based on ICI's data. (Let us know too if you'd like to see our latest Money Fund Intelligence International product, which tracks "offshore" money market funds domiciled in Europe and outside the U.S.)

A filing for the Morgan Stanley Institutional Liquidity Fund tells us in a "Supplement dated June 17, 2024 to the Morgan Stanley Institutional Liquidity Funds Impact Partner Class Summary Prospectus and Prospectus dated February 29, 2024 Money Market Portfolio," "Effective June 17, 2024, shares of the Fund are available to investment through the direct to fund company operating model on the portal hosted by Morgan Stanley Investment Management Inc. (CashInvest by Morgan Stanley). The Fund will continue to be available to investment through a Financial Intermediary (as defined below)." (Note: Please join us for our next conference, European Money Fund Symposium, which will take place Sept. 19-20, 2024 in London, England! Attendees and Crane Data subscribers may access our latest conference binder and materials via our "Money Fund Symposium 2024 Download Center.")

They explain, "Accordingly, on the Effective Date, the first paragraph of the section of the Summary Prospectus entitled 'Purchase and Sale of Fund Shares' and the Prospectus entitled 'Fund Summary -- Money Market Portfolio -- Purchase and Sale of Fund Shares' is hereby deleted in its entirety and replaced with the following: Investments in the Fund are limited to shareholder accounts beneficially owned by natural persons. Impact Partner Class shares of the Fund are available to investors who at the time of initial purchase make a minimum investment of $1 million and who invest in the Fund either through a full-service financial intermediary ... or using the direct to fund company operating model on the Adviser-hosted portal (CashInvest by Morgan Stanley). You may not be subject to the minimum investment requirement under certain circumstances."

The filing states, "Shares of the Fund may be purchased or sold on any day the New York Stock Exchange ('NYSE') is open for business (except when the following federal holidays are observed: Columbus Day and Veterans Day) by contacting a Financial Intermediary. You may also purchase and redeem shares online using the direct to fund company operating model on CashInvest by Morgan Stanley at www.morganstanley.com/liquidity, provided you have a pre-established Internet trading account."

It also says, "Additionally, on the Effective Date, the section of the Prospectus entitled 'Shareholder Information -- Minimum Investment Amount' is hereby deleted in its entirety and replaced with the following: Impact Partner Class shares are available to investors who at the time of initial purchase make a minimum investment of $1 million and who invest in the Fund either through a full-service financial intermediary ... or using the direct to fund company operating model on CashInvest by Morgan Stanley. The Adviser, in its sole discretion, may waive the minimum initial investment amount in certain cases including, but not limited to, shares of the Fund purchased through a financial intermediary or when the Adviser anticipates the combined value of a client's investments will meet or exceed the minimum."

Morgan Stanley adds, "Additionally, on the Effective Date, the first paragraph of the section of the Prospectus entitled 'Shareholder Information -- How to Purchase Shares' is hereby deleted in its entirety and replaced with the following: Impact Partner Class shares of the Fund may be purchased through a Financial Intermediary or using the direct to fund company operating model on CashInvest by Morgan Stanley."

Another Prospectus Supplement filing for the Morgan Stanley Institutional Liquidity Funds Prime Portfolio states, "Effective September 9, 2024 ..., the number of times and the time of day that the Fund determines its net asset value ('NAV') is amended from three times each business day, currently occurring at 8:00 a.m., 12:00 p.m. and 3:00 p.m. Eastern time, to one time each business day, which will be changed to 2:00 p.m. Eastern time. Also on the Effective Date, a corresponding change will be made to the final trade cut-off time and the time used to determine whether a shareholder is entitled to receive a dividend from the Fund from 3:00 p.m. Eastern time to 2:00 p.m. Eastern time."

It explains, "Accordingly, beginning on the Effective Date: (i) orders to purchase shares of the Fund must be received by the Fund prior to 2:00 p.m. Eastern time, and in accordance with the terms described in the Prospectus, to receive the NAV next determined; (ii) the NAV of the Fund will be determined once daily, normally 2:00 p.m. Eastern time, on each day that the New York Stock Exchange is open, except when the following federal holidays are observed: Columbus Day and Veterans Day; (iii) orders to sell shares (redemption requests) will be processed on the day on which they are received, provided that they are received prior to 2:00 p.m. Eastern time, and in accordance with the terms described in the Prospectus, to receive the NAV next determined; and (iv) for daily income dividend declaration purposes, if your purchase order is received in good order by the Fund prior to 2:00 p.m. Eastern time, then you will be a shareholder of record as of the same business day (i.e., on the day the trade settles)."

Finally, in related news, a filing for the UBS Select 100% US Treasury Preferred Fund and UBS Select 100% US Treasury Institutional Fund explains, "The purpose of this supplement is to update certain information for UBS Select 100% US Treasury Preferred Fund and UBS Select 100% US Treasury Institutional Fund, series of UBS Series Funds <b:>`_. First, at the recommendation of UBS Asset Management (Americas) LLC, each fund's administrator (and advisor to the related master fund), the Board of Trustees of the Trust approved extending the pricing times for the funds to until 3:00 p.m. (Eastern time), including hourly pricing points at 1:00 p.m. and 2:00 p.m. (Eastern time)."

UBS continues, "Second, this supplement updates certain information regarding the principal risks of the funds. Effective immediately, the prospectuses and SAI are hereby revised as follows: The section captioned 'Fund summary' and sub‑captioned 'Principal strategies -- Principal investments' for the fund in each prospectus is revised by replacing the third paragraph in its entirety with the following: The Fund will generally hold a portion of its assets in cash for operational purposes, including cash earning interest held at the fund’s custodian."

They write, "The section captioned 'Fund summary' and sub-captioned 'Principal risks' for the fund in each prospectus is revised by adding the following after 'US withholding tax risk' as a principal risk of the fund: Risk associated with the fund holding cash: The fund will generally hold a portion of its assets in cash for operational purposes. Cash positions may hurt performance and may subject the fund to additional risks and costs, such as increased exposure to the custodian bank holding the assets and fees imposed for large cash balances. In addition, interest income received by the fund from cash held at the custodian would not qualify for the state and local income tax exemption applicable to certain dividends paid by the fund that are derived from interest income with respect to US government securities."

The filing adds, "The section captioned 'More information about the fund' and sub-captioned 'Additional information about investment strategies' in each of the prospectuses is revised by inserting the following as the fourth sentence of the first paragraph of that section: Interest income received by the fund from cash held at the custodian would not qualify for the state and local income tax exemption applicable to certain dividends paid by the fund that are derived from interest income with respect to US government securities."

The Association for Financial Professionals, a group representing corporate treasurers, published its "2024 AFP Liquidity Survey" last week. (See AFP's press release.) The cover letter says, "Invesco is proud to once again partner with the Association of Financial Professionals (AFP) to sponsor the 19th annual AFP Liquidity Survey Report. This marks the fifth year that Invesco has sponsored this industry-leading exploration into current and emerging corporate cash management trends." Invesco's Laurie Brignac explains, "The cash management landscape has certainly evolved over the five years that Invesco has sponsored this report. Treasury professionals have adapted to multiple challenges during those five years including zero rates, banking challenges, Covid disruptions, geopolitical events, elevated inflation, and the highest rates in decades. A key theme that emerged in this year's report is the elevated levels of cash balances across most organizations, and expectations that this will continue to be the case."

AFP's Introduction tells us, "To understand current and emerging trends in organizations' cash and short-term investment holdings, as well as investment policies and strategies in the current economic environment, the Association for Financial Professionals (AFP) conducted its 19th annual AFP Liquidity Survey in March 2024. The survey generated 239 responses which are the basis of this report. Results from this survey will provide treasury and finance professionals with critical benchmarks on short-term investment holdings and strategies. AFP thanks Invesco for underwriting the 2024 AFP Liquidity Survey for the fifth consecutive year. The Research Department of AFP designed the survey questionnaire, analyzed the survey results and produced the report, and is solely responsible for its content."

Discussing "Cash and Short-Term Investments/Securities," the AFP says, "Forty-four percent of corporate practitioners report an increase in their organizations' cash holdings within the U.S. in the past 12 months (through March 2024) -- 8 percentage points higher than the 36% reported in the 2023 AFP Liquidity Survey Report. The share of those respondents reporting a decrease in their companies' cash holdings within the U.S decreased by 10 percentage points -- from 23% in last year's survey to 13% in the current survey. This result suggests organizations are holding on tightly to their cash balances, signaling some trepidation and caution on their part. Forty-three percent of respondents report that there was no significant change in their cash and short-term balances within the U.S. over the past 12 months, similar to the 41% reported last year."

They write, "The distribution of organizations' cash and short- term balances outside the U.S. is almost identical to what was reported in last year's Liquidity Survey. Sixty-one percent of respondents say that in the past 12 months their organizations' investments outside the U.S. were unchanged -- similar to the 62% reported last year. Twenty-four percent report an increase in cash and short-term balances, identical to the percentage reported in last year's survey, while 15% of organizations decreased cash and short-term balances outside the U.S., a slight uptick from the 14% in last year's report."

AFP's report continues, "These findings suggest the current economic environment is having a greater impact on investing patterns within the U.S. than outside. This could be attributed to companies' increased focus on working capital improvements, process efficiencies and the high interest-rate environment in the U.S. and its positive impact on interest income."

The survey also tells us, "Sixty-four percent of organizations hold some amount of cash outside of the U.S. -- higher than the 59% reported last year. Seventy-eight percent of publicly owned organizations hold cash outside of the U.S.; 14% of these companies hold at least half of their cash outside the U.S. A smaller share of privately held companies (65%) reports have cash and short-term investments outside the U.S. Seventy percent of large organizations -- those with at least $1 billion in annual revenue -- hold cash outside the U.S., significantly higher than the 52% of organizations with annual revenue less than $1 billion that do so. These findings suggest that larger companies as well as publicly owned ones are more likely to have cash in their operations outside the U.S. than are other organizations."

It continues, "Changes in cash holdings are driven by various factors. Eighty-two percent of respondents report that increased operating cash flow has had either a significant impact or some impact on the increase in their organizations' cash holdings in the past 12 months -- a 14-percentage-point increase from the 68% in last year's survey and exactly the same share reported in the 2022 survey report. Other drivers contributing to increased cash holdings at organizations include decreased capital expenditures (cited by 47% of respondents), increased debt outstanding/accessed best markets (44 %), domestic political/regulatory risks (40%) and paid back/retired debt/ movement of debt/freed up cash flow (38%). Additional drivers have impacted the increase in organizations' cash holdings: Economic outlook; Market demand for product; Proceeds from divestitures; Global interest rates/inflation."

The survey says, "Fifty-eight percent of survey respondents report that inflationary impacts have had either a significant impact or some impact on the decrease in their organizations' cash holdings in the past 12 months (ending in March 2024); 52% indicate that increased capital expenditures have had either a significant impact or some impact on the decrease in cash holdings during the same time period. Other drivers contributing to decreased cash holdings at organizations include paid back/retired debt (cited by 48% of survey respondents) and decreased operating cash flow (43%). Survey respondents are more optimistic than they were last year -- 52% of respondents cite increased capital expenditures as a reason for cash decreases, up from the 43% who held this view in 2023. Additionally, a smaller share of respondents this year believes inflationary impacts will decrease cash holdings (58% compared to 65%). Additional drivers have impacted the decrease in organizations' cash holdings: Labor costs; Cash pooling; Increase in interest rates/taxes; Investment market impact."

It comments, "Slightly less than half of respondents (49%) anticipates that their organizations' current cash and short-term investment holdings will remain the same during the second and third quarters of 2024 (i.e., April 2024 through September 2024). Thirty-one percent of respondents expect that their companies' current cash and short-term investment holdings will increase, while 20% predict a decrease in the second and third quarters of 2024. High interest rates and uncertainty in the economy are likely driving organizations to build their cash and short-term investment holdings."

A section titled, "Percentage or Dollar limits on Short-Term Investment Holdings by Asset Managers or Funds," tells us, "Twenty-nine percent of financial professionals report that their organizations have neither a percentage nor a dollar limit on short-term investment holdings by asset manager or fund. This result is 6 percentage points higher than the figure reported in 2023. Seventeen percent of companies impose dollar limits while 33% restrict short-term investment with percentage limits; the remaining 22% have a mix of both dollar and percentage limits."

It continues, "Dollar limits set specific levels of risk applicable to a fund or manager, and percentage limits allow for the changes to be proportionate to the portfolio as it grows/shrinks. Survey results indicate that a larger share of publicly owned companies sets both dollar and percentage limits compared to privately held companies. After the failures of three regional banks in the U.S. the spring of 2023, organizations are viewing their exposures more holistically, incorporating their deposit balances with banks into overall exposure limits and reviewing their product mix. The ultimate goal is to be aware of the total exposure to any underlying counterparty/bank and be able to pivot in the event credit risk changes."

