News Archives: May, 2025
Fitch Ratings published "U.S. Local Government Investment Pools Monitor: 1Q25," which states, "Fitch Ratings' two local government investment pool (LGIP) indices reported an aggregate asset increase in the first quarter of 2025 (1Q25) driven by Liquidity LGIPs, consistent with seasonal flow trends. Total assets for the Fitch Liquidity LGIP Index and the Fitch Short-Term LGIP Index reached $655.5 billion at quarter end, marking increases of $9.3 billion qoq and $40.5 billion yoy. (Fitch's tables shows the Liquidity LGIP total at just $430.7 billion and the Short-Term LGIP total at $224.8 billion.) The Fitch Liquidity LGIP Index rose by 2.3% qoq while the Fitch Short-Term LGIP Index fell by 0.2% qoq. These changes contrast with an average increase of 6.2% and average decrease of 1.8%, respectively, during the first quarter over the past three years."
The report continues, "Weighted average maturities (WAMs) in the money market fund (MMF) indices extended in 1Q25, as the Fed held rates steady due to economic uncertainty and inflation expectations. The WAM of the Fitch Liquidity LGIP Index increased to 40 days, still higher than prime '2a-7' MMFs at 31 days. The Fitch Short-Term LGIP Index ended the quarter with a duration of 1.29 years, up 2% since last quarter. Both Fitch indices ended 1Q25 with decreased average yield profiles, with net yields averaging 4.35% for the Liquidity Index and 4.23% for the Short-Term Index."
Fitch also says, "The Fitch Liquidity LGIP Index increased exposure to Repurchase Agreements by 1.67% while reducing exposure to Government Agencies by 1.73% qoq. Managers also added 2.79% exposure to Commercial Paper and Corporates in this quarter."
In other news, the Federal Reserve Bank of New York published, "Nonbanks and Banks: Alone or Together?" in its Liberty Street Economics blog. They explain, "Nonbank financial institutions (NBFIs) constitute a variety of entities -- fintech companies, mutual funds, hedge funds, insurance companies, private debt providers, special purpose vehicles, among others -- that have become important providers of financial intermediation services worldwide. But what is the essence of nonbank financial intermediation? Does it have any inherent advantages, and how does it interact with that performed by banks? In this Liberty Street Economics post, which is based on our recent staff report, we provide a model-based survey of recent literature on nonbank intermediation, with an emphasis on how it competes, or cooperates, with traditional banks."
They write, "The traditional perspective to examining financial intermediation consists of grouping entities (for example, banks, broker-dealers, and finance companies) into 'sectors' that are assumed to carry on similar types of activities over time. Such an entity approach takes the institution or legal form of entity as the primitive object of study to then evaluate how these organizations operate. This approach is less useful in modern times as the boundaries between organizational entities and activities are increasingly fluid."
The blog continues, "For example, modern banks are increasingly engaged in a variety of services usually perceived as 'nonbank' activities, such as underwriting loans, warehousing and servicing the loans, and providing insurance. Likewise, nonbank entities have been engaging in bank-type strategies: for example, private credit firms lend to corporations, and money market fund deposits are available on–demand (similar to uninsured deposits)."
It comments, "Instead, the functional perspective considers 'economic functions' -- such as providing safe assets and managing incentives -- as the more appropriate unit of analysis. Indeed, Merton (1995) argues that such economic functions -- which fulfill a basic economic need -- tend to be more stable, with the observed entities simply reflecting the best institutional structures to carry out those functions under given economic conditions. This view is permeating regulatory domains, too, precisely in the context of NBFIs performing activities like those carried out by other, more regulated entities."
The piece says, "One question that we ask is how macroeconomic conditions affect the rise and decay of financial strategies linked to NBFIs. We study two important cases: special purpose vehicles (SPVs) issuing securitized products as a method to provide safe assets and private credit companies lending to risky borrowers that must be incentivized to repay."
It adds, "The way through which securitization creates safe claims is by pooling many related assets to eliminate their idiosyncratic risk, and then tranching (that is, segmenting) the resulting payouts to provide payment schedules that differ in their risk. Importantly, the payments of the senior (and safest) part of the resulting security can be nontrivial due to the diversification at play: they constitute a minimum return, assuring a guaranteed payment to investors in the senior tranche."
The blog states, "We compare this strategy to 'mutual fund-like' strategies featuring claims that, to provide a safe attractive payment, rely on the possibility of liquidating the underlying assets before these mature. Thus, this strategy offers an 'early escape' from adverse scenarios that will be realized in the future, whereas securitization offers minimum payouts precisely linked to those adverse states."
Finally, it adds, "In this post, we discussed a recent survey on NBFIs that helps illuminate how they might optimally specialize vis-à-vis banks and made applications to special purpose vehicles and private debt provision. Our approach starts with economic functions that fulfill fundamental needs of households and then derives intermediation strategies that best provide these functions. This exercise allows us to better understand the key drivers behind the emergence of NBFIs and how they compete or cooperate with banks."
Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of May 16) includes Holdings information from 62 money funds (unchanged from two weeks ago), or $3.623 trillion (down from $3.633 trillion) of the $7.325 trillion in total money fund assets (or 49.5%) tracked by Crane Data. (Note: Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our May 12 News, "May Money Fund Portfolio Holdings: FICC Repo Hits $1T, T-Bills Drop.")
Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.638 trillion (up from $1.626 trillion two weeks ago), or 45.2%; Repurchase Agreements (Repo) totaling $1.311 trillion (down from $1.341 trillion two weeks ago), or 36.2%, and Government Agency securities totaling $329.7 billion (down from $330.2 billion), or 9.1%. Commercial Paper (CP) totaled $140.7 billion (up from two weeks ago at $133.7 billion), or 3.9%. Certificates of Deposit (CDs) totaled $79.0 billion (down from $82.3 billion two weeks ago), or 2.2%. The Other category accounted for $85.3 billion or 2.4%, while VRDNs accounted for $39.2 billion, or 1.1%.
The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.638 trillion (45.2% of total holdings), Fixed Income Clearing Corp with $417.5B (11.5%), the Federal Home Loan Bank with $208.8 billion (5.8%), JP Morgan with $120.8B (3.3%), Citi with $89.4B (2.5%), RBC with $86.3B (2.4%), BNP Paribas with $85.2B (2.4%), Federal Farm Credit Bank with $81.8B (2.3%), Bank of America with $54.6B (1.5%) and Barclays PLC with $45.9B (1.3%).
The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($287.5B), JPMorgan 100% US Treas MMkt ($247.5B), Goldman Sachs FS Govt ($247.2B), Fidelity Inv MM: Govt Port ($235.7B), BlackRock Lq FedFund ($167.2B), Morgan Stanley Inst Liq Govt ($166.3B), Fidelity Inv MM: MM Port ($154.9B), State Street Inst US Govt ($152.2B), BlackRock Lq Treas Tr ($150.6B), and Dreyfus Govt Cash Mgmt ($127.6B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
In other news, Barron's writes, "Morgan Stanley Says SEC Closed Cash-Sweep Investigation," which explains, "Morgan Stanley said the Securities and Exchange Commission's enforcement division closed its investigation into the company's cash sweep practices and doesn't intend to recommend an enforcement action against the firm. The wealth management firm disclosed the update in its quarterly report filed with the SEC on May 5."