The Investment Company Institute published its latest weekly "Money Market Fund Assets" report Thursday, which shows money market mutual fund assets falling to $6.098 trillion, after rising for the previous 8 weeks. MMF assets are up by $212 billion, or 4.5%, year-to-date in 2024 (through 6/18/24), with Institutional MMFs up $45 billion, or 1.5% and Retail MMFs up $167 billion, or 9.9%. Over the past 52 weeks, money funds have risen by $665 billion, or 12.2%, with Retail MMFs rising by $463 billion (23.2%) and Inst MMFs rising by $202 billion (5.9%). (Note: Thank you to those who attended our Money Fund Symposium last week in Pittsburgh! Attendees and Crane Data subscribers may access the conference binder and materials via our "Money Fund Symposium 2024 Download Center.")

The weekly release says, "Total money market fund assets decreased by $22.32 billion to $6.10 trillion for the six-day period ended Tuesday, June 18, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $21.45 billion and prime funds decreased by $177 million. Tax-exempt money market funds decreased by $692 million." ICI's stats show Institutional MMFs decreasing $30.3 billion and Retail MMFs rising $8.0 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.925 trillion (80.8% of all money funds), while Total Prime MMFs were $1.046 trillion (17.1%). Tax Exempt MMFs totaled $128.0 billion (2.1%).

ICI explains, "Assets of retail money market funds increased by $7.98 billion to $2.46 trillion. Among retail funds, government money market fund assets increased by $6.57 billion to $1.57 trillion, prime money market fund assets increased by $2.08 billion to $773.87 billion, and tax-exempt fund assets decreased by $669 million to $116.35 billion." Retail assets account for over a third of total assets, or 40.3%, and Government Retail assets make up 63.8% of all Retail MMFs.

They add, "Assets of institutional money market funds decreased by $30.30 billion to $3.64 trillion. Among institutional funds, government money market fund assets decreased by $28.02 billion to $3.36 trillion, prime money market fund assets decreased by $2.26 billion to $271.75 billion, and tax-exempt fund assets decreased by $23 million to $11.63 billion." Institutional assets accounted for 59.7% 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 risen by $7.3 billion in June (through 6/18) to $6.480 trillion. (They hit a record $6.538 trillion on 4/2, so our assets series has yet to reclaim record levels.) Assets rose by $91.4 billion in May, fell $15.8 billion in April and $68.8 billion in March. But they 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 related news, ICI also released its latest monthly "Money Market Fund Holdings" summary, which reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds.

This release says, "The Investment Company Institute (ICI) reports that, as of the final Friday in May, prime money market funds held 45.7 percent of their portfolios in daily liquid assets and 62.5 percent in weekly liquid assets, while government money market funds held 77.6 percent of their portfolios in daily liquid assets and 87.7 percent in weekly liquid assets." Prime DLA was up from 45.3% in April, and Prime WLA was up from 60.7%. Govt MMFs' DLA was down from 77.9% and Govt WLA decreased from 87.9% the previous month.

ICI explains, "At the end of May, prime funds had a weighted average maturity (WAM) of 32 days and a weighted average life (WAL) of 50 days. Average WAMs and WALs are asset-weighted. Government money market funds had a WAM of 37 days and a WAL of 84 days." Prime WAMs were 1 day longer and WALs were 2 days longer from the previous month. Govt WAMs were unchanged and WALs were 1 day longer from April.

Regarding Holdings by Region of Issuer, the release tells us, "Prime money market funds' holdings attributable to the Americas declined from $511.01 billion in April to $496.98 billion in May. Government money market funds' holdings attributable to the Americas rose from $4,319.26 billion in April to $4,405.24 billion in May."

The Prime Money Market Funds by Region of Issuer table shows Americas-related holdings at $497.0 billion, or 48.7%; Asia and Pacific at $167.5 billion, or 16.4%; Europe at $338.5 billion, or 33.1%; and, Other (including Supranational) at $18.3 billion, or 1.9%. The Government Money Market Funds by Region of Issuer table shows Americas at $4.405 trillion, or 89.1%; Asia and Pacific at $135.0 billion, or 2.7%; Europe at $380.4 billion, 7.7%, and Other (Including Supranational) at $24.3 billion, or 0.5%.

Finally, ICI also recently published a release, "Retirement Assets Total $39.9 Trillion in First Quarter 2024." It includes data tables showing that money market funds held in retirement accounts jumped to a record $780 billion (up from $764 billion) in the latest quarter, accounting for 13% of the total $5.984 trillion in money funds. MMFs represent just 6.2% of the total $12.624 trillion of mutual funds in retirement accounts.

This release says, "Total US retirement assets were $39.9 trillion as of March 31, 2024, up 4.3 percent from December 2023. Retirement assets accounted for 33 percent of all household financial assets in the United States at the end of March 2024. Assets in individual retirement accounts (IRAs) totaled $14.3 trillion at the end of the first quarter of 2024, an increase of 5.5 percent from the end of the fourth quarter of 2023. Defined contribution (DC) plan assets were $11.1 trillion at the end of the first quarter, up 5.3 percent from December 31, 2023. Government defined benefit (DB) plans—including federal, state, and local government plans—held $8.7 trillion in assets as of the end of March 2024, a 2.0 percent increase from the end of December 2023. Private-sector DB plans held $3.3 trillion in assets at the end of the first quarter of 2024, and annuity reserves outside of retirement accounts accounted for another $2.4 trillion."

The ICI tables also show money funds accounting for $579 billion, or 9%, of the $6.204 trillion in IRA mutual fund assets and $201 billion, or 3%, of the $6.420 trillion in defined contribution plan holdings. (Money funds in 401k plans totaled $134 billion, or 3% of the $5.083 trillion of mutual funds in 401k's.)

The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (a.k.a. "Flow of Funds") earlier this month. Among the 4 tables it includes on money market mutual funds, the First Quarter 2024 edition shows that Total MMF Assets increased by $83 billion to $6.441 trillion in Q1'24. The Household Sector, by far the largest investor segment with $4.025 trillion, saw the biggest asset increase in Q1, followed by Nonfinancial Corporate Businesses. The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also showed noticeable increases for the Other Financial Business (formerly Funding Corps) and Mutual Funds categories in Q1 2024. (Note: Thanks once more to those who attended our Money Fund Symposium last week in Pittsburgh! Attendees and Crane Data subscribers may access the conference binder and materials via our "Money Fund Symposium 2024 Download Center." Mark your calendars for next year's Money Fund Symposium, which is scheduled for June 23-25, 2025 in Boston, Mass.)

Private Pension Funds, Rest of World, Exchange-traded funds, State & Local Governments and Nonfin Noncorporate Business categories saw small asset increases in Q1. Life Insurance Companies, Property-Casualty Insurance and State and local govt. retirement funds categories saw assets decreases last quarter. Over the past 12 months, the Household Sector, Nonfinancial Corporate Business, Life Insurance Companies, Private Pension Funds, Rest of World and Mutual Funds categories showed the biggest asset increases, while Other Financial Business (formerly Funding Corps) and State and local govt. retirement funds saw the biggest asset decreases.

The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $83 billion, or 1.3%, in the first quarter to $6.441 trillion. The largest segment, the Household sector, totals $4.025 trillion, or 62.5% of assets. The Household Sector increased by $42 billion, or 1.1%, in the quarter. Over the past 12 months through March 31, 2024, Household assets were up $603 billion, or 17.6%.

Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $905 billion, or 14.1% of the total. Assets here increased by $10 billion in the quarter, or 1.2%, and they've increased by $100 billion, or 12.4%, over the past year. Other Financial Business was the third-largest investor segment with $445 billion, or 6.9% of money fund shares. This category jumped $17 billion, or 4.0%, in the latest quarter. Other Financial Business, which we believe includes Securities Lending, has decreased by $11 billion, or -2.5%, over the previous 12 months.

The fourth-largest segment, Private Pension Funds held $243 billion (3.8%). Mutual Funds (a recent addition to the tables), was the 5th largest category with 3.7% of money fund assets ($238 billion); it was up by $14 billion (6.3%) for the quarter and up $9 billion, or 3.7% over the last 12 months. The Rest of World remained sixth place in market share among investor segments with 2.9%, or $185 billion, while Nonfinancial Noncorporate Business held $140 billion (2.2%), Life Insurance Companies held $96 billion (1.5%), State & Local Governments held $73 billion (1.1%), Property-Casualty Insurance held $42 billion (0.7%), Exchange-traded Funds held $31 billion (0.5%), and State & Local Govt Retirement held $17 billion (0.3%) according to the Fed's Z.1 breakout.

The Fed's "Flow of Funds" Table L.121 shows "Money Market Mutual Funds" largely invested in “Security Repurchase Agreements” with $2.382 trillion, or 37.0% and "Debt Securities," or Credit Market Instruments, with $3.742 trillion, or 58.1% of the total. Debt securities includes: Open market paper ($316 billion, or 4.9%; we assume this is CP), Treasury securities ($2.564 trillion, or 39.8%), Agency and GSE-backed securities ($729 billion, or 11.3%), Municipal securities ($128 billion, or 2.0%) and Corporate and foreign bonds ($6 billion, or 0.1%).

Another large MMF position in the Fed's series includes `Time and savings deposits ($338 billion, or 5.3%). Money funds also hold minor positions in Miscellaneous assets ($-26 billion, or -0.4%) and Foreign deposits ($5 billion, 0.1%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $44 billion.

During Q1, Debt Securities were up $327 billion. This subtotal included: Open Market Paper (up $14 billion), Treasury Securities (up $294 billion), Agency- and GSE-backed Securities (up $21 billion), Corporate and Foreign Bonds (unchanged) and Municipal Securities (down $2 billion). In the first quarter of 2024, Security Repurchase Agreements were down $284 billion, Foreign Deposits were unchanged, Time and Savings Deposits were up by $49 billion, and Miscellaneous Assets were down $9 billion.

Over the 12 months through 3/31/24, Debt Securities were up $1.535 trillion, which included Open Market Paper (up $65B), Treasury Securities (up $1.523T), Agencies (down $63B), Municipal Securities (up $14B), and Corporate and Foreign Bonds (down $3B). Foreign Deposits (up $3 billion), Time and Savings Deposits were up $111B, Securities repurchase agreements were down $854 billion and Miscellaneous Assets were down $48B.

The L.121 table shows `Stable NAV money market funds with $5,776 billion, or 89.7% of the total (up $51.4 or 0.9% in Q1 and up $732 trillion or 14.5% over 1-year), and Floating NAV money market funds with $664 billion, or 10.3% (up $31.7B or 5.0% in Q1 and up $16B or 2.5% over 1-year). Government money market funds total $4.914 trillion, or 76.3% (down $6.5B or -0.1% in Q1 and up $479B or 10.8% over 1-year), Prime money market funds total $1.399 trillion, or 21.7% (up $92.7B or 7.1% in Q1 and up $260B or 22.8% over 1-year) and Tax-exempt money market funds $128B, or 2.0% (down $3B or -2.3% in Q1 and up $10B or 8.3% last year).

The Federal Reserve made changes to the Z.1 tables 2 years ago. Describing a "Money market funds sector data source change," the report says, "The money market mutual funds (MMF) sector (tables F.121 and L.121) has been revised beginning 2010:Q4 to reflect a change in data source to Securities and Exchange Commission Form NMFP. The level of assets and shares outstanding of the sector have increased due to the inclusion of private placement MMFs in the source data. Changes in the level due to changes in the data source in 2010:Q4 are recorded as other volume changes in the Financial Accounts."

On "Mutual funds sector holdings of money market funds," Z.1 tells us, "The mutual funds sector (tables F.122 and L.122) has been revised beginning 2010:Q4 to reflect holdings of money market funds not previously reported on the tables. In addition, holdings of repurchase agreements, commercial paper, corporate bonds, and miscellaneous assets have been revised. Additional and revised holdings are estimated using data from Morningstar and Investment Company Institute.... The exchange-traded funds sector (tables F.124 and L.124) has been revised beginning 2010:Q4 to reflect holdings of money market funds not previously reported on the tables."

The June issue of our Bond Fund Intelligence, which was sent to subscribers Monday morning, features the stories, "Active Bond Funds Beat Passive Says Eaton Vance," which quotes from a recent paper, and "ICI's 2024 Fact Book Reviews '23 Bond Fund Trends, Flows," which excerpts from the annual publication on fund statistics. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns rose in May 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.) (Note too: Thanks again to those who attended our Money Fund Symposium last week in Pittsburgh! Attendees and Crane Data subscribers may access the conference binder and materials via our "Money Fund Symposium 2024 Download Center.")

BFI's "Active Bond Fund" article states, "Eaton Vance writes, 'Active Bond Managers Show Their Worth in a Turbulent Decade,' which tells us, 'The growth of passive investing fundamentally re-shaped the market for equity mutual funds.... Unsurprisingly, passive fixed-income investing has also surged in popularity in recent years. But a new study by Eaton Vance of fixed-income mutual funds paints a different picture. It shows that fixed-income active managers have handily outpaced the passive ones, based on analysis of 327 funds with $2.2 trillion in AUM in nine major fixed-income Morningstar categories.'"

The piece continues, "The paper explains, '[W]e found that actively managed fixed-income funds collectively beat the passive ones over the 3-, 5- and 10-year investment horizons studied. Active managers also prevailed in our analysis of 84 rolling three-year periods ended within the past ten years. In other words, active outperformance has been a consistent theme through time, not one just buoyed by recent outperformance. In this report, we ... explore some of the potential reasons why active fixed income has consistently delivered superior results.'"

Our second article states, "ICI recently published its '2024 Investment Company Fact Book,' which contains a review of the bond fund marketplace in 2023 and a wealth of statistics on bond funds. They write, 'Bond funds ... experienced a major shift in net sales, going from net outflows of $260 billion in 2022 to net inflows of $631 billion in 2023.... This reversal was primarily driven by continuing developments around inflation and interest rates. Following rampant inflation and soaring rates in 2022, inflation generally fell around the world throughout 2023 and short-term interest rates stabilized during the second half of the year.'"

It states: "The Fact Book continues, 'The trajectory of monetary policy is important because when interest rates rise, bond prices fall (and vice versa). As such, fixed-income investors stand to gain from any potential reduction in official interest rates. Additionally, like the experience with equity fund returns and flows, net flows to bond funds have historically been related to bond returns.'"

Our first News brief, "Returns Positive, Yields Mixed in May," states, "Bond fund returns rebounded in May, while yields flat to lower. Our BFI Total Index rose 1.00% over 1-month and is up 4.81% over 12 months. (Money funds rose 5.19% over 1-year as measured by our Crane 100 Index.) The BFI 100 increased 1.32% in May and 4.10% over 12 mos. Our BFI Conservative Ultra-Short Index was up 0.43% over 1-month and 5.73% for 1-year; Ultra-Shorts rose 0.59% and 6.36%. Short-Term returned 0.89% and 5.19%, and Intm-Term rose 1.57% in May and 2.54%. BFI's Long-Term Index was up 1.87% and 2.52%. High Yield rose 1.04% in May and 10.23% for 12 mos."

A second News brief, "Cavanal Hill Funds Merging <b:>`_," explains, "An SEC filing tells us, 'On April 25, 2024, the Board of Trustees of Cavanal Hill Funds voted to approve a reorganization in which the Cavanal Hill Moderate Duration Fund will be merged into the Cavanal Hill Limited Duration Fund, each a series of the Cavanal Hill Funds, a Massachusetts business trust.... The Trust intends to file a registration statement detailing the Reorganization on or about May 29, 2024.... It is expected that the Reorganization will occur on or about July 31, 2024.'"

Our next News brief comments, "The Wall Street Journal Says, 'Bond Investors Are Paying Up Again for Active Fund Managers.' The piece explains, 'A rocky stretch in the debt markets has American savers turning to Wall Street pros for help picking their bonds. About $105 billion has flowed into actively managed fixed-income funds on a net basis this year, compared with $74 billion for funds that choose investments by tracking an index, according to Morningstar Direct data as of April 30. That marks the first time flows into active bond funds topped those into passive funds during the period since 2021.'"

A BFI sidebar, "T-Bills Hot Says Barron's," says, "Barron's writes, 'Treasury Bills Are the Best Place to Park Your Cash. Just Ask Warren Buffett.' It tells us, 'Investors large and small are gravitating to Treasury bills, thanks to yields of 5.4%, tax benefits, and sleep-at-night security -- and there's no reason for them to stop. For a while now, Treasuries with maturities of a year or less, known as T-bills, have offered more yield than other U.S. debt offerings.... The 10-year Treasury, for instance, yields 4.45%, while the three-month yields 5.39%. Bills have also offered positive returns ... while long-term Treasuries are in the red.'"

Finally, another sidebar, "Southern Calif. King of Bonds" tells readers, "'You'll Never Trade Bonds in This Town Again' says an article in Barron's, which discusses the outsized role of Los Angeles in the bond fund market. It asks, 'What is it about Southern California and bonds, anyway? Over the past five decades, greater Los Angeles and Orange County -- better known for motion pictures and surfin' safaris -- have become an epicenter for buying and selling fixed-income securities. It's a serendipitous story, driven by outsize personalities, iconoclasm, and a 40-year decline in interest rates. Dominating the scene are tentpole companies like the Pacific Investment Management Co., or Pimco, and TCW (the old Trust Company of the West), as well as myriad offshoots from Michael Milken’s controversial junk bond operation at the long-defunct Drexel Burnham Lambert.'"

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 $1.275 trillion, while yields were mostly flat. Assets for USD, EUR and 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 $38.3 billion over the 30 days through 6/13. The totals are up $77.6 billion (6.5%) 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: Thank you to those who attended and supported our Money Fund Symposium last week in Pittsburgh! We hope you had a great show and safe trip home. Attendees and Crane Data subscribers may access the conference binder and materials via our "Money Fund Symposium 2024 Download Center.")

Offshore US Dollar money funds increased $26.3 billion over the last 30 days and are up $36.1 billion YTD to $685.6 billion; they increased $100.0 billion in 2023. Euro funds increased E4.4 billion over the past month. YTD, they're up E18.3 billion to E253.2 billion, for 2023, they increased by E54.5 billion. GBP money funds increased L5.8 billion over 30 days, and they're up L15.2 billion YTD at L250.5B, for 2023, they fell L28.1 billion. U.S. Dollar (USD) money funds (214) account for over half (53.4%) of the "European" money fund total, while Euro (EUR) money funds (121) make up 19.9% and Pound Sterling (GBP) funds (143) total 19.7%. 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 5.23 (7-Day) on average (as of 6/13/24), unchanged 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 3.79% on average, down 5 bps 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 11 months ago and now yield 5.14%, down 1 bp 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 June MFI International Portfolio Holdings, with data as of 5/31/24, show that European-domiciled US Dollar MMFs, on average, consist of 26% in Commercial Paper (CP), 16% in Certificates of Deposit (CDs), 22% in Repo, 23% in Treasury securities, 12% in Other securities (primarily Time Deposits) and 1% in Government Agency securities. USD funds have on average 45.3% of their portfolios maturing Overnight, 7.0% maturing in 2-7 Days, 7.4% maturing in 8-30 Days, 12.5% maturing in 31-60 Days, 8.5% maturing in 61-90 Days, 12.1% maturing in 91-180 Days and 7.2% maturing beyond 181 Days. USD holdings are affiliated with the following countries: the US (38.6%), France (12.0%), Japan (9.6%), Canada (8.9%), Sweden (5.5%), the U.K. (4.8%), the Netherlands (4.5%), Australia (3.6%), Germany (2.8%) and Belgium (1.5%).

The 10 Largest Issuers to "offshore" USD money funds include: the US Treasury with $156.0 billion (23.1% of total assets), Fixed Income Clearing Corp with $33.1B (4.9%), Credit Agricole with $21.4B (3.2%), Barclays PLC with $18.7B (2.8%), Mizuho Corporate Bank Ltd <b:>`_ with $17.1B (2.5%), RBC with $16.4B (2.4%), Bank of America with $15.5B (2.3%), Sumitomo Mitsui Banking Corp with $15.3B (2.3%), JP Morgan with $14.7B (2.2%), and Nordea Bank with $14.3B (2.1%).

Euro MMFs tracked by Crane Data contain, on average 44% in CP, 20% in CDs, 17% in Other (primarily Time Deposits), 16% in Repo, 2% in Treasuries and 1% in Agency securities. EUR funds have on average 32.3% of their portfolios maturing Overnight, 13.0% maturing in 2-7 Days, 14.1% maturing in 8-30 Days, 10.8% maturing in 31-60 Days, 6.3% maturing in 61-90 Days, 16.1% maturing in 91-180 Days and 7.5% maturing beyond 181 Days. EUR MMF holdings are affiliated with the following countries: France (31.7%), Japan (11.8%), the U.S. (9.2%), Canada (8.2%), Germany (6.8%), the U.K. (5.0%), Austria (4.6%), Sweden (4.6%), Netherlands (3.9%) and Australia (3.6%).

The 10 Largest Issuers to "offshore" EUR money funds include: Credit Agricole with E14.0B (6.4%), BNP Paribas with E11.3B (5.2%), Credit Mutuel with E7.9B (3.6%), Societe Generale with E7.5B (3.5%), JP Morgan with E7.5B (3.5%), Republic of France with E7.3B (3.4%), Mitsubishi UFJ Financial Group Inc with E7.0B (3.2%), Erste Group Bank AG with E6.8B (3.1%), Agence Central de Organismes de Securite Sociale with E6.5B (3.0%) and DZ Bank AG with E6.3B (2.9%).

The GBP funds tracked by MFI International contain, on average (as of 5/31/24 ): 36% in CDs, 20% in CP, 23% in Other (Time Deposits), 17% in Repo, 3% in Treasury and 1% in Agency. Sterling funds have on average 37.0% of their portfolios maturing Overnight, 7.6% maturing in 2-7 Days, 10.6% maturing in 8-30 Days, 13.7% maturing in 31-60 Days, 10.1% maturing in 61-90 Days, 14.0% maturing in 91-180 Days and 6.9% maturing beyond 181 Days. GBP MMF holdings are affiliated with the following countries: France (16.8%), Japan (14.5%), Canada (13.4%), the U.K. (12.4%), the U.S. (9.9%), Australia (9.8%), Sweden (4.4%), Singapore (3.6%), the Netherlands (3.3%) and Abu Dhabi (2.3%).

The 10 Largest Issuers to "offshore" GBP money funds include: UK Treasury with L10.8B (5.6%), BNP Paribas with L8.3B (4.3%), Toronto-Dominion Bank with L8.2B (4.3%), Mitsubishi UFJ Financial Group Inc with L6.8B (3.6%), Commonwealth Bank of Australia with L5.9B (3.1%), Sumitomo Mitsui Trust Bank with L5.8B (3.0%), Mizuho Corporate Bank Ltd with L5.8B (3.0%), JP Morgan with L5.7B (3.0%), National Australia Bank Ltd with L5.6B (2.9%) and RBC with L5.6B (2.9%).

The Investment Company Institute published its latest weekly "Money Market Fund Assets" report Thursday, which shows money market mutual fund assets rising for the 8th straight week to $6.121 trillion, breaking above their previous April 3 record of $6.111 trillion. MMF assets are up by $234 billion, or 4.9%, year-to-date in 2024 (through 6/12/24), with Institutional MMFs up $75 billion, or 2.5% and Retail MMFs up $159 billion, or 9.5%. Over the past 52 weeks, money funds have risen by $669 billion, or 12.3%, with Retail MMFs rising by $462 billion (23.2%) and Inst MMFs rising by $207 billion (6.0%). (Note: Thank you to those attending our Money Fund Symposium this week in Pittsburgh! We hope you had a great conference and visit.... Attendees and Crane Data subscribers may access the conference binder and materials via our "Money Fund Symposium 2024 Download Center.")

The weekly release says, "Total money market fund assets increased by $28.02 billion to $6.12 trillion for the week ended Wednesday, June 12, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $25.14 billion and prime funds increased by $4.92 billion. Tax-exempt money market funds decreased by $2.03 billion." ICI's stats show Institutional MMFs increasing $27.2 billion and Retail MMFs rising $0.8 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.946 trillion (80.8% of all money funds), while Total Prime MMFs were $1.046 trillion (17.1%). Tax Exempt MMFs totaled $128.7 billion (2.1%).

ICI explains, "Assets of retail money market funds increased by $843 million to $2.45 trillion. Among retail funds, government money market fund assets increased by $29 million to $1.56 trillion, prime money market fund assets increased by $2.46 billion to $771.79 billion, and tax-exempt fund assets decreased by $1.65 billion to $117.02 billion." Retail assets account for over a third of total assets, or 40.0%, and Government Retail assets make up 63.7% of all Retail MMFs.

They add, "Assets of institutional money market funds increased by $27.18 billion to $3.67 trillion. Among institutional funds, government money market fund assets increased by $25.11 billion to $3.39 trillion, prime money market fund assets increased by $2.46 billion to $274.01 billion, and tax-exempt fund assets decreased by $385 million to $11.66 billion." Institutional assets accounted for 60.0% 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 risen by $31.6 billion in June (through 6/12) to $6.505 trillion. (They hit a record $6.538 trillion on 4/2, so our assets series has yet to reclaim record levels.) Assets rose by $91.4 billion in May, fell $15.8 billion in April and $68.8 billion in March. But they 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.