The piece says, "The end of the SEC investigation, which Morgan Stanley disclosed last summer, concludes one of several legal threats to the company based on how Morgan Stanley moves brokerage clients' uninvested cash to an affiliate bank deposit program that pays little interest to clients. The quarterly filing notes that Morgan Stanley 'is responding to requests from a state securities regulator regarding brokerage account cash balances swept to the affiliate bank deposit program.' The company is also being sued by a retail investor over its cash sweep practices."
Barron's explains, "Brokerage firms have long swept clients' idle cash into sweep accounts that pay little interest. The practice garnered little attention when prevailing interest rates were near zero, but that changed in recent years as the Federal Reserve hiked its benchmark rate. With many money-market funds and online savings accounts paying 4% or more, investors have become more attuned to what they are earning on cash. Importantly, advisory accounts are held to a different and higher standard than brokerage accounts. In July 2024, Morgan Stanley raised rates on some customers' uninvested cash in advisory accounts."
They add, "Last year, customers filed lawsuits accusing brokerage firms such as Morgan Stanley, LPL Financial, and Ameriprise Financial of breach of fiduciary duty over cash sweep practices in brokerage accounts. The SEC also began investigations of some firms' practices. In January, Merrill Lynch and two units of Wells Fargo agreed to pay $60 million in combined penalties to settle SEC charges that they failed to consider the best interest of clients when designing automatic cash sweep programs that paid low interest rates to customers."
Finally, Courthouse News Service also writes about sweeps in an article titled, "Finance brokerage firm looks to dodge claims it put customers' money into low-return cash sweep." They state, "Independent broker-dealer LPL Financial argued ... that its customers can't claim the company unjustly enriched itself by automatically taking uninvested money in their accounts and depositing it into their cash sweep programs that paid little in interest because the business doesn't have a fiduciary duty to clients."
They quote Joseph Floren of Morgan Lewis & Bockius, LPL Financial's attorney, "This free-floating fiduciary duty doesn't supersede a contract. It's not reasonable to expect that LPL acted in the customer's interests." The company, he added, "was entitled to every dollar it collected."
The article adds, "In a class action filed last year, Michigander Daniel Peters said he opened simple accounts with LPL where his cash was automatically funneled into two different cash sweep programs. A cash sweep is a method used by investment firms to move uninvested cash into FDIC-insured accounts or money market funds.... LPL argues that not only were the programs voluntary, but the company disclosed that interest rates customers received would be low because of fees paid to LPL. The company says also disclosed with customers that the programs created a conflict of interest between it and customers because it relies on the fees it collects as an important stream of revenue and that without it, the company's other fees would increase."
Federal Reserve Bank of Dallas President Lorie Logan hosted a panel on "The Increasing Role of Nonbank Institutions in the Treasury and Money Markets" at the Federal Reserve Bank of Atlanta 2025 Financial Markets Conference. The panel featured Lou Crandall of Wrightson ICAP, Deirdre Dunn of Citigroup Global Markets and chair of the Treasury Borrowing Advisory Committee, and Nate Wuerffel of BNY. In Logan's "Opening remarks," she comments, "Our topic this afternoon is a timely one: the role of nonbank financial institutions (NBFIs) in Treasury and money markets.... The Treasury market and money markets sit at the very core of the financial system. The Treasury market finances the U.S. government, provides a safe and liquid asset relied on by investors worldwide, and creates a benchmark for broader long-term interest rates. Money markets establish overnight risk-free interest rates that are building blocks for all other asset prices, they keep credit flowing through the economy by financing a wide range of assets, and they are where the Fed implements the stance of monetary policy. And these markets are tightly linked because one of the main money markets is the repo market, where Treasury securities are financed."
Logan explains, "These markets are extraordinarily strong, deep and liquid, as befits their systemic role. But they are not invulnerable. Observers have cited potential fault lines including limited intermediation capacity, buildups of leverage and uneven risk management. When economic shocks occur, market participants often seek to transfer large amounts of risk and raise large amounts of liquidity in Treasury and money markets.... [But] there is the potential -- as we saw, for example, at the onset of the COVID-19 pandemic -- for the demand for intermediation to overwhelm the supply of intermediation and create market dysfunction."
She says, "In principle, approaches to enhancing the resilience of intermediation capacity could address both banks and nonbanks. I'm sure our panelists and I could fill an entire session with ideas on bank intermediation. But our focus today is going to be the rest of the market: the nonbanks. I'm looking forward to a robust discussion of the state of Treasury intermediation by NBFIs and what can be done to strengthen it."
Logan comments, "Excessive leverage can amplify challenges from insufficiently elastic intermediation in stress episodes. Perhaps precisely because repo markets ordinarily function so well and Treasury securities are so safe and liquid, it is possible for NBFIs to obtain large amounts of leverage against them. Yet levered positions can be prone to unwind rapidly, adding to intermediation demands. Buildups of NBFI leverage in trades such as the cash-futures basis can, therefore, be cause for concern if the risks are not managed appropriately. Some observers had voiced worries about such a buildup earlier this year, so it was reassuring to see that the basis trade did not materially amplify the market volatility we experienced in early April."
She states, "Strong risk management mitigates vulnerabilities from leverage, and the Securities and Exchange Commission mandate for broader central clearing marks an important step to strengthen risk management in the Treasury cash and repo markets. Data collected by the Office of Financial Research shows that a large fraction of noncentrally cleared bilateral repos are conducted with no haircut. In some circumstances, other components of a cash borrower's portfolio may effectively provide the margin on these trades. But that is not always the case. And repos that are margined on a portfolio basis could be more difficult to move to different counterparties in times of stress. Broader central clearing will ensure risk management is stronger, more uniform and therefore more resilient."
Logan adds, "Lastly, as my Fed colleague Roberto Perli, manager of the System Open Market Account, noted in a recent speech, resilient funding liquidity makes the market as a whole more resilient. A strong Federal Reserve monetary policy implementation framework forms an important part of that resilience by ensuring ample liquidity will remain available across money markets at rates within or near the target range for the fed funds rate. In my view, rate control is not just about keeping the fed funds rate in the target range. The fed funds market is small. And the FOMC's desired stance of monetary policy must transmit smoothly into larger and broader markets -- especially the repo market."
In other news, money fund yields (7-day, annualized, simple, net) were unchanged at 4.11% on average during the week ended Friday, May 16 (as measured by our Crane 100 Money Fund Index), after falling 3 bps and rising 2 bps the previous two weeks. Fund yields should remain relatively flat until the Fed moves rates again. They've declined by 95 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they've declined by 52 bps since the Fed cut rates by 1/4 point on 11/7. Yields were 4.14% on 3/31/25, 4.16% on 2/28/25, 4.19% on 1/31/25, 4.28% on average on 12/31/24, 4.45% on 11/30/24, 4.65% on 10/31, 4.75% on 9/30, 5.10% on 8/31, 5.13% on 7/31 and 6/28, 5.14% on 3/31 and 5.20% on 12/31/23.
The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 682), shows a 7-day yield of 4.01%, unchanged in the week through Friday. Prime Inst money fund yields were unchanged at 4.25% in the latest week. Government Inst MFs were down 1 bp to 4.11%. Treasury Inst MFs were up 1 bp at 4.07%. Treasury Retail MFs currently yield 3.83%, Government Retail MFs yield 3.82%, and Prime Retail MFs yield 4.01%, Tax-exempt MF 7-day yields were up 39 bps to 2.37%.
Assets of money market funds rose by $15.6 billion last week to $7.325 trillion, according to Crane Data's Money Fund Intelligence Daily. For the month of May (MTD), MMF assets have increased by $25.5 billion, after decreasing $24.4 billion in April, increasing by $2.8 billion in March, $94.2 billion in February, $52.8 billion in January, $110.9 billion in December, $200.5 billion in November, $97.5 billion in October and $149.8 billion in September. Weighted average maturities were at 37 days for the Crane MFA and 38 days the Crane 100 Money Fund Index.
According to Monday's Money Fund Intelligence Daily, with data as of Friday (5/16), 116 money funds (out of 794 total) yield under 3.0% with $145.7 billion in assets, or 2.0%; 255 funds yield between 3.00% and 3.99% ($1.312 trillion, or 17.9%), 423 funds yield between 4.0% and 4.99% ($5.867 trillion, or 80.1%) and following the recent rate cut there continue to be zero funds yielding 5.0% or more.
Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was down 1 bp at 0.40%. The latest Brokerage Sweep Intelligence, with data as of May 16, shows one change over the past week. RW Baird lowered rates to 1.40% for accounts of $1 to $999K, to 2.20% for accounts of $1M to $1.9M, and to 2.86% for accounts of $5 million or greater. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
Finally, Barron's writes "Stablecoin Bill Set to Pass Senate. What It Means for Crypto." They tell us, "The crypto industry appears poised to grab its first major legislative victory as Congress moves closer to passing a bill to regulate stablecoins.... As soon as Monday, the Senate plans to hold a key procedural vote on the so-called GENIUS Act. Among other provisions, the bill would require stablecoins, whose value is typically pegged to the dollar, to hold reserves of liquid, safe assets like Treasury bills. Issuers would also have to follow anti-money-laundering and terrorism finance rules and to give holders of coins priority to recoup their money in a bankruptcy."
The article explains, "Stablecoins underpin most of the $3.3 trillion market for Bitcoin and other crypto tokens. Rather than pay cash for a token, traders typically use stablecoins, which together have a market value of about $250 billion. The largest such token, called USDT, is issued by Tether Holdings. U.S.-based Circle Internet Financial issues USDC, the second-largest token, which was founded in partnership with crypto trading platform Coinbase Global."
Stradley Ronon Partner Jamie Gershkow and Associate Geena Marzouca recently published an article in The Investment Lawyer titled, "Are We Trying to Kill Institutional Prime Funds? -- Money Market Funds in a Post Reform Era." The two explain, "At a meeting of the US Securities and Exchange Commission (SEC) adopting significant reforms to money market fund regulation, Commissioner Peirce posed a pointed question: Are we trying to kill institutional prime funds? With the `final compliance date for money market fund reform behind us, this article looks at whether Commissioner Peirce's concern became reality and assesses the overall impact of the reforms on the money market fund industry. This article reviews considerations related to the implementation of certain aspects of the reforms, including liquidity fees, share cancellation, increased liquidity requirements and stress testing, and board oversight of money market funds under amended Rule 2a-7 of the Investment Company Act of 1940 (1940 Act)."
In a brief "Refresher on the 2023 Money Market Fund Reforms," they comment, "On July 12, 2023, the SEC adopted amendments to Rule 2a-7 under the 1940 Act that significantly impacted the operation and management of money market funds, particularly institutional prime and institutional tax-exempt money market funds. The key provisions of the SEC's rulemaking package included: Removing redemption gates from Rule 2a-7. Modifying and expanding the liquidity fee framework: - Adopting a mandatory liquidity fee frame work for institutional prime and institutional tax-exempt money market funds. - Amending the discretionary liquidity fee framework for money market funds by delinking weekly liquid assets from liquidity fee requirements. — Adding the ability for a board of directors/trustees (the board) to delegate the responsibility to make liquidity fee determinations."
The key provisions also include: Modifying portfolio liquidity requirements: — Increasing daily liquid asset and weekly liquid asset requirements to 25 percent and 50 percent of total assets, respectively. — Requiring board notification and public SEC filing if a money market fund has less than 12.5 percent or 25 percent of total assets invested in daily liquid assets or weekly liquid assets, respectively. Modifying stress testing requirements to require testing of the ability to maintain a sufficient liquidity level under specified hypothetical events. Permitting stable net asset value (NAV) money market funds to use share cancellation in a negative interest rate event, subject to board determinations and disclosure requirements. Amending SEC reporting requirements on Forms N-MFP, N-1A, N-CR and PF to require additional items to be reported to the SEC [and].... The SEC adopted a tiered compliance framework in connection with the reforms, with the final compliance date related to mandatory liquidity fees occurring on October 2, 2024."
Stradley's piece says, "As Commissioner Peirce has highlighted, the sweeping nature of the reform package posed the significant potential to kill the institutional prime money market fund sector. This is largely due to the complexity of the reforms and their impact on the overall institutional money market fund product as a cash management vehicle. While the institutional prime money market fund sector still exists, it has shrunk to a shell of its prior form. In fact, following the adoption of the SEC's reforms, over 30 institutional prime and institutional tax-exempt money market funds either converted to government money market funds or retail money market funds or liquidated in advance of the compliance date for mandatory liquidity fees."
It explains, "[P]rior to the adoption of the SEC's money market fund reforms, the institutional prime and institutional tax-exempt money market fund sector consisted of 52 separate series with $666.5 billion in assets under management, representing approximately 11.2 percent of the overall money market fund sector. By October 31, 2024 (the month end immediately following the compliance date for mandatory liquidity fees), the institutional prime and institutional tax-exempt money market fund sector shrunk to only 20 separate series with $349.1 billion in assets under management, representing approximately 5 percent of the overall money market fund sector. This means that between June 30, 2023 and October 31, 2024, the institutional prime and tax-exempt money market fund sector shrunk by nearly 50 percent in assets under management and over 60 percent in number of funds offered. Many sponsors exited the institutional prime and institutional tax-exempt sector entirely."
The piece adds, "In addition, the remaining institutional prime and institutional tax-exempt money market funds have changed various elements of their structure that previously had provided benefits to investors looking for cash management vehicles. The remaining public institutional prime and institutional tax-exempt money market funds, for example, no longer offer intraday liquidity through multiple NAV strikes per day due to operational hurdles in being able to implement the mandatory liquidity fee framework in a multiple NAV strike money market fund. Further, various institutional money market funds have moved their cut-off time for purchase and redemption orders to earlier in the day in order to preserve the ability to offer same day settlement while providing sufficient time to determine whether the fund is required to impose a mandatory liquidity fee and calculate and apply the mandatory liquidity fee, if any."
Gershkow and Marzouca write, "The mandatory liquidity fee framework is a maze of operational complexities and challenges. Under amended Rule 2a-7, if an institutional prime or institutional tax-exempt money market fund has total daily net redemptions that exceed 5 percent of the fund's net assets (or such smaller amount as the board or its delegate determines), then the fund must apply a liquidity fee to all shares that are redeemed at a price computed on that day. The calculation of the amount of a liquidity fee must be based on a good faith estimate of the transaction costs and market impacts of selling a pro rata amount of each security in its portfolio (a 'vertical slice' of the fund's portfolio) to meet net redemptions."