CoinDesk recently published an article titled, "Fidelity International Tokenizes Money Market Fund on JPMorgan's Blockchain." It says, "Fidelity International, a London-based funds management firm, has tokenized shares in a money market fund (MMF) using JPMorgan's Ethereum-based private blockchain network, Onyx Digital Assets. Tokenization occurred near instantaneously through connectivity between the fund's transfer agent (JPMorgan's transfer agency business) and Tokenized Collateral Network, an application that sits between a collateral receiver and a collateral provider on the bank's Onyx blockchain, said Fidelity International, which is a separate entity to U.S.-based Fidelity Management and Research."

The article explains, "Tokenization of traditional financial assets has become a priority for banks, and it's an area JPMorgan has been working on for some years. The essence of tokenization is to create on a blockchain a virtual investment vehicle representing real-world assets such as real estate, precious metals and collectibles. Stocks and bonds work too."

It tells us, "In October last year, JPMorgan carried out its first live blockchain-based collateral settlement transaction involving tokenized shares in a BlackRock money-market fund. The shares were transferred to Barclays for collateral in an over-the-counter derivatives trade. BlackRock has gone on to further embrace tokenization through its public-facing BUIDL project, with tokenization services firm Securitize."

Stephen Whyman of Fidelity International comments, "Tokenizing our money market fund shares to use as collateral is an important and natural first step in scaling our adoption of this technology. The benefits to our clients and the wider financial system are clear; in particular, the improved efficiency in delivering margin requirements and reduction in transaction costs and operational risk."

In related news, a press release titled, "Lift Dollar (USDL) from Paxos International is Now Available to Users in Argentina via Ripio, Buenbit, Manteca and Plus Crypto" tells us, "Paxos International, a UAE-based affiliate of Paxos, today announced Lift Dollar (USDL) -- a yield-bearing stablecoin issued under regulatory supervision -- is now available to consumers in Argentina via distribution partners Ripio, Buenbit, Manteca and Plus Crypto."

It adds, "USDL is unmatched in the market as holders earn overnight yield from short-term, minimal-risk US government securities and cash equivalent assets held under the safe protection and custody requirements of the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM). This reserve structure is like other Paxos-issued US dollar stablecoins that are backed 1:1. USDL is issued permissionlessly on Ethereum and pays yield programmatically on a daily basis to token holders."

The piece says, "USDL marks an important innovation in democratizing overnight yield by shifting interest earned on stablecoin reserve holdings directly to eligible end holders from the central issuer. This follows Paxos's proven history of building blockchain solutions for financial institutions and industry leaders."

It continues, "Using an Ethereum smart contract, USDL distributes the yield generated from its reserves to eligible wallet addresses daily without requiring any additional steps by the token holder. This results in a seamless experience for token holders as their USDL wallet holdings increase every day. Paxos will retain an issuer fee and pay out the remaining yield earned based on prevailing daily market conditions. Companies in permitted jurisdictions interested in enabling USDL on their platforms can onboard with Paxos International."

A Prospectus Supplement filing for Invesco Liquid Assets Portfolio and Invesco STIC Prime Portfolio tells us, "This supplement amends the Summary and Statutory Prospectuses and Statement of Additional Information of the above referenced Funds and is in addition to any other supplement(s), unless otherwise specified. You should read this supplement in conjunction with the Summary and Statutory Prospectuses and SAI and retain it for future reference. On June 11, 2024, the Board of Trustees of Short-Term Investments Trust approved a Plan of Liquidation and Dissolution, which authorizes the termination, liquidation and dissolution of the Funds." (Note: For those attending our Money Fund Symposium this week in Pittsburgh, we hope you're enjoying the show! Attendees and Crane Data subscribers may access the conference binder and materials via our "Money Fund Symposium 2024 Download Center.")

It explains, "In order to effect such liquidation, the Funds will close to investments by new accounts after the close of business on July 15, 2024. Existing shareholders will continue to be able to invest in the Fund until the close of business on or about August 14, 2024 when no further purchases or exchanges into the Fund will be accepted as the Fund prepares for liquidation on or about August 28, 2024 as described below. The liquidation may occur sooner if at any time before the Liquidation Date there are no shares outstanding in the Fund. The liquidation may also be delayed or occur sooner if unforeseen circumstances arise. Shareholders of the Fund may redeem their shares at any time prior to the Liquidation Date. The Fund reserves the right, in its discretion, to modify the extent to which sales of shares are limited prior to the Liquidation Date."

Invesco says, "To prepare for the closing and liquidation of the Fund, the Fund's portfolio managers may increase the Fund's assets held in cash and similar instruments in order to pay for Fund expenses and meet redemption requests. As a result, the Fund may deviate from its stated investment strategies and policies and may no longer be managed to meet its investment objective. On or promptly after the Liquidation Date, the Fund will make a liquidating distribution to each remaining shareholder equal to the shareholder's proportionate interest in the net assets of the Fund, in complete redemption and cancellation of the Fund's shares held by the shareholder, and the Fund will be dissolved."

They write, "If necessary, the Fund will declare and pay a dividend to distribute to its shareholders all of the Fund's remaining investment company taxable income, if any, and all of the Fund's net capital gain, if any (after reduction for any capital loss carry-forward) and any additional amounts necessary to avoid any excise tax. Alternatively, the Fund may, if eligible, treat some or all of such amounts distributed to its shareholders as being paid out as dividends as part of the liquidating distributions. The Fund's liquidation may be a taxable event to its shareholders. Please consult your tax advisor about the potential tax consequences."

Invesco adds, "At any time prior to the Liquidation Date, shareholders may redeem their shares of the Fund pursuant to the procedures set forth in the prospectus under 'Redeeming Shares,' as it may be supplemented. Shareholders who wish to avoid being liquidated out of the Fund altogether may also exchange their shares prior to the Liquidation Date for shares of certain other Invesco funds, subject to the requirements and restrictions on exchanges as described in the prospectus under 'Exchange Policy,' as it may be supplemented. Any such redemption or exchange of Fund shares for shares of another eligible Invesco fund may be considered a taxable event for federal income tax purposes, except for exchanges in a tax-advantaged retirement plan or account. Shareholders who hold their shares in the Fund through financial intermediaries should contact their financial representatives to discuss their options with respect to the liquidation and the distribution of their redemption proceeds."

In related news, UBS Select Prime Preferred Fund announced that the fund will change to Retail. It states, "The purpose of this supplement is to update certain information for UBS Select Prime Preferred Fund, a series of UBS Series Funds. First, at the recommendation of UBS Asset Management (Americas) LLC, the fund's administrator (and advisor to the related master fund), the Board of Trustees (the “Board”) of the Trust approved the conversion of the fund to operate as a 'retail money market fund' as defined in Rule 2a‑7 under the Investment Company Act of 1940, as amended."

UBS explains, "A 'retail money market fund' is defined as a money market fund that has policies and procedures reasonably designed to limit all beneficial owners of the fund to natural persons. As a result, investments in the fund will be limited to shareholder accounts beneficially owned by natural persons. The conversion is scheduled to take place after the close of business on August 16, 2024."

They tell us, "The fund's conversion to a retail money market fund will not result in any change to the fund's investment objective or principal investment strategies. After the conversion and until the consummation of the Reorganization (as defined below), the fund will continue to calculate its net asset value to four decimal places (e.g., $1.0000) using market-based pricing, and its share price will fluctuate."

UBS writes, "Before the Effective Date, UBS Asset Management (US) Inc., the fund's distributor, and authorized financial intermediaries will be required to take steps to remove any shareholder accounts that are not beneficially owned by natural persons. As a result, if your shares are held in an account that does not qualify as being beneficially owned by a natural person, your shares will be involuntarily redeemed by the fund, which may result in a taxable gain or loss. Neither the fund nor UBS AM (or its affiliates) will be responsible for any loss in an investor’s account or tax liability resulting from an involuntary redemption."

A document titled, "Frequently Asked Questions answered for UBS Select Prime (FNAV) MMFs UBS Asset Management" says, "On July 12, 2023, the US Securities and Exchange Commission (SEC) voted to amend the rules governing how money market mutual funds (MMFs) are structured and may operate. The rules were last amended in 2016 to seek to mitigate fund risk, enhance fund regulation and provide transparency for investors. The SEC has introduced new mandatory liquidity fees under the money market fund rule (known as Rule 2a-7) which applies to institutional prime (also known as floating rate NAV or 'FNAV' funds) and institutional tax-free money market funds and takes effect beginning on October 2, 2024."

Finally, it adds, "The decision by the Board of Trustees of Master Trust/UBS Series Funds to close the UBS Select Prime FNAV MMFs was driven by the new mandatory liquidity fee rules described above, which will apply from October 2, 2024. This means there will be a risk every day of a liquidity fee being applied to redemption orders which increases the operational risk and costs to the funds."

Crane Data's June Money Fund Portfolio Holdings, with data as of May 31, 2024, show that Repo holdings and Treasuries both jumped while CD and CP fell. Money market securities held by Taxable U.S. money funds (tracked by Crane Data) increased by $105.6 billion to $6.347 trillion in May, after decreasing $61.4 billion in April, $63.1 billion in March. Assets increased $66.9 in February, $86.6 in January, $51.1 billion in December and $244.0 billion in November. They decreased $57.9 billion in October, but increased $56.1 in September, $106.7 billion in August and $78.3 billion in July. Repo continues to bounce back and remained as the largest portfolio segment after reclaiming the top spot the month prior, increasing $26.8 billion, after a steep slide three months prior. Treasuries rose by $51.0 billion, staying at the No. 2 spot among portfolio segments. The U.S. Treasury continues to be the single largest Issuer to MMFs. `In May, U.S. Treasury holdings rose to $2.446 trillion, while the Fed RRP's fell $93.5 billion to $414.5 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. (Note: For those attending our Money Fund Symposium this week (June 12-14), welcome to Pittsburgh! Attendees and Crane Data subscribers may access the conference binder and materials via our "Money Fund Symposium 2024 Download Center.")

Among taxable money funds, Repurchase Agreements (repo) increased $26.8 billion (1.1%) to $2.481 trillion, or 39.1% of holdings, in May, after increasing $94.9 billion in April, $13.4 billion in March, decreasing $137.6 billion in February, decreasing $163.2 billion in January and increasing $74.8 billion in December. Treasury securities rose $51.0 billion (2.1%) to $2.446 trillion, or 38.5% of holdings, after decreasing $144.9 billion in April, $19.6 billion in March. Treasuries increased $206.2 billion in February, $104.7 billion in January and $69.6 billion in December. Government Agency Debt was up $19.9 billion, or 2.8%, to $741.0 billion, or 11.7% of holdings. Agencies increased $3.8 billion in April, decreased $14.2 billion in March and $6.7 billion in February. They increased $43.9 billion in January, but decreased $21.8 billion in December. Repo, Treasuries and Agency holdings now total $5.668 trillion, representing a massive 89.3% of all taxable holdings.

Money fund holdings of CP and CDs decreased in May, while Time Deposits rose. Commercial Paper (CP) decreased $2.8 billion (-1.0%) to $270.5 billion, or 4.3% of holdings. CP holdings decreased $30.7 billion in April, $3.9 billion in March and $2.1 billion in February, increased $18.6 billion in January and decreased $14.8 billion in December. Certificates of Deposit (CDs) decreased $15.8 billion (-7.4%) to $199.4 billion, or 3.1% of taxable assets. CDs decreased $2.2 billion in April, $18.7 billion in March, increased $0.8 billion in February and $19.5 billion in January, and decreased $5.4 billion in December. Other holdings, primarily Time Deposits, increased $26.2 billion (15.4%) to $196.7 billion, or 3.1% of holdings, after increasing $17.7 billion in April, decreasing $20.3 billion in March, increasing $5.7 billion in February and $63.4 billion in January, and decreasing $52.1 billion in December. VRDNs rose to $12.4 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 $1.377 trillion, or 21.7% of taxable money funds' $6.347 trillion total. Among Prime money funds, CDs represent 14.5% (down from 15.8% a month ago), while Commercial Paper accounted for 19.6% (down from 20.1% in April). The CP totals are comprised of: Financial Company CP, which makes up 13.0% of total holdings, Asset-Backed CP, which accounts for 5.1%, and Non-Financial Company CP, which makes up 1.5%. Prime funds also hold 3.5% in US Govt Agency Debt, 16.7% in US Treasury Debt, 16.6% in US Treasury Repo, 0.3% in Other Instruments, 12.5% in Non-Negotiable Time Deposits, 6.2% in Other Repo, 8.2% in US Government Agency Repo and 0.7% in VRDNs.

Government money fund portfolios totaled $3.215 trillion (50.7% of all MMF assets), up from $3.180 trillion in April, while Treasury money fund assets totaled another $1.754 trillion (27.6%), up from $1.698 trillion the prior month. Government money fund portfolios were made up of 21.6% US Govt Agency Debt, 18.6% US Government Agency Repo, 29.4% US Treasury Debt, 30.2% in US Treasury Repo, 0.0% in Other Instruments. Treasury money funds were comprised of 72.5% US Treasury Debt and 27.3% in US Treasury Repo. Government and Treasury funds combined now total $4.969 trillion, or 78.3% of all taxable money fund assets.

European-affiliated holdings (including repo) increased by $11.6 billion in May to $790.5 billion; their share of holdings rose to 12.5% from last month's 12.4%. Eurozone-affiliated holdings decreased to $494.5 billion from last month's $499.5 billion; they account for 7.8% of overall taxable money fund holdings. Asia & Pacific related holdings fell to $297.5 billion (4.7% of the total) from last month's $299.7 billion. Americas related holdings rose to $5.249 trillion from last month's $5.157 trillion, and now represent 82.7% of holdings.

The overall taxable fund Repo totals were made up of: US Treasury Repurchase Agreements (up $11.1 billion, or 0.7%, to $1.680 trillion, or 26.5% of assets); US Government Agency Repurchase Agreements (up $10.8 billion, or 1.5%, to $711.8 billion, or 11.2% of total holdings), and Other Repurchase Agreements (up $4.9 billion, or 5.8%, from last month to $89.6 billion, or 1.4% of holdings). The Commercial Paper totals were comprised of Financial Company Commercial Paper (up $1.1 billion to $179.1 billion, or 2.8% of assets), Asset Backed Commercial Paper (down $0.7 billion to $70.5 billion, or 1.1%), and Non-Financial Company Commercial Paper (down $3.2 billion to $20.9 billion, or 0.3%).

The 20 largest Issuers to taxable money market funds as of April 30, 2024, include: the US Treasury ($2.446T, 38.5%), Federal Home Loan Bank ($601.8B, 9.5%), Fixed Income Clearing Corp ($527.6B, 8.3%), the Federal Reserve Bank of New York ($414.5B, or 6.5%), JP Morgan ($202.2B, 3.2%), RBC ($164.2B, 2.6%), Citi ($160.4B, 2.5%), BNP Paribas ($139.1B, 2.2%), Federal Farm Credit Bank ($128.0B, 2.0%), Bank of America ($124.0B, 2.0%), Barclays PLC ($120.9B, 1.9%), Goldman Sachs ($110.4B, 1.7%), Wells Fargo ($78.7B, 1.2%), Credit Agricole ($72.8B, 1.1%), Mitsubishi UFJ Financial Group Inc ($63.9B, 1.0%), Sumitomo Mitsui Banking Corp ($60.9B, 1.0%), Bank of Montreal ($57.3B, 0.9%), Canadian Imperial Bank of Commerce ($54.9B, 0.9%), Societe Generale ($53.9B, 0.8%) and Mizuho Corporate Bank Ltd ($53.8B, 0.8%).

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: Fixed Income Clearing Corp ($527.6B, 21.3%), the Federal Reserve Bank of New York ($414.5B, 16.7%), JP Morgan ($193.4B, 7.8%), Citi ($148.6B, 6.0%), RBC ($134.4B, 5.4%), BNP Paribas ($127.4B, 5.1%), Goldman Sachs ($109.7B, 4.4%), Bank of America ($100.9B, 4.1%), Barclays ($100.1B, 4.0%) and Wells Fargo ($68.9B, 2.8%). The largest users of the $414.5 billion in Fed RRP include: Goldman Sachs FS Govt ($149.2B), Vanguard Federal Money Mkt Fund ($125.9B), Fidelity Govt Money Market ($161.0B), JPMorgan US Govt MM ($114.8B), Federated Hermes Govt Oblig ($105.5B), Schwab Value Adv MF ($101.2B), Fidelity Govt Cash Reserves ($97.3B), Morgan Stanley Inst Liq Govt ($95.7B), Fidelity Inv MM: Govt Port ($93.9B) and Allspring Govt MM ($65.3B).

The 10 largest issuers of "credit" -- CDs, CP and Other securities (including Time Deposits and Notes) combined -- include: Mizuho Corporate Bank Ltd ($32.7B, 5.4%), RBC ($29.8B, 4.9%), Toronto-Dominion Bank ($25.5B, 4.2%), DNB ASA ($24.6B, 4.1%), Credit Agricole ($24.6B, 4.1%), Bank of America ($23.0B, 3.8%), Canadian Imperial Bank of Commerce ($22.2B, 3.7%), Bank of Montreal ($21.3B, 3.5%), Skandinaviska Enskilda Banken AB ($20.9B, 3.5%) and Barclays PLC ($20.8B, 3.4%).

The 10 largest CD issuers include: Bank of America ($15.1B, 7.6%), Sumitomo Mitsui Banking Corp ($13.5B, 6.8%), Credit Agricole ($13.2B, 6.6%), Mitsubishi UFJ Financial Group Inc ($12.3B, 6.2%), Toronto-Dominion Bank ($11.2B, 5.6%), Sumitomo Mitsui Trust Bank ($9.9B, 5.0%), Wells Fargo ($9.8B, 4.9%), Mizuho Corporate Bank Ltd ($9.0B, 4.5%), Mitsubishi UFJ Trust and Banking Corporation ($8.5B, 4.3%) and Canadian Imperial Bank of Commerce ($8.3B, 4.1%).

The 10 largest CP issuers (we include affiliated ABCP programs) include: RBC ($17.5B, 7.1%), Toronto-Dominion Bank ($14.2B, 5.8%), Bank of Montreal ($12.4B, 5.1%), BPCE SA ($12.3B, 5.0%), Barclays PLC ($11.3B, 4.6%), JP Morgan ($8.8B, 3.6%), BSN Holdings Ltd ($8.6B, 3.5%), Bank of Nova Scotia ($8.3B, 3.4%), UBS AG ($6.9B, 2.8%) and Citi ($6.9B, 2.8%).

The largest increases among Issuers include: US Treasury (up $51.0B to $2.446T), JP Morgan (up $30.5B to $202.2B), RBC (up $25.6B to $164.2B), Citi (up $17.1B to $160.4B), Fixed Income Clearing Corp (up $15.2B to $527.6B), Federal Home Loan Bank (up $11.5B to $601.8B), Bank of Montreal (up $10.3B to $57.3B), Wells Fargo (up $9.8B to $78.7B), BSN Holdings Ltd (up $7.0B to $8.6B) and Canadian Imperial Bank of Commerce (up $6.1B to $54.9B).

The largest decreases among Issuers of money market securities (including Repo) in May were shown by: the Federal Reserve Bank of New York (down $93.5B to $414.5B), Nomura (down $3.9B to $24.7B), Federated (down $3.3B to $14.3B), Sumitomo Mitsui Banking Corp (down $3.2B to $60.9B), Rabobank (down $2.2B to $10.7B), Landesbank Baden-Wurttemberg (down $1.8B to $10.7B), Societe Generale (down $1.8B to $53.9B), BNP Paribas (down $1.3B to $139.1B), Sumitomo Mitsui Trust Bank (down $1.0B to $23.1B) and Australia & New Zealand Banking Group Ltd (down $0.8B to $21.1B).

The United States remained the largest segment of country-affiliations; it represents 76.9% of holdings, or $4.882 trillion. Canada (5.8%, $367.3B) was in second place, while France (5.0%, $314.9B) was No. 3. Japan (4.2%, $266.8B) occupied fourth place. The United Kingdom (3.2%, $203.3B) remained in fifth place. Netherlands (1.0%, $62.2B) was in sixth place, followed by Sweden (0.9%, $58.3B), Germany (0.9%, $54.8B), Australia (0.6%, $37.7B), and Norway (0.4%, $25.1B). (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 May 31, 2024, Taxable money funds held 47.7% (down from 48.2%) of their assets in securities maturing Overnight, and another 12.2% maturing in 2-7 days (up from 11.4%). Thus, 59.9% in total matures in 1-7 days. Another 9.5% matures in 8-30 days, while 12.1% matures in 31-60 days. Note that over three-quarters, or 81.6% 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 5.8% of taxable securities, while 8.1% matures in 91-180 days, and just 4.6% matures beyond 181 days. (Visit our Content center to download, or contact us <i:mailto:info@cranedata.com>`_to request our latest `Portfolio Holdings reports.)

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 May 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 May 31, includes holdings information from 975 money funds (up 3 from last month), representing assets of $6.540 trillion (up from $6.425 trillion). Prime MMFs inched up to $1.391 trillion (up $14.0 billion), or 21.3% of the total. (Note too that there were no funds reclassifying away from "Prime" in the SEC's latest monthly data set.) We review the new N-MFP data, and we also look at our revised MMF expense data, which shows charged expenses inching higher and money fund revenues slightly dropping to $17.0 billion (annualized) in May. (Note: We look forward to seeing you at our Money Fund Symposium show in Pittsburgh this week (June 12-14)! Safe travels, and attendees and Crane Data subscribers may access the conference binder and materials via our "Money Fund Symposium 2024 Download Center.")

Our latest Form N-MFP Summary for All Funds (taxable and tax-exempt) shows Repurchase Agreement (Repo) remaining the top spot for largest type of portfolio holding in money market funds after taking back the top spot the month prior, Repo holdings in money market funds now total $2.501 trillion (up from $2.472 trillion), or 38.2% of all assets, while Treasury holdings rose to $2.467 trillion (up from $2.415 billion), or 37.7% of all holdings. Government Agency securities total $753.8 billion (up from $733.4 billion), or 11.5%. Holdings of Treasuries, Government agencies and Repo (almost all of which is backed by Treasuries and agencies) combined total $5.722 trillion, or a massive 87.4% of all holdings.

Commercial paper (CP) totals $280.9 billion (down from $283.7 billion), or 4.3% of all holdings, and the Other category (primarily Time Deposits) totals $202.1 billion (up from $175.1 billion), or 3.1%. Certificates of Deposit (CDs) total $199.6 billion (down from $215.2 billion), 3.1%, and VRDNs account for $135.8 billion (up from $131.3 billion last month), or 2.1% of money fund securities.

Broken out into the SEC's more detailed categories, the CP totals were comprised of: $179.9 billion, or 2.8%, in Financial Company Commercial Paper; $70.5 billion or 1.1%, in Asset Backed Commercial Paper; and, $30.6 billion, or 0.5%, in Non-Financial Company Commercial Paper. The Repo totals were made up of: U.S. Treasury Repo ($1.707 trillion, or 26.1%), U.S. Govt Agency Repo ($697.7B, or 10.7%) and Other Repo ($95.8B, or 1.5%).

The N-MFP Holdings summary for the Prime Money Market Funds shows: CP holdings of $273.1 billion (down from $276.7 billion), or 19.6%; Repo holdings of $431.0 billion (up from $428.0 billion), or 31.0%; Treasury holdings of $235.6 billion (up from $228.8 billion), or 16.9%; CD holdings of $199.6 billion (down from $215.2 billion), or 14.4%; Other (primarily Time Deposits) holdings of $192.8 billion (up from $168.4 billion), or 13.9%; Government Agency holdings of $49.2 billion (down from $50.4 billion), or 3.5% and VRDN holdings of $9.7 billion (up from $9.6 billion), or 0.7%.

The SEC's more detailed categories show CP in Prime MMFs made up of: $179.9 billion (up from $179.1 billion), or 12.9%, in Financial Company Commercial Paper; $70.5 billion (down from $71.7 billion), or 5.1%, in Asset Backed Commercial Paper; and $22.8 billion (down from $25.8 billion), or 1.6%, in Non-Financial Company Commercial Paper. The Repo totals include: U.S. Treasury Repo ($232.2 billion, or 16.7%), U.S. Govt Agency Repo ($111.6 billion, or 8.0%), and Other Repo ($87.2 billion, or 6.3%).

In related news, money fund charged expense ratios (Exp%) were mixed in May. Our Crane 100 Money Fund Index and Crane Money Fund Average were 0.26% and 0.38%, respectively, as of May 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%, down 1 bp from last month's level (but 18 bps higher than 12/31/21's 0.08%). The Crane Money Fund Average, a simple average of all taxable MMFs, showed a charged expense ratio of 0.38% as of May 31, 2024, up 1 bp from the month prior and slightly below the 0.40% at year-end 2019.

Prime Inst MFs expense ratios (annualized) average 0.28% (down 4 bps from last month), Government Inst MFs expenses average 0.31% (up 5 bps from last month), Treasury Inst MFs expenses average 0.28% (unchanged from last month). Treasury Retail MFs expenses currently sit at 0.52%, (unchanged from last month), Government Retail MFs expenses yield 0.54% (unchanged from last month). Prime Retail MF expenses averaged 0.48% (unchanged from last month). Tax-exempt expenses were also unchanged at 0.40% on average.

Gross 7-day yields were also mixed during the month ended May 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 5.41%, up 1 bp 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 unchanged, ending the month at 5.40%.

According to our revised MFI XLS and Crane Index numbers, we now estimate that annualized revenue for all money funds is $16.953 billion (as of 5/31/24). Our estimated annualized revenue totals decreased from $17.301B last month (the all-time record), but is still higher from the $16.883B seen 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 inflows resume to money funds following a pause around April 15.