They state, "As of December 31, 2024, no money market funds have implemented a liquidity fee. While the SEC estimated that only 3.2 percent of institutional funds would cross a 5 percent net redemption threshold on a given day, and that liquidity costs would typically be below the de minimis exception of 0.01 percent of shares redeemed in normal market conditions, the unlikelihood of imposing a mandatory liquidity fee did not reduce the resources and expenditures necessary to build the framework to implement mandatory liquidity fees should they be required on any given business day. The complexities associated with implementing the mandatory liquidity fee requirements resulted in increased costs and resources for those funds that determined to continue to operate as institutional prime or institutional tax-exempt money market funds."
Stradley's article also says, "In addition to these operational difficulties (and the costs associated with overcoming such difficulties), questions also remain regarding the ongoing commercial implications of the SEC's new requirements and the level of investor interest in a cash management vehicle that could impose a liquidity fee on redemptions on any given business day (which fee would not be known to investors at the time a redemption order was submitted and which fee is not subject to a maximum cap under Rule 2a-7). Taken altogether, these factors, many of which were raised in various comment letters submitted to the SEC, contributed to the significant decrease in the number and assets under management of institutional prime and institutional tax-exempt money market funds. The overall impact of these reforms thus far begs the question of whether an empirical basis may develop for asking the SEC to reconsider the mandatory liquidity fee requirements."
Finally, the piece concludes, "While institutional prime funds have lived to see another day, the SEC's 2023 money market fund reform package significantly transformed the money market fund sector and reduced investor choice in investment product offerings. This transformation includes, among other changes, a substantial reduction in the number of, and assets in, institutional prime and institutional tax-exempt money market funds and the removal or modification of key features of such funds. The full impact and potential consequences of the amendments to Rule 2a-7 remain to be seen."
S&P Global Ratings published "U.S. Domestic 'AAAm' Money Market Fund Trends (First-Quarter 2025)" recently, which tells us, "Rated MMF assets were stable quarter over quarter. Government and prime MMFs experienced modest growth early in the year, which was partially related to institutional investors building up cash amid the uncertainty around the U.S. administration's policies. Near the end of the first quarter, rated MMFs saw outflows in line with seasonal patterns. We expect that MMF assets will experience limited growth until the tax season settles."
They write, "Seven-day net yields for rated government and prime MMFs continued to decline. The Federal Reserve didn't change its policy rate in its January or March meetings; accordingly, seven-day net yields for rated government and prime MMFs fell 15 basis points and 11 basis points, respectively -- smaller declines than in the prior quarter. In the past 12 months, seven-day net yields for rated MMFs have fallen roughly 100 basis points overall."
The piece continues, "In contrast with prior quarters, repurchase agreement (repo) exposure in rated government MMFs increased in the first quarter, and Treasury bill exposure decreased correspondingly. Average repo allocation moved to 39% from 35% the previous quarter, which included additional usage of the Fed's reverse repo program. The shift into repo was a response to lower Treasury bill supply. The Treasury Department is expected to suppress Treasury bill issuance until there's a resolution with respect to the federal debt ceiling. Allocations to U.S. agency securities in rated government MMFs were relatively unchanged."
It states, "Rated prime MMFs relied less on repo in the first quarter, with average repo exposure decreasing to 18% from 24%. Managers reallocated mostly into commercial paper and bank deposits. We observed managers also adding corporate floaters and asset-backed commercial paper (ABCP) as a function of higher supply during the quarter. According to Federal Reserve Economic Data, ABCP outstanding reached $375 billion, the highest level recorded in the past five years. Treasury bill exposure decreased to 2% from 3% over the quarter."
S&P tells us, "While the norm of the last 12 months has been larger movements in average weighted-average maturities (WAMs), both rated government and prime funds moved little in the first quarter. Rated government MMFs reduced WAM by one day on average, and rated prime MMFs held steady. Managers will likely remain hesitant to move WAMs meaningfully until there's more certainty with respect to policy and the markets.... The distribution of net asset values (NAVs) per share for rated MMFs was stable in the first quarter. At the end of March, the range for rated fund NAVs was 0.9995-1.0009."
S&P also published, "European 'AAAm' Money Market Fund Trends (First Quarter 2025)." This update says, "Money market funds continued to be attractive to investors in the first quarter of 2025, as Europe-domiciled MMFs rated by S&P Global Ratings reached an all-time high in terms of assets under management (AUM), totaling €1.2 trillion as of March 31, 2025. In the quarter, net assets in euro-denominated funds grew 3.2% to €271.5 billion, sterling-denominated funds were up 2.6% to £245.2 billion, and U.S. dollar-denominated funds saw growth of 3.4% with net assets totaling over $704 billion. This marks the fourth consecutive quarter-on-quarter growth for MMFs across the three currencies. When comparing net assets to the first quarter of 2024, MMFs in all three currencies have seen double-digit growth with euro funds (37.1%), sterling funds (10.3%), and U.S. dollar funds (15.5%)."
It explains, "The European Central Bank (ECB) and the Bank of England (BoE) cut interest rates in the first quarter of 2025, while the U.S. Federal Reserve (the Fed) left the federal funds rate unchanged with a target range of 4.25% to 4.5%. The ECB cut rates by 25 basis points (bps) at both its February and March policy meetings, lowering the deposit rate from 3.0% to 2.5%. The BoE reduced its bank rate by 25bps to 4.5% in February. Following the two rate cuts by the ECB, euro MMFs seven-day yields fell 49bps in the quarter, averaging 2.46%. Sterling MMFs yields dropped by 24bps, averaging 4.43%, while U.S. dollar-denominated funds average seven-day yields were 4.29%, a decline of 14 bps from the previous quarter. Weighted-average maturities (WAM) increased slightly in euro and sterling MMFs by two and three days, respectively. For U.S. dollar MMFs, their WAMs decreased by three days."
Finally, S&P posted "'AAAm' Local Government Investment Pool Trends (First-Quarter 2025)," which states, "Rated pools experienced typical inflows during the first quarter of this year -- mostly because of seasonal tax revenue collections balances invested within these funds -- and rated LGIP assets overall rose to $419 billion, a new high. Government LGIPs grew to $109billion (up 10.3% from the prior quarter), and prime LGIPs increased to $310 billion (up 6.7%). We expect assets to plateau in the second quarter, since state and local governments' spending patterns may lead to drawdowns, consistent with historical trends."
The update says, "LGIP yields continued to decline in the first quarter and are roughly 100 basis points (bps) lower than where they were in early 2024. After the Federal Reserve's rate cut in December, government LGIP yields fell to 4.27% (down 14 bps from the prior quarter), and prime LGIP yields fell to 4.41% (down 17 bps from the prior quarter)."
It adds, "Pools have been cautious in their approach to investment allocation, with minimal change. As mentioned, both prime and government funds have slightly reduced their exposure to U.S. government securities, possibly because of market volatility and rate policy uncertainty. We expect that managers will be strategic with respect to certain government maturities later this year as expectations evolve regarding congressional action related to the debt ceiling. Government funds experienced a small increase in their exposure to repurchase agreements and agency floaters, whereas prime funds increased their allocation to commercial paper."