Crane Data's latest monthly Money Fund Market Share rankings show assets increased among most of the largest U.S. money fund complexes in May, after falling in March and April. Money market fund assets rose by $79.2 billion, or 1.2%, last month to $6.465 trillion. Total MMF assets have decreased by $7.7 billion, or -0.1%, over the past 3 months, but they've increased by $611.0 billion, or 10.4%, over the past 12 months. The largest increases among the 25 largest managers last month were seen by JPMorgan, BlackRock, Schwab, Vanguard and Goldman Sachs, which grew assets by $12.6 billion, $12.0B, $11.9B, $10.7B and $9.8B, respectively. Declines in May were seen by Fidelity, Dreyfus, DWS, HSBC and PGIM, which decreased by $5.3 billion, $4.6B, $4.3B, $3.1B and $824M, 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 slightly up in May. (Note: We look forward to seeing many of you this week at our big Money Fund Symposium show in Pittsburgh (June 12-14)! Attendees and Crane Data subscribers may access the conference binder and materials via our "Money Fund Symposium 2024 Download Center.")

Over the past year through May 31, 2024, Fidelity (up $169.4B, or 15.0%), Schwab (up $145.1B, or 38.0%), Vanguard (up $87.1B, or 16.9%), JPMorgan (up $84.8B, or 14.7%) and Federated Hermes (up $59.4B, or 15.2%) were the `largest gainers. Schwab, Vanguard, BlackRock, Invesco and Allspring had the largest asset increases over the past 3 months, rising by $22.9B, $20.7B, $11.5B, $8.3B and $3.6B, respectively. The largest declines over 12 months were seen by: Goldman Sachs (down $50.9B), American Funds (down $27.4B), Invesco (down $23.3B), and Morgan Stanley (down $6.2B). The largest declines over 3 months included: SSGA (down $33.4B), HSBC (down $12.7B) and Dreyfus (down $10.6B).

Our latest domestic U.S. Money Fund Family Rankings show that Fidelity Investments remains the largest money fund manager with $1.298 trillion, or 20.1% of all assets. Fidelity was down $5.3B in May, down $9.1 billion over 3 mos., and up $169.4B over 12 months. JPMorgan ranked second with $660.9 billion, or 10.2% market share (up $12.6B, down $4.3B and up $84.8B for the past 1-month, 3-mos. and 12-mos., respectively). Vanguard ranked in third place with $602.8 billion, or 9.3% of assets (up $10.7B, up $20.7B and up $87.1B). Schwab ranked fourth with $527.3 billion, or 8.2% market share (up $11.9B, up $22.9B and up $145.1B), while BlackRock was the fifth largest MMF manager with $522.0 billion, or 8.1% of assets (up $12.0B, up $11.5B and up $20.7B for the past 1-month, 3-mos. and 12-mos.).

Federated Hermes was in sixth place with $451.1 billion, or 7.0% (up $4.0B, down $1.2B and up $59.4B), while Goldman Sachs was in seventh place with $392.2 billion, or 6.1% of assets (up $9.8B, up $1.5B and down $50.9B). Dreyfus ($272.2B, or 4.2%) was in eighth place (down $4.6B, down $10.6B and up $12.4B), followed by Morgan Stanley ($245.8B, or 3.8%; up $4.0B, down $461M and down $6.2B). SSGA was in 10th place ($213.2B, or 3.3%; up $2.9B, down $33.4B and up $54.7B).

The 11th through 20th-largest U.S. money fund managers (in order) include: Allspring (formerly Wells Fargo) ($198.3B, or 3.1%), American Funds ($167.8B, or 2.6%), Northern ($164.1B, or 2.5%), First American ($142.9B, or 2.2%), Invesco ($141.1B, or 2.2%), UBS ($105.4B, or 1.6%), T. Rowe Price ($47.3B, or 0.7%), DWS ($37.5B, or 0.6%), HSBC ($33.7B, or 0.5%) and Western ($28.8B, or 0.4%). Crane Data currently tracks 62 U.S. MMF managers, up 1 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 ($1.312 trillion), JP Morgan ($895.6B), BlackRock ($776.7B), Vanguard ($602.8B) and Schwab ($527.3B). Goldman Sachs ($522.9B) was in sixth, Federated Hermes ($462.4B) was seventh, followed by Morgan Stanley ($329.0B), Dreyfus/BNY Mellon ($294.9B) and SSGA ($257.7B), 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 June issue of our Money Fund Intelligence and MFI XLS, with data as of 5/31/24, shows that yields were slightly up in May 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% (up 1 bp) for the 7-Day Yield (annualized, net) Average, the 30-Day Yield was unchanged at 5.02%. The MFA's Gross 7-Day Yield was at 5.40% (up 1 bp), and the Gross 30-Day Yield also was up 1 bp at 5.39%. (Gross yields will be revised Monday at noon, though, once we download the SEC's Form N-MFP data for 5/31/24.)

Our Crane 100 Money Fund Index shows an average 7-Day (Net) Yield of 5.14% (up 1 bp) and an average 30-Day Yield at 5.13% (up 1 bp). The Crane 100 shows a Gross 7-Day Yield of 5.41% (up 1 bp), and a Gross 30-Day Yield of 5.40% (up 1 bp). Our Prime Institutional MF Index (7-day) yielded 5.18% (up 2 bps) as of May 31. The Crane Govt Inst Index was at 5.12% (up 1 bp) and the Treasury Inst Index was at 5.09% (up 1 bp). Thus, the spread between Prime funds and Treasury funds is 9 basis points, and the spread between Prime funds and Govt funds is 6 basis points. The Crane Prime Retail Index yielded 5.02% (down 1 bp), while the Govt Retail Index was 4.84% (up 1 bp), the Treasury Retail Index was 4.84% (unchanged from the month prior). The Crane Tax Exempt MF Index yielded 3.13% (down 17 bps) as of May.

Gross 7-Day Yields for these indexes to end May were: Prime Inst 5.50% (up 3 bps), Govt Inst 5.37% (up 1 bp), Treasury Inst 5.37% (up 1 bp), Prime Retail 5.50% (down 1 bp), Govt Retail 5.37% (up 1 bp) and Treasury Retail 5.36% (up 1 bp). The Crane Tax Exempt Index fell to 3.52% (down 16 bps). The Crane 100 MF Index returned on average 0.43% over 1-month, 1.29% over 3-months, 2.06% YTD, 5.19% over the past 1-year, 2.78% over 3-years (annualized), 1.97% over 5-years, and 1.34% over 10-years.

The total number of funds, including taxable and tax-exempt, was unchanged in May at 881. There are currently 760 taxable funds, unchanged 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.)

The June issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "Allspring, UBS, Dreyfus, DWS All File Plans to Leave Prime," which covers the continued exodus from Prime Institutional MMFs; "ICI 2024 Fact Book Shows Money Fund Trends in '23," which quotes from ICI's annual compilation of fund statistics; and, "Money Funds Largest Buyers of T-Bills Says JPM; Berkshire," which looks at holders of Treasuries. We also sent out our MFI XLS spreadsheet Friday a.m., and we've updated our Money Fund Wisdom database with 5/31/24 data. Our June Money Fund Portfolio Holdings are scheduled to ship on Tuesday, June 11, and our June Bond Fund Intelligence is scheduled to go out on Monday, June 17. (Note: Register ASAP for our Money Fund Symposium next week in Pittsburgh, June 12-14. We hope you'll join us!)

MFI's "Prime Exit" article says, “Another batch of Prime Institutional money market funds filed to liquidate or convert to Government in May, bringing the total of Prime exits to 10 to date. Allspring, formerly the Wells Fargo Funds, is the latest to announce an exit ahead of the SEC's pending emergency mandatory liquidity fee rules (which go into effect October 2). A Product Alert titled, 'Allspring to Merge Two Money Market Funds' tells us, 'The Allspring Funds Board of Trustees has approved the merger of the [$3.1 billion] Allspring Heritage Money Market Fund into the Allspring Government Money Market Fund. The merger is expected to take place at the close of business on or around August 16, 2024."

The piece continues, "It adds, 'Note that the Service Class of the Heritage Money Market Fund will merge into the Administrator Class of the Government Money Market Fund, and the Administrator Class of the Heritage Money Market Fund will merge into the Institutional Class of the Government Money Market Fund.' (See the Prospectus Supplement for the Allspring Institutional Money Market Funds.)"

We write in our ICI 2024 Fact Book article, “The Investment Company Institute released its '2024 Investment Company Fact Book’ an annual compilation of statistics and commentary on the mutual fund space. Subtitled, 'A Review of Trends and Activities in the Investment Company Industry,' the latest edition tells us, 'Worldwide net sales of money market funds totaled $1.5 trillion in 2023, up from $161 billion in 2022 (Figure 1.7). The increase in worldwide demand for money market funds was spread across all geographical regions but was primarily driven by a substantial increase in net inflows in the United States. Investor demand for money market funds in the United States increased from $1 billion in 2022 to $1.1 trillion in 2023. In the Asia-Pacific region, money market funds experienced net inflows of $136 billion in 2023, about even with the net inflows of $132 billion in 2022.'"

ICI continues, "It explains, 'Investors use money market funds because they are professionally managed, tightly regulated vehicles with holdings limited to high-quality, short-term debt instruments <b:>`_. As such, they are highly liquid, attractive, cash-like alternatives to bank deposits. [D]emand for money market funds is dependent upon their yields and interest rate risk exposure relative to other high-quality fixed-income securities.'"

Our "Treasury Bills" piece says, "J.P. Morgan's most recent 'Short-Term Market Outlook And Strategy' writes that, 'Yes, T-bill demand should remain robust.' They comment, 'While the outcome of the upcoming November election remains highly uncertain, the one thing we know is that the US fiscal deficit will remain large in the coming years, regardless of who wins. As our Treasury strategists note, given Treasury's current net coupon borrowing capacity and their estimates of the budget deficit forecasts over the medium term, Treasury will likely remain underfunded in FY26 and beyond.... Reading between the lines, it appears there is a possibility that the T-bill share of the market could migrate above the current recommended range over time.'"

It tells us, "The piece continues, 'If so, we believe the markets will have no issues digesting the additional T-bill supply, with demand remaining robust. Indeed, even as T-bill outstandings have grown by $2tn over the past year, the impact on T-bill/SOFR spreads has been marginal thanks to the available pool of liquidity at the ON RRP, underscoring the sheer amount of demand for T-bills in the current market environment.... Perhaps more importantly, when we look at the buyer base of the T-bill market, we see the demand from several key buyers remaining substantial, if not expanding, in the near term.'"

MFI also includes the News brief, "MMF Assets Rebound in May." It states, "Money fund assets jumped $79.7 billion to $6.466 trillion in May (after falling $17.6 billion in April and $68.5B in March). Year-to-date, MMFs are up by $147.3 billion, or 2.3%. Over 12 months, money funds have risen by $611.3 billion, or 10.4%."

Another News brief, "Citi's Williams on Impact from MMF Reforms: No Big Deal; Assets Higher. Citi Research recently published a research piece titled, 'Short-End Notes Impact from MMF reform and AUM expectations,' which tells us, 'Do not expect a repeat of 2016 this October.' Author Jason Williams writes, 'We've gotten multiple questions on the front-end impact due to the full implementation of the new money market fund reform, specifically the SEC's liquidity fee which is set to turn on in October.'"

A sidebar, "DWS ESG Fund Liquidating," says, "A Prospectus Supplement filing for the $505 million DWS ESG Liquidity Fund tells us, 'Upon the recommendation of DWS Investment Management Americas, Inc., the investment advisor for DWS ESG Liquidity Fund, the Board of Trustees of Investors Cash Trust has authorized, on behalf of the fund, the fund's termination and liquidation, which will be effective on or about August 14, 2024. Accordingly, the fund will redeem all of its outstanding shares on the Liquidation Date. The liquidation will be effected according to a Plan of Liquidation and Termination. The costs of the liquidation, including the mailing of notification to shareholders, will be borne by the fund but reimbursed by the Advisor, after taking into account applicable contractual expense caps.'"

Our June MFI XLS, with May 31 data, shows total assets increased $79.7 billion to $6.466 trillion, after decreasing $17.6 billion in April, $66.7 billion in March, 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 and $20.3 billion in June.

Our broad Crane Money Fund Average 7-Day Yield was unchanged at 5.03%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 1 bp to 5.14% in May. 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 0.27% 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 5/31/24.) The average WAM (weighted average maturity) for the Crane MFA was 34 days (down 1 bp from previous month) and the Crane 100 WAM was unchanged at 35 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

We wrote on Monday about Allspring filing to liquidate its Prime Institutional Money Market Fund (see our "Allspring to Merge Heritage MMF Into Govt MMF; UBS Converting Fund"), which brought the number of funds either liquidating or converting to Government to 10 (totaling $227.5 billion). While not a liquidation or conversion, Federated Hermes filed this week to consolidate two Prime Inst MMFs. A Prospectus Supplement for the $12.3 billion Federated Hermes Institutional Prime Value Obligations Fund explains, "We recommend that you read the Prospectus/Information Statement in its entirety; this information will help you understand the upcoming Reorganization. Federated Hermes Institutional Prime Value Obligations Fund ... will be reorganized into Federated Hermes Institutional Prime Obligations Fund.... Both the Reorganizing Fund and the Surviving Fund are money market funds and are portfolios of Federated Hermes Money Market Obligations Trust. Please refer to the enclosed Prospectus/Information Statement as well as the highlighted information below for details on the Reorganization." (Note: We hope to see you next week at our big Money Fund Symposium show in Pittsburgh, June 12-14. Attendees and Crane Data subscribers can access the conference binder and materials via our "Money Fund Symposium 2024 Download Center.")

A Q&A tells us, "Why has the Board of Trustees approved the Reorganization? In determining whether to approve the Reorganization, the Board of Trustees, including the Independent Trustees, of the Reorganizing Fund and the Surviving Fund considered a variety of factors, including, but not limited to, the following: Since 2017, the Reorganizing Fund has invested substantially all of its assets in the Surviving Fund in a 'fund-of-funds' structure in reliance on Rule 12d1-1 under the Investment Company Act of 1940 Act, as amended."

It continues, "In July 2023, the Securities and Exchange Commission amended Rule 2a-7, the primary rule under the 1940 Act governing money market funds. As a result, institutional money market funds, such as the Reorganizing Fund and the Surviving Fund, will be required to adopt procedures to implement mandatory liquidity fees by October 2, 2024. The Board has received and considered information from the Adviser (as defined below) regarding the impact these changes will have on the Reorganizing Fund and the Surviving Fund."

Federated Hermes states, "Because the Reorganizing Fund invests substantially all of its assets in the Surviving Fund in a Rule 12d1-1 fund-of-funds structure, the Adviser believes there is a risk that redemption activity at the Reorganizing Fund level could trigger the imposition of a mandatory liquidity fee for the Surviving Fund, the Reorganizing Fund or both, which could cause additional operational challenges if mandatory fees are implemented and could potentially have a negative effect on shareholders. If it is necessary to impose a mandatory liquidity fee, the fee would apply to all shares that are redeemed at that day's net asset value ('NAV')."

They write, "As the Reorganizing Fund's investments in the Surviving Fund represented approximately 75% of the total assets of the Surviving Fund as of February 29, 2024, the Adviser believes the Reorganization represents the most efficient and shareholder beneficial approach to ending this fund-of-funds structure, rather than the liquidation of the Reorganizing Fund or the redemption of the Reorganizing Fund's position in the Surviving Fund, which would result in a taxable event for Reorganizing Fund shareholders."

The filing adds, "The Reorganizing Fund will transfer all or substantially all of the Reorganizing Fund's assets (which consist almost entirely of shares of the Surviving Fund) to the Surviving Fund, and the Surviving Fund will issue new shares to the Reorganizing Fund. Immediately following the Reorganization, the Surviving Fund will continue to invest the same assets pursuant to the same strategies it currently implements, and the Reorganizing Fund shareholders will maintain the same exposure to these investments as direct investors in the Surviving Fund. The Adviser believes the proposed Reorganization is in the best interests of the Reorganizing Fund and Surviving Fund and the interests of the existing Reorganizing Fund and Surviving Fund shareholders would not be diluted as a result of the Reorganization."

It also says, "The Reorganizing Fund's shareholders will become shareholders of the Surviving Fund that, as compared to the Reorganizing Fund, has lower gross total operating expenses and the same or lower net total expenses for each share class. The Surviving Fund's net total operating expenses could increase after the expiration of the Surviving Fund's expense limitation agreement on August 1, 2025, if such expense limitation agreement is not renewed. In addition, because the Reorganizing Fund invests substantially all of its assets in the Surviving Fund, the Reorganizing Fund's historical performance generally tracks the Surviving Fund's performance, `with the exception of the 10-year average annual total return period, in which the Reorganizing Fund slightly outperformed the Surviving Fund, reflecting the period prior to creation of the Rule 12d1-1 fund-of-funds structure during which the Reorganizing Fund was managed pursuant to different investment strategies."

Federated tells us, "The Board considered the terms and conditions of the Plan of Reorganization, including that the Reorganization will not dilute the interests of the shareholders of the Reorganizing Fund or the Surviving Fund because a Reorganizing Fund shareholder will become the owner of shares of the Surviving Fund having a total NAV equal to the total NAV of his or her holdings in the Reorganizing Fund on the date of the Reorganization, and the assets to be acquired by the Surviving Fund will have a total NAV equal to the total NAV of the Reorganizing Fund.... The Board considered that the Reorganization does not require, and would be completed without incurring the costs associated with, holding a special meeting of the Reorganizing Fund's shareholders."

They state, "After careful consideration of these and other factors, the Board determined that the proposed Reorganization is in the best interests of the Reorganizing Fund and the Surviving Fund and that the interests of the existing shareholders of the Reorganizing Fund and the Surviving Fund would not be diluted as a result of the Reorganization. Please see the section entitled "Summary–Reasons for the Reorganization" in the attached Prospectus/Information Statement for more information regarding the Board's considerations in determining to approve the Reorganization."

Finally, the filing asks, "Who is the investment adviser to the Surviving Fund?" It answers, "The investment adviser to both the Reorganizing Fund and the Surviving Fund is Federated Investment Management Company.... In addition, the same portfolio managers are jointly and primarily responsible for the day-to-day management of both the Reorganizing Fund and the Surviving Fund."

For more on recent Prime Institutional MMF liquidations and conversions, see these Crane Data News stories: "DWS Liquidating ESG Liquidity Fund, 7th Prime Inst to Exit" (5/22/24), "Dreyfus Files to Liquidate Cash Management Prime Inst MMF, Tax Exempt" (5/13/24), "Goldman Files to Liquidate Prime Inst MMFs; Barron's: MMFs Tempting" (4/22/24), "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).

Federated Hermes' latest monthly commentary by Money Market CIO Deborah Cunningham is entitled, "Filling the pool again." Subtiled, "With the Fed on hold and tax collection over, assets resume flowing into liquidity products," it tells us, "Summer doesn't officially start until June 21, but Memorial Day marks the opening of public pools. That means municipalities were filling them in May with the clear, shimmering water that beckons children from coast to coast. Liquidity vehicles experienced their own flows in May (you probably knew I was headed in this direction...). Many lost assets in March and April, but it was largely due to corporate and individual tax dates, not from the beginning of the end of cash's reign." (Note: There's just one week until our big Money Fund Symposium show in Pittsburgh, June 12-14. We're still taking registrations and hope to see you there!)

She writes, "After two years of its kingly status, some would like to see other asset classes be more attractive. But money market funds, retail in particular, are only growing in favor as they ride the Federal Reserve's reticence to cut rates. Both total industry money funds and total industry retail funds had inflows in May. Modest, but inflows."

The Federated piece asks, "Could it be that the pool will overflow? Some media reports have issued concern that, due to elevated yields, earnings from money funds have risen to around 1% of U.S. GDP, suggesting the economy might not be as strong as it seems. Others have pointed to record amount of assets in money funds as a risk if clients reallocate to other investments when the Fed eases. The former claim is absurd. Money funds are simply another source of earnings, and consumers continue to spend."

It explains, "The latter argument falls apart when seen in relative terms. Since 2013, money fund assets worldwide have averaged 15-17% of total mutual fund assets and ETFs. At the end of 2023, that figure was 17.3%. For comparison, it was approximately 45% during the height of the Global Financial Crisis. The reasoning that the financial system is threatened by the success of liquidity products is specious. While it is always important to look for stress in the markets, this seems more a case of investor angst. Or maybe jealousy. In any case, we think there's room for liquidity vehicles to grow, and the expected influx of institutional assets have not begun in earnest yet."

Cunnigham then states, "Keeping with the swimming pool metaphor, the U.S. Treasury Department is acting like a drain. On May 29, it began a program to buy back a set amount of government securities. My colleague Susan Hill lays this out well in an earlier piece. The gist is that Secretary Janet Yellen and company want to support the Treasury market by increasing liquidity via purchases on the secondary market. The focus now is on bonds and notes, but Treasury plans on targeting bills to lessen market volatility when it issues fewer short-term securities because it has a surfeit of cash. While it won't make a ton of difference if the buyback amount is modest, as it has been so far, it can only help cash managers."

In a section titled, "Moving Target it says, "It would be easier to name the Fed governors and branch presidents who didn't speak in May than those who did. One gets the feeling that dissent will be coming, especially as the minutes of the May Federal Open Market Committee meeting were more hawkish than the neutral-to-dovish spin Chair Jerome Powell gave in his press conference. We already know that the three quarter-point cuts the Federal Reserve once penciled for the second half of this year have been postponed. We expect to get only one or two now."

Federated adds, "However, the specter of a rate hike raised its frightful head in the May meeting: 'Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.' Despite this warning, we do not anticipate a hike. One thing to note is that the idea that the Fed will avoid cutting rates in September so as not to appear to interfere with the general election, forgoing rate action when warranted by the data might also look politically motivated. The argument cuts both ways, so to speak."

In other news, the Federal Deposit Insurance Corporation released its latest "FDIC Quarterly Banking Profile," which says "Domestic deposits increased $190.7 billion (1.1 percent) from fourth quarter 2023, marking a second consecutive quarterly increase. Growth in transaction accounts led the increase (up $247.2 billion, or 4.0 percent), offsetting a decline in savings deposit balances (down $125.5 billion, or 1.5 percent). Estimated insured deposits increased $115.0 billion (1.1 percent) quarter over quarter. Estimated uninsured domestic deposits increased $63.3 billion (0.9 percent) during the quarter, the first reported quarterly increase since fourth quarter 2021. After seven consecutive quarters of growth, brokered deposits declined $10.2 billion (0.8 percent) from the previous quarter."

It explains, "Community banks reported an increase in domestic deposits of 1.0 percent ($22.8 billion) during first quarter 2024, down from the 1.2 percent increase reported in fourth quarter 2023. More than half of all community banks (61.9 percent) reported an increase in deposit balances from the previous quarter. Community banks reported growth in estimated insured deposits ($26.5 billion, or 1.7 percent), but a decline in estimated uninsured deposits ($3.4 billion, or 0.5 percent). In the first quarter, growth in interest-bearing deposits ($35.6 billion, or 2.1 percent) was somewhat offset by a decline in noninterest-bearing deposits ($12.9 billion, or 2.4 percent). Domestic deposits increased 2.9 percent ($64.0 billion) from one year earlier."

A press release, entitled, "FDIC-Insured Institutions Reported Net Income of $64.2 Billion," comments, "Reports from 4,568 commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) report aggregate net income of $64.2 billion in first quarter 2024, an increase of $28.4 billion (79.5 percent) from the prior quarter. A large decline in noninterest expense because of several substantial, non-recurring items recognized by large banks in the prior quarter, as well as higher noninterest income and lower provision expenses this quarter, contributed to the quarterly increase. These and other financial results for first quarter 2024 are included in the FDIC's latest Quarterly Banking Profile released today."

FDIC Chairman Martin Gruenberg comments, "The banking industry continued to show resilience in the first quarter. Net income rebounded, asset quality metrics remained generally favorable, and the industry's liquidity was stable. However, the banking industry still faces significant downside risks from the continued effects of inflation, volatility in market interest rates, and geopolitical uncertainty. In addition, deterioration in certain loan portfolios, particularly office properties and credit cards, continues to warrant monitoring. <b:>`_."

A press release titled, "Ramirez Asset Management Launches Government Money Market Fund in Partnership with the Hispanic Scholarship Fund," says, "Ramirez Asset Management ('RAM') has expanded its partnership with the Hispanic Scholarship Fund ('HSF'), one of the nation's largest nonprofit organizations supporting Hispanic American higher education. RAM and HSF's expanded partnership is tied to the December 2023 launch of the Ramirez Government Money Market Fund (RAMXX). RAM will proudly donate 10 percent of the new fund’s net management revenues to HSF to further support Latino/a students with the knowledge, resources, and support needed to access higher education. RAMXX is unique in the money fund marketplace, as it is one of a few managed by a diverse investment firm. As of April 30, 2024, the Ramirez Government Money Market Fund had $271 million in total fund assets with several Fortune 500 companies as pioneer investors in the Fund and supporters of the next generation of diverse leaders."

Sam Ramirez Jr., President and Chief Executive Officer of RAM, comments, "Since our founding, support for the Hispanic community has been in our organizational DNA. The launch of this money market fund is an extension of our belief in the work of the Hispanic Scholarship Fund and its impact on the Hispanic community. As a firm, we are proud to expand our support of Hispanic youth through this initiative."