Crane Data's latest Money Fund Intelligence International shows that assets in European or "offshore" money market mutual funds inched lower over the past 30 days to $1.506 trillion, after hitting a record high $1.518 trillion the month prior, while yields were flat or lower. Assets for USD and EUR MMFs fell while GBP MMFs were flat over the past month. Like U.S. money fund assets, European MMFs repeatedly hit record highs in 2023, 2024 and early in 2025 but have paused in recent weeks. These U.S.-style money funds, domiciled in Ireland or Luxembourg and denominated in US Dollars, Pound Sterling and Euros, decreased by $12.6 billion over the 30 days through 5/13. The totals are up $73.1 billion (5.1%) year-to-date for 2025, they were up $235.3 billion (19.7%) for 2024 and 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.)
Offshore US Dollar money funds decreased $9.4 billion over the last 30 days and are up $39.0 billion YTD to $782.7 billion; they increased $94.1 billion in 2024. Euro funds decreased E6.2 billion over the past month. YTD, they're up E16.3 billion to E334.1 billion, for 2024, they increased by E82.9 billion. GBP money funds increased L2.7 million over 30 days, and they're up L21.1 billion YTD at L275.7B, for 2024, they rose L19.3 billion. U.S. Dollar (USD) money funds (260) account for over half (52.0%) of the "European" money fund total, while Euro (EUR) money funds (181) make up 24.2% and Pound Sterling (GBP) funds (171) total 23.8%. We summarize our latest "offshore" money fund statistics and our Money Fund Intelligence International Portfolio Holdings (which went out to subscribers Wednesday), below.
Offshore USD MMFs yield 4.23% (7-Day) on average (as of 5/13/25), down 3 basis points from a month earlier. Yields averaged 4.20% on 12/30/22 and 0.03% on 12/31/21. EUR MMFs, which left negative yield territory in the second half of 2022, yield 2.17% on average, down 22 bps from a month ago and up from 1.48% on 12/30/22 and -0.80% on 12/31/21. Meanwhile, GBP MMFs broke above the 5.0% barrier 21 months ago, but they broke back below 5.0% 10 months ago. They now yield 4.29%, down 13 bps from a month ago, but up from 3.17% on 12/30/22. Sterling yields were 0.01% on 12/31/21.
Crane's May MFI International Portfolio Holdings, with data as of 4/30/25, show that European-domiciled US Dollar MMFs, on average, consist of 26% in Commercial Paper (CP), 16% in Certificates of Deposit (CDs), 25% in Repo, 18% in Treasury securities, 14% in Other securities (primarily Time Deposits) and 1% in Government Agency securities. USD funds have on average 50.6% of their portfolios maturing Overnight, 5.6% maturing in 2-7 Days, 8.4% maturing in 8-30 Days, 8.1% maturing in 31-60 Days, 7.7% maturing in 61-90 Days, 12.5% maturing in 91-180 Days and 7.1% maturing beyond 181 Days. USD holdings are affiliated with the following countries: the US (37.8%), France (11.3%), Japan (9.5%), Canada (8.4%), Australia (5.2%), Germany (4.3%), Sweden (3.8%), the U.K. (3.6%), the Netherlands (3.1%) and Finland (2.7%).
The 10 Largest Issuers to "offshore" USD money funds include: the US Treasury with $146.3 billion (18.5% of total assets), Fixed Income Clearing Corp with $47.5B (6.0%), JP Morgan with $29.3B (3.7%), Credit Agricole with $21.5B (2.7%), Nordea Bank with $20.9B (2.6%), BNP Paribas with $20.7B (2.6%), Sumitomo Mitsui Banking Corp with $17.6B (2.2%), Mizuho Corporate Bank Ltd with $17.3B (2.2%), Australia & New Zealand Banking Group Ltd with $16.4B (2.1%), and Toronto-Dominion Bank with $15.7B (2.0%).
Euro MMFs tracked by Crane Data contain, on average 38% in CP, 21% in CDs, 19% in Other (primarily Time Deposits), 20% in Repo, 2% in Treasuries and 0% in Agency securities. EUR funds have on average 17.9% of their portfolios maturing Overnight, 28.8% maturing in 2-7 Days, 12.1% maturing in 8-30 Days, 11.0% maturing in 31-60 Days, 9.7% maturing in 61-90 Days, 11.4% maturing in 91-180 Days and 9.1% maturing beyond 181 Days. EUR MMF holdings are affiliated with the following countries: France (29.2%), Japan (10.5%), the U.S. (9.3%), Canada (8.5%), Germany (7.2%), the Netherlands (5.2%), the U.K. (5.0%), Spain (3.7%), Austria (3.4%) and Australia (3.3%).
The 10 Largest Issuers to "offshore" EUR money funds include: Credit Agricole with E20.6B (6.1%), BNP Paribas with E17.0B (5.1%), JP Morgan with E13.8B (4.1%), Societe Generale with E13.5B (4.0%), DZ Bank AG with E10.7B (3.2%), Sumitomo Mitsui Banking Corp with E10.0B (3.0%), Agence Central de Organismes de Securite Sociale with E9.8B (2.9%), BPCE SA with E8.7B (2.6%), ING Bank with E8.6B (2.6%) and Bank of Nova Scotia with E7.9B (2.3%).
The GBP funds tracked by MFI International contain, on average (as of 4/30/25): 38% in CDs, 18% in CP, 22% in Other (Time Deposits), 19% in Repo, 2% in Treasury and 1% in Agency. Sterling funds have on average 35.1% of their portfolios maturing Overnight, 10.7% maturing in 2-7 Days, 11.1% maturing in 8-30 Days, 8.5% maturing in 31-60 Days, 12.1% maturing in 61-90 Days, 13.0% maturing in 91-180 Days and 9.5% maturing beyond 181 Days. GBP MMF holdings are affiliated with the following countries: Japan (15.1%), France (14.5%), the U.K. (12.2%), Canada (12.1%), the U.S. (10.6%), Australia (10.3%), the Netherlands (4.2%), Germany (3.7%), Singapore (3.5%) and Abu Dhabi (2.4%).
The 10 Largest Issuers to "offshore" GBP money funds include: UK Treasury with L15.9B (6.3%), BNP Paribas with L12.8B (5.0%), Mizuho Corporate Bank Ltd with L11.2B (4.4%), RBC with L9.7B (3.8%), Sumitomo Mitsui Banking Corp with L9.6B (3.8%), JP Morgan with L8.9B (3.5%), Toronto-Dominion Bank with L8.5B (3.4%), National Australia Bank Ltd with L8.4B (3.3%), Commonwealth Bank of Australia with L8.0B (3.2%), and Mitsubishi UFJ Financial Group Inc with L7.6B (3.0%).
The May issue of our Bond Fund Intelligence, which was sent to subscribers Wednesday morning, features the stories, "Fidelity Says Shorter Is Better for Bond Funds; 88% of Return," which covers a recent white paper, and "ICI's 2025 Fact Book Reviews '24 Bond Fund Trends, Flows," which looks at the latest stats on the fund industry. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns inched higher in April while yields were also higher. 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.)
BFI's lead article states, "Fidelity recently published, 'The opportunity for short and intermediate bond funds.' They say, 'Many investors face a conundrum in 2025: Adding long-term bonds for diversification versus equities makes sense, but this could introduce unwanted volatility over the long term due to interest-rate risk. One way to potentially reduce this risk is by investing in short and intermediate investment-grade debt funds. Since 2012, these funds, on average, have generated 88% of the return of longer-term core bonds with 52% less volatility. Why? The comparatively shorter-term securities in which short and intermediate bond funds invest have shown less sensitivity to movements in interest rates and spreads over time.'"