The release explains, "The Ramirez Government Money Market Fund is a traditional government money market fund invested in securities issued by the U.S. government, its agencies and instrumentalities, including repurchase agreements that are collateralized solely by U.S. government securities. At this time, the Fund is available for direct investment and is accessible via the leading cash management portals: ICD (Treasury First), JP Morgan (Morgan Money), US Bank (Cash Solutions) and Treasury Curve. RAM is diligently working to make the fund available on other cash portals in the near future."

It states, "As one of the nation’s leading nonprofit organizations supporting higher education, HSF supports more than 25,000 Scholars at over 1,200 colleges, universities, and graduate schools across the country. Since its founding in 1975, HSF has awarded over $790 million in scholarships and provides a broad range of programs and support services for students, parents, HSF Scholars, and HSF Alumni."

Fidel Vargas, Chief Executive Officer of HSF, adds, "We are excited to partner with Ramirez on this initiative and applaud the organization for its ongoing support of HSF and commitment to the Hispanic community. I am proud to highlight that 90+ cents of every dollar spent by HSF goes directly to Scholarships, Support Services, Career Services and Programs, and the funding from this initiative will be no different. This partnership will directly contribute to our ability to provide support services and scholarships to thousands of parents, students, and HSF Scholars across the country." For more, see our Jan. 3, 2024 Crane Data News: "Ramirez Asset Management Launches Government MMF; Federated on 24."

In other news, J.P. Morgan's most recent "Short-Term Market Outlook And Strategy" writes that, "Yes, T-bill demand should remain robust.” They comment, “While the outcome of the upcoming November election remains highly uncertain, the one thing we know is that the US fiscal deficit will remain large in the coming years, regardless of who wins. As our Treasury strategists note, given Treasury’s current net coupon borrowing capacity and their estimates of the budget deficit forecasts over the medium term, Treasury will likely remain underfunded in FY26 and beyond. And while it would make sense to finance the funding gap by increased coupon auction sizes, as the deficit is likely to be more structural than cyclical in nature, the minutes to the May refunding meeting interestingly revealed that some members of TBAC felt that the recommended 15-20% T-bill share of the market could be revisited at a later date, given market developments and continued robust demand in the years since the original recommendation. Reading between the lines, it appears there is a possibility that the T-bill share of the market could migrate above the current recommended range over time."

The piece continues, "If so, we believe the markets will have no issues digesting the additional T-bill supply, with demand remaining robust. Indeed, even as T-bill outstandings have grown by $2tn over the past year, the impact on T-bill/SOFR spreads has been marginal thanks to the available pool of liquidity at the ON RRP, underscoring the sheer amount of demand for T-bills in the current market environment.... Perhaps more importantly, when we look at the buyer base of the T-bill market, we see the demand from several key buyers remaining substantial, if not expanding, in the near term."

JPM says on "Money Market Funds," "As of March-end, government and prime MMFs accounted for $2.1tn, or 35%, of the T-bill buyer base, a dramatic 19%-pt increase year-over-year.... Given the growth in MMF balances in 2023 as well as YTD, particularly in government funds, it’s no surprise that MMFs contributed to the bulk of the uptake in net T-bill issuance over the past year. Currently, MMFs are the largest buyers of T-bills, and we suspect they will continue to maintain a large presence in this market, particularly as they should likely keep WAMs elevated heading into an easing cycle. Moreover, implementation of the 2023 MMF reforms this year will likely further the demand for T-bills going forward, as institutional prime funds are required to hold more daily and weekly liquidity and as certain funds decide to convert from prime to government."

On the "Federal Reserve," they tell us, "To the extent the Fed were to shift their SOMA portfolio to shorter maturities, this could also increase the Fed’s presence in the T-bill market, which currently stands at 3% as of March-end. Our Treasury strategists believe a shift towards the Fed holding more T-bills makes sense, as it not only reduces the volatility of the Fed’s remittances but will also more closely match the maturity profile of the Treasury market given the events of the past year. To be sure, the notion of holding more T-bills on the Fed’s balance sheet has some support within the FOMC, as both Governor Waller and Chair Powell have commented on it. If this comes to fruition, we believe the Fed would reinvest maturing Agency MBS into T-bills when QT concludes. This would result in approximately $180bn in T-bill demand from the SOMA (assuming MBS paydowns continue to run at approximately $15bn/month)."

Discussing "Stablecoin issuers," they state, "Though stablecoin issuers only own 1% of the T-bill market currently, they are poised to grow meaningfully in the future should a stablecoin legislation come to fruition. This will not only fuel the growth of existing stablecoin issuers, but also open the doors for new entrants into this space. At present, there seems to be bipartisan support in both the House (led by Maxine Waters (D-CA) and Patrick McHenry (R-NC)) and Senate (led by Cynthia Lummis (R-WY) and Kristin Gillibrand (D-NY)) to get a stablecoin legislation done this year. If passed, this could substantially strengthen stablecoin issuers’ demand for T-bills, as the coins need to be backed at least 1:1 by HQLA such as Treasuries."

Finally, they cite, "Berkshire," explaining, "It is well-known that Berkshire Hathaway keeps its excess cash mainly invested in T-bills. Over the years, their T-bill position has grown so large that, as of March-end, it owned $158bn in T-bills, comprising 3% of the market. Berkshire Hathaway currently holds more T-bills than international organizations, stablecoin issuers, offshore MMFs, or LGIPs. At Berkshire’s annual meeting, Warren Buffett noted a lack of investment opportunities and attractive cash yields as reasons that are driving their positions higher, and a continuation of these dynamics could easily push their cash pile to $200bn by the end of 2Q24, and perhaps even higher over the medium term."

JPM adds, "Currently, the T-bill share of total outstanding Treasury debt is already above the top end of the 15-20% range, and even under baseline assumptions, our Treasury strategists don’t see a decline to below 20% until late 2026. Until the need for more borrowing capacity emerges in mid- to late-2025, that share is unlikely to rise significantly higher than 22%, as it stands. That said, the good news is that when that time comes there are structural buyers ready to digest that supply."

Allspring, formerly the Wells Fargo Funds, is the latest money market mutual fund family to announce an exit from the Prime Institutional space ahead of the SEC's pending emergency mandatory liquidity fee rules (which go into effect in early October). A Product Alert titled, "Allspring to Merge Two Money Market Funds," tells us, "The Allspring Funds Board of Trustees has approved the merger of the [$3.1 billion] Allspring Heritage Money Market Fund into the Allspring Government Money Market Fund. The merger is expected to take place at the close of business on or around August 16, 2024. Note that the Service Class of the Heritage Money Market Fund will merge into the Administrator Class of the Government Money Market Fund, and the Administrator Class of the Heritage Money Market Fund will merge into the Institutional Class of the Government Money Market Fund." (Note: We're still taking registrations for Money Fund Symposium in Pittsburgh June 12-14. We hope to see you there!)

In a Q&A, it asks, "What are some key benefits of the proposed fund merger?" They write, "Heritage Money Market Fund shareholders will benefit from a significant increase in fund scale." They also write, "What are some key similarities and differences between the merging fund and the acquiring fund? Both funds are managed by the Global Liquidity Solutions investment team, led by Jeffrey Weaver. The funds are managed to meet the requirements of Rule 2a-7 under the Investment Company Act of 1940."

The piece explains, "The funds employ different investment strategies. As an institutional prime money market fund, the Heritage Money Market Fund invests primarily in a wide range of high-quality, short-term U.S. dollar-denominated money market securities -- including, but not limited to, bank obligations such as time deposits and certificates of deposit, government securities, asset-backed securities, commercial paper, corporate bonds, municipal securities, and repurchase agreements. The Government Money Market Fund invests exclusively in U.S. government obligations and repurchase agreements collateralized by U.S. government obligations."

Finally, it asks, "Will the merger be a taxable event for shareholders?" Allspring replies "No. All of the mergers are expected to be tax-free exchanges for U.S. federal income tax purposes. However, to prevent adverse tax consequences for shareholders, the merging fund may make a distribution of income and/or capital gains in advance of the merger. Clients are encouraged to consult their tax advisors about how this may affect them. Can investors still transact in the merging and acquiring funds prior to the merger? Yes."

A "Prospectus Supplement filing for the Allspring Institutional Money Market Funds" states, "At a meeting held on May 28-30, 2024, the Board of Trustees of Allspring Funds Trust unanimously approved the merger of the Fund listed in the table below (the 'Target Fund') into another Fund of the Trust (the 'Acquiring Fund'), which is also listed below (the 'Merger'). The Merger was proposed by Allspring Funds Management, LLC, investment manager to the Funds." A table shows Allspring Heritage Money Market Fund as the Target Fund and Allspring Government Money Market Fund” as the Acquiring Fund.

The filing continues, "The Merger is intended to be a tax-free reorganization, and it is anticipated that Target Fund shareholders will not recognize any gain or loss for U.S. federal income tax purposes as a result of the Merger. Additionally, Target Fund shareholders will not incur any sales loads or similar transaction charges as a result of the Merger. The Merger is expected to occur on or about August 16, 2024. Prior to the Merger, shareholders of the Target Fund may continue to purchase and redeem shares subject to the limitations described in the Target Fund’s prospectuses."

It adds, "The Target Fund will be closed to new investors as of the close of business on June 14, 2024. No shareholder action is necessary. Additional information, including a description of the Merger and information about fees, expenses and risk factors, will be provided to Target Fund shareholders in a prospectus/information statement that is expected to be mailed to shareholders in July 2024. Following the Merger on August 16, 2024, all references to Allspring Heritage Money Market Fund are hereby removed."

Allspring also released a second Product Alert, "Portfolio Manager Changes to Five Allspring Money Market Funds," which states, "Allspring Global Investments announced today that Laurie White, senior portfolio manager on the Global Liquidity Solutions team, has made a personal decision to retire from the firm. We thank Laurie for the significant contributions she has made over the years, and we wish her all the best in retirement. The Global Liquidity Solutions team and the Allspring money market funds continue to benefit from a tremendous depth and experience in portfolio management, risk management, and credit research."

It comments, "Effective September 1, 2024, Laurie will be removed from the Allspring Funds listed in the table below. Effective today, Vladislav (Vlad) Stavitskiy, senior portfolio manager on the Global Liquidity Solutions team, will be added to the same Allspring Funds." He joins Jeffrey Weaver and Michael Bird.

Allspring adds, "Vladislav (Vlad) Stavitskiy is a senior portfolio manager for the Global Liquidity Solutions team at Allspring Global Investments. He specializes in managing taxable money market funds and enhanced cash separate account mandates. Vlad is instrumental in the development of the team's proprietary application for portfolio and risk management. He joined Allspring from its predecessor firm, Wells Fargo Asset Management (WFAM)."

In related news, a "Form N-1A filing for the UBS Series Funds," states, "UBS Series Funds has filed this Amendment No. 93 to the Registration Statement of the Trust on Form N-1A (File No. 811-08767) pursuant to Section 8(b) of the Investment Company Act of 1940, as amended. Shares of beneficial interest in Limited Purpose Cash Investment Fund, a series of the Trust, are not being registered under the Securities Act of 1933, as amended, since such shares will be issued solely in private placement transactions that do not involve any 'public offering' within the meaning of Section 4(a)(2) of the 1933 Act."

It continues, "Only investment companies, insurance company separate accounts, common or commingled trust funds or other organizations, entities or investors that are 'accredited investors' within the meaning of Regulation D under the 1933 Act may make investments in the shares of the fund. Such investors are referred to herein as 'shareholders.' This Registration Statement is not an offer to sell, or the solicitation of an offer to buy, any shares in the fund."

Discussing the $5.6 billion "Limited Purpose Cash Investment Fund," UBS says, "The purpose of this amendment is to update certain information contained in Parts A and B for Limited Purpose Cash Investment Fund, a series of UBS Series Funds. At the recommendation of UBS Asset Management (Americas) LLC, the fund's investment adviser, the Board of Trustees of the Trust approved the conversion of the fund to operate as a 'government money market fund' as defined in Rule 2a-7 under the Investment Company Act of 1940, as amended."

Finally, they add, "As a result, the fund will adopt a new investment policy to invest at least 99.5% of its total assets in cash, government securities and/or repurchase agreements that are 'collateralized fully' by cash or government securities. The Conversion will become effective on or about August 27, 2024. After the Conversion, the fund will continue to calculate its net asset value to four decimals (e.g., $1.0000) using market-based pricing, and its share price will fluctuate."

For more on recent Prime Institutional MMF liquidations and conversions, see these Crane Data News stories: "DWS Liquidating ESG Liquidity Fund, 7th Prime Inst to Exit" (5/22/24), "Dreyfus Files to Liquidate Cash Management Prime Inst MMF, Tax Exempt" (5/13/24), "Goldman Files to Liquidate Prime Inst MMFs; Barron's: MMFs Tempting" (4/22/24), "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).) For more on liquidations in the ESG MMF space, see these stories, "UBS Latest to Abandon ESG Money Funds; JNL Liquidates Money Fund" (10/13/23) and "Morgan Stanley Latest to Abandon ESG MMFs; Weekly, ICI Portfolio Holds" (8/16/23).

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