It continues, "Michael Scarsciotti, head of the investment specialists at Fidelity Investments, comments, 'Short and intermediate bond funds might offer their most compelling storyline since 2008 -- a potential return advantage, relatively low volatility, and some of the highest starting yields in 17 years.'"
Our "Fact Book" article states, "ICI's new '2025 Investment Company Fact Book' contains a review of the bond fund marketplace in 2024 and a wealth of statistics on bond funds. They write, 'Net inflows into bond funds more than doubled in 2024 to $1.4 trillion <b:>`_… Investor expectations that central banks would soon begin lowering official interest rates likely drove this demand. `Monetary policy is important because when interest rates fall, bond prices rise and vice versa. As such, fixed-income investors stand to gain from a reduction in interest rates. Like the experience with equity fund returns and flows, net flows to bond funds have historically been related to bond returns. Additionally, in a falling rate environment, investors may move more assets into bond funds to 'lock in' higher yields.'"
It continues, "ICI's section on 'Bond Mutual Funds' (on page 49) explains, 'Bond mutual fund net new cash flows typically are correlated with the performance of US bonds, which, in turn, is largely driven by the US interest rate environment. In 2024, bond mutual funds faced significant interest rate volatility, as long-term interest rates fluctuated widely throughout the year. The yield on the 10-year Treasury started 2024 at 3.9 percent, increased to 4.7 percent in late April, and then retreated to as low as 3.6 percent in September before bouncing back to 4.6 percent at year-end. A variety of factors, including inflation uncertainty, an evolving economic outlook, and shifting expectations of monetary policies, contributed to these fluctuations.'"
Our first News brief, "Returns Inch Higher, Yields Up in April," says, "Bond fund returns were higher in April after falling in March. Our BFI Total Index rose 0.13% over 1-month and rose 6.30% over 12 months. (Money funds rose 4.75% over 1-year as measured by our Crane 100 Index.) The BFI 100 increased 0.36% in April and rose 7.49% over 12 mos. Our BFI Conservative Ultra-Short Index was up 0.25% over 1-month and 5.30% for 1-year; Ultra-Shorts rose 0.33% and 5.77%. Short-Term returned 0.56% and 7.18%, and Intm-Term rose 0.29% in April and 7.92% over 12 mos. BFI's Long-Term Index was flat (0.00%) and up 7.81%. High Yield returned -0.05% in April and 6.80% over 12 mos.
A second News brief, "MarketWatch Says 'Bond Funds Back in Demand.' They write, 'Strong investor demand for U.S. bond funds returned last week, in sharp contrast to outflows seen over the past month as investors grappled with uncertainty surrounding President Donald Trump's April 2 tariffs.'"
Our next News brief, "Bloomberg's 'Bond Mutual Funds See Biggest Outflows Since 2022 as ETFs Gain,' tells us, 'In April's tariff-driven market turbulence, investors yanked roughly $60 billion from fixed-income mutual funds, while bond ETFs overall weathered the storm.'"
A BFI sidebar, "IBD: BFs Outside US Up," tells us, "Investors.com writes, 'Even U.S. Bonds Are Falling Behind The Rest Of The World.' They state, 'It's not just U.S. stocks that are falling behind the rest of the world. America's bonds and bond ETFs are trailing, too. IShares Core U.S. Aggregate Bond (AGG), the giant bond ETF with more than $122 billion in assets, has only returned 1.55% this year, says Morningstar Direct. That ranks it just 105th out of the 400 actively traded bond ... ETFs tracked by Morningstar.'"
Finally, another sidebar, "MStar on Foreign Debt in BFs," says, "Morningstar writes that, 'Foreign Debt Spices Up Multisector Bond Funds.' It says, 'Investors don’t have to look too hard for income in the multisector bond Morningstar Category -- more than half the distinct strategies in this peer group tout 'income' in their names. In general, these funds deliver big yields. As of March 2025, the average multisector bond category fund yielded 5.4%. That compared favorably with figures from more-docile bond categories like intermediate core bond's 4.1% or even intermediate core-plus bond's 4.5%.'"
With money market fund assets continuing to hover near record levels (assets remain just above $7.3 trillion), our upcoming Money Fund Symposium seems destined to break well over 600 attendees. Money Fund Symposium 2025 is scheduled for June 23-25, 2025 at The Renaissance Boston Seaport, in Boston, Mass. The full agenda for the largest gathering of money market fund managers and cash investors in the world is available and registrations are still being taken. Money Fund Symposium attracts money fund managers, marketers and servicers, cash investors, money market securities dealers, issuers, and regulators. We review our latest agenda, as well as Crane Data's other 2025 conferences, below.
Our Money Fund Symposium Agenda kicks off on Monday, June 23 with a "Keynote: Money Market Funds, Bigger Than Ever" featuring Yie-Hsin Hung of State Street Global Advisors. The rest of the Day 1 Agenda includes: "Tokenized MMFs, Stablecoins & MM ETFs" with Teresa Ho of J.P. Morgan Securities, Adam Ackermann of Paxos and Bob Cousart of BlackRock; "Repo, Fed RRP & Treasury Clearing Issues," with Travis Keltner of State Street, Dina Marchioni of Federal Reserve Bank of NY and Nathaniel Wuerffel of BNY; and, a "Major Money Fund Issues 2025" panel with moderator Peter Crane of Crane Data, Laurie Brignac of Invesco, Kevin Gaffney of Fidelity Investments and Dan LaRocco of Northern Trust A.M.. The evening's reception is sponsored by State Street.
Day 2 of Money Fund Symposium 2025 begins with "Strategists Speak '25: Fed, Rates & More Repo," with Ian Lyngen of BMO Capital Markets, Mark Cabana of BofA Securities and Gennadiy Goldberg of TD Securities; followed by a "Senior Portfolio Manager Perspectives" panel featuring, Doris Grillo of J.P. Morgan Asset Mgmt, Frank Gutierrez of Dreyfus, and Nafis Smith of Vanguard. Next up is "Treasury & Government Money Fund Issues," with Tom Katzenbach of US Dept of Treasury and Geoff Gibbs of DWS. The morning concludes with a "Muni & Tax Exempt Money Fund Update," featuring Cameron Ullyatt of Charles Schwab Inv. Mgmt., John Vetter of Fidelity Investments and David Elmquist of J.P. Morgan Securities.
The Afternoon of Day 2 (after a Dreyfus-sponsored lunch) features the segments: "Dealer's Choice: Supply, New Securities & CP" moderated by Rob Sabatino of UBS A.M. with Rob Crowe of Citi Global Markets, Stewart Cutler of Barclays and John Kodweis of J.P. Morgan Securities; "Local Government Investment Pool Briefing" with Laura Glenn of RBC, Marty Margolis of Public Funds Investment Institute and Jeffrey Rowe of PFM Asset Management; "Deposits, Brokerage Sweeps & Retail Cash," with Michael Berkowitz of Citi Treasury & Trade Solutions and Chris Melin of Ameriprise Financial. The day's wrap-up presentation is a "Investors, Portals & Distribution Topics" involving Greg Fortuna of State Street and Vanessa McMichael of Wells Fargo Securities. (The Day 2 reception is sponsored by Barclays.)
The third day of the Symposium features the sessions: "Regulations: Money Fund Reforms, Aftermath," with Brenden Carroll of Dechert LLP, Jon-Luc Dupuy of K&L Gates LLP and Jamie Gershkow of Stradley Ronon; "Ratings Agency Outlook & Trend Review," which features Robert Callagy of Moody's Ratings, Peter Gargiulo of Fitch Ratings and Michael Masih of S&P Global Ratings; "State of the Money Market Fund Industry" with Peter Crane of Crane Data and Pia McCusker of State Street Global Advisors; and, "Money Fund Wisdom Demo & Training" with Peter Crane of Crane Data.
We'd like to thank our sponsors and exhibitors so far -- Barclays, BMO, BNY, Dreyfus, Federated Hermes, Fidelity, J.P. Morgan Securities, Nearwater Capital, State Street, TD Securities, First American Funds, Invesco, Moody's Ratings, Drexel Hamilton, Credit Agricole CIB, Daiwa, J.P. Morgan Asset Management, Mizuho, Nomura, Bank of America, RBC Capital Markets, Fitch Ratings, Deutsche Bank, Allspring, Siebert Williams, Citi, Natixis, BlackRock, Mayer & Brown, Charles Schwab Investment Management, Northern Trust A.M., IntraFi, Tradeweb, Toyota, Morgan Stanley, UBS, S&P Global Ratings, Seelaus, Mischler, Lummis, ICD, Stradley Ronon, Cantor and Buckler Securities -- for their support. E-mail us for more details.
Visit the Money Fund Symposium website at www.moneyfundsymposium.com for more information. Registration is $1,000. (Note: Our room block is SOLD OUT on Tuesday night, but Sunday and Monday might still available. We're seeking more rooms, but you may have to look for nearby hotels. These include: the Seaport Hotel Boston, Omni Boston Hotel at the Seaport and The Westin Boston Seaport District.) We hope you'll join us in Boston in June! E-mail us at info@cranedata.com to request the full brochure.)
We're also making plans for our next European Money Fund Symposium, which is scheduled for Sept. 25-26, 2025, in Dublin, Ireland. (Note too: We may shift the dates of this event to Sept. 22-23 to avoid sold-out hotels the weekend of Sept. 26-28 due to the Steelers game in Dublin. Stay tuned!) Our 2024 event in London attracted a record 210 attendees, so we expect our 2025 event to once again be the biggest money market event in Europe. The agenda has been posted and registration ($1000 to attend) is now live. European Money Fund Symposium offers "offshore" money fund portfolio managers, and money market investors, issuers, dealers and service providers a concentrated and affordable educational experience, as well as an excellent and informal networking venue.
Finally, mark your calendars for our next Money Fund University "basic training" event, scheduled for Dec. 18-19, 2025, in Pittsburgh, Pa. Let us know if you'd like more details on any of our events, and we hope to see you in Newport Beach this month, in Boston in June, in Dublin in September or in Pittsburgh in December!
Crane Data's May Money Fund Portfolio Holdings, with data as of April 30, 2025, show that holdings of Repo jumped last month while Treasuries declined. Money market securities held by Taxable U.S. money funds (tracked by Crane Data) decreased by $73.8 billion to $7.199 trillion in April, after increasing $45.6 billion in March, $53.7 billion in February, $84.1 billion in January, and $88.0 billion in December. They rose by $190.8 billion in November, $82.8 billion in October and $233.8 billion in September. Repo, now the largest segment, increased $31.4 billion in April. Treasuries, now the second largest portfolio composition segment, decreased by $168.3 billion. Agencies were the third largest segment, CP remained fourth, ahead of CDs, Other/Time Deposits and VRDNs. Below, we review our Money Fund Portfolio Holdings statistics. (Visit our Content center to download, or contact us to request our latest Portfolio Holdings reports.)
Among taxable money funds, Repurchase Agreements (repo) increased $31.4 billion (1.1%) to $2.842 trillion, or 39.5% of holdings, in April, after increasing $92.7 billion in March, $173.9 billion in February, decreasing $67.8 billion in January and increasing $211.3 billion in December. Treasury securities decreased $168.3 billion (-5.9%) to $2.708 trillion, or 37.6% of holdings, after decreasing 83.3 billion in March, $118.3 billion in February, increasing $92.1 billion in January and decreasing $69.5 billion in December. Government Agency Debt was up $75.1 billion, or 8.4%, to $971.7 billion, or 13.5% of holdings. Agencies increased $16.1 billion in March, decreased $6.5 billion in February, increased $7.1 billion in January and increased $33.0 billion in December. Repo, Treasuries and Agency holdings now total $6.522 trillion, representing a massive 90.6% of all taxable holdings.
Money fund holdings of Other (Time Deposits) and CP fell in April, while CDs rose. Commercial Paper (CP) decreased $9.6 billion (-3.1%) to $302.8 billion, or 4.2% of holdings. CP holdings increased $7.6 billion in March, $4.4 billion in February and $11.4 billion in January, but decreased $7.3 billion in December. Certificates of Deposit (CDs) increased $4.0 billion (2.1%) to $198.5 billion, or 2.8% of taxable assets. CDs increased $4.1 billion in March, decreased $5.0 billion in February, increased $2.8 billion in January and increased $4.9 billion in December. Other holdings, primarily Time Deposits, decreased $6.6 billion (-3.9%) to $160.6 billion, or 2.2% of holdings, after increasing $8.2 billion in March, $5.0 billion in February and $38.9 billion in January, but decreasing $84.6 billion in December. VRDNs increased to $14.9 billion, or 0.2% of assets. (Note: This total is VRDNs for taxable funds only. We will post our Tax Exempt MMF holdings separately Monday around noon.)
Prime money fund assets tracked by Crane Data increased to $1.243 trillion, or 17.3% of taxable money funds' $7.199 trillion total. Among Prime money funds, CDs represent 16.0% (up from 15.7% a month ago), while Commercial Paper accounted for 24.4% (down from 25.2% a month ago). The CP totals are comprised of: Financial Company CP, which makes up 14.9% of total holdings, Asset-Backed CP, which accounts for 7.3%, and Non-Financial Company CP, which makes up 2.2%. Prime funds also hold 0.5% in US Govt Agency Debt, 6.0% in US Treasury Debt, 22.8% in US Treasury Repo, 1.0% in Other Instruments, 9.4% in Non-Negotiable Time Deposits, 7.6% in Other Repo, 11.1% in US Government Agency Repo and 0.9% in VRDNs.
Government money fund portfolios totaled $3.913 trillion (54.4% of all MMF assets), down from $3.944 trillion in March, while Treasury money fund assets totaled another $2.042 trillion (28.4%), down from $2.091 trillion the prior month. Government money fund portfolios were made up of 24.7% US Govt Agency Debt, 18.6% US Government Agency Repo, 29.2% US Treasury Debt, 26.8% in US Treasury Repo, 0.6% in Other Instruments. Treasury money funds were comprised of 73.0% US Treasury Debt and 26.9% in US Treasury Repo. Government and Treasury funds combined now total $5.955 trillion, or 82.7% of all taxable money fund assets.
European-affiliated holdings (including repo) increased by $86.2 billion in April to $779.4 billion; their share of holdings rose to 10.8% from last month's 9.5%. Eurozone-affiliated holdings increased to $531.4 billion from last month's $493.3 billion; they account for 7.4% of overall taxable money fund holdings. Asia & Pacific related holdings fell to $306.5 billion (4.3% of the total) from last month's $307.7 billion. Americas related holdings fell to $6.103 trillion from last month's $6.262 trillion; they now represent 84.8% of holdings.
The overall taxable fund Repo totals were made up of: US Treasury Repurchase Agreements (up $19.4 billion, or 1.0%, to $1.882 trillion, or 26.1% of assets); US Government Agency Repurchase Agreements (up $13.8 billion, or 1.6%, to $865.3 billion, or 12.0% of total holdings), and Other Repurchase Agreements (down $1.8 billion, or -1.9%, from last month to $95.6 billion, or 1.3% of holdings). The Commercial Paper totals were comprised of Financial Company Commercial Paper (down $15.7 billion to $185.0 billion, or 2.6% of assets), Asset Backed Commercial Paper (up $2.5 billion at $90.8 billion, or 1.3%), and Non-Financial Company Commercial Paper (up $3.6 billion to $27.0 billion, or 0.4%).
The 20 largest Issuers to taxable money market funds as of April 30, 2025, include: the US Treasury ($2.708T, 37.6%), Fixed Income Clearing Corp ($1.002T, 13.9%), Federal Home Loan Bank ($732.2B, 10.2%), JP Morgan ($280.2B, 3.9%), the Federal Reserve Bank of New York ($214.4B, or 3.0%), Citi ($181.5B, 2.5%), Federal Farm Credit Bank ($167.6B, 2.3%), BNP Paribas ($164.0B, 2.3%), RBC ($146.8B, 2.0%), Bank of America ($138.3B, 1.9%), Barclays ($109.2B, 1.5%), Wells Fargo ($85.8B, 1.2%), Goldman Sachs ($81.6B, 1.1%), Mitsubishi UFJ Financial Group ($75.0B, 1.0%), Sumitomo Mitsui Banking Corp ($73.3B, 1.0%), Credit Agricole ($72.2B, 1.0%), Canadian Imperial Bank of Commerce ($59.6B, 0.8%), Societe Generale ($53.8B, 0.7%), Toronto-Dominion Bank ($48.3B, 0.7%) and Bank of Montreal ($46.5B, 0.6%).
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 ($978.3B, 34.4%), JP Morgan ($267.6B, 9.4%), the Federal Reserve Bank of New York ($214.4B, 7.5%), Citi ($166.9B, 5.9%), BNP Paribas ($151.4B, 5.3%), Bank of America ($114.6B, 4.0%), RBC ($107.4B, 3.8%), Barclays ($92.5B, 3.3%), Wells Fargo ($85.7B, 3.0%), and Goldman Sachs ($81.2B, 2.9%).
The largest users of the $214.4 billion in Fed RRP include: Fidelity Cash Central Fund ($46.6B), Vanguard Federal Money Mkt Fund ($24.8B), Fidelity Sec Lending Cash Central Fund ($23.7B), Fidelity Inv MM: Treas Port ($13.5B), Schwab Treasury Oblig MF ($13.2B), American Funds Central Cash ($8.3B), Fidelity Money Market ($7.9B), Vanguard Cash Reserves Federal MM ($7.8B), Fidelity Treasury Fund ($7.7B) and Goldman Sachs FS Treas Sol ($7.7B).
The 10 largest issuers of "credit" -- CDs, CP and Other securities (including Time Deposits and Notes) combined -- include: RBC ($39.4B, 6.6%), Toronto-Dominion Bank ($29.7B, 4.9%), Mitsubishi UFJ Financial Group Inc ($27.3B, 4.5%), ING Bank ($24.4B, 4.1%), Bank of America ($23.7B, 3.9%), Australia & New Zealand Banking Group Ltd ($23.7B, 3.9%), Fixed Income Clearing Corp ($23.3B, 3.9%), Mizuho Corporate Bank Ltd ($22.0B, 3.7%), Canadian Imperial Bank of Commerce ($21.1B, 3.5%) and Skandinaviska Enskilda Banken AB ($19.7B, 3.3%).
The 10 largest CD issuers include: Mitsubishi UFJ Financial Group Inc ($19.4B, 9.8%), Bank of America ($15.8B, 8.0%), Sumitomo Mitsui Banking Corp ($13.8B, 7.0%), Credit Agricole ($13.7B, 6.9%), Mizuho Corporate Bank Ltd ($13.2B, 6.6%), Sumitomo Mitsui Trust Bank ($12.2B, 6.2%), Toronto-Dominion Bank ($11.5B, 5.8%), Canadian Imperial Bank of Commerce ($10.3B, 5.2%), Mitsubishi UFJ Trust and Banking Corporation ($9.1B, 4.6%) and Citi ($6.2B, 3.1%).
The 10 largest CP issuers (we include affiliated ABCP programs) include: RBC ($23.7B, 8.5%), Toronto-Dominion Bank ($17.7B, 6.4%), Bank of Montreal ($13.4B, 4.8%), JP Morgan ($12.6B, 4.5%), Barclays PLC ($12.1B, 4.3%), Australia & New Zealand Banking Group Ltd ($9.8B, 3.5%), Landesbank Baden-Wurttemberg ($8.6B, 3.1%), Citi ($8.3B, 3.0%), Bank of Nova Scotia ($8.3B, 3.0%) and BPCE SA ($8.2B, 2.9%).
The largest increases among Issuers include: Fixed Income Clearing Corp (up $76.9B to $1.002T), Federal Home Loan Bank (up $71.2B to $732.2B), Barclays PLC (up $40.3B to $109.2B), Bank of America (up $31.4B to $138.3B), Citi (up $30.2B to $181.5B), JP Morgan (up $25.3B to $280.2B), Credit Agricole (up $15.7B to $72.2B), Erste Group Bank AG (up $10.9B to $12.4B), Societe Generale (up $10.1B to $53.8B) and Standard Chartered Bank (up $6.4B to $21.9B).
The largest decreases among Issuers of money market securities (including Repo) in April were shown by: US Treasury (down $168.3B to $2.708T), the Federal Reserve Bank of New York (down $134.3B to $214.4B), RBC (down $60.5B to $146.8B), Goldman Sachs (down $18.9B to $81.6B), Wells Fargo (down $8.0B to $85.8B), Canadian Imperial Bank of Commerce (down $6.7B to $59.6B), Sumitomo Mitsui Banking Corp (down $6.5B to $73.3B), Mizuho Corporate Bank Ltd (down $5.4B to $36.6B), DNB ASA (down $3.7B to $11.6B) and Bank of Montreal (down $2.7B to $46.5B).
The United States remained the largest segment of country-affiliations; it represents 80.0% of holdings, or $5.761 trillion. Canada (4.8%, $341.6B) was in second place, while France (4.6%, $333.7B) was No. 3. Japan (3.9%, $279.2B) occupied fourth place. The United Kingdom (2.7%, $191.5B) remained in fifth place. Australia (0.8%, $56.4B) was in sixth place, followed by Netherlands (0.7%, $53.1B), Germany (0.7%, $49.5B), Sweden (0.5%, $36.4B), and Spain (0.5%, $34.5B). (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 April 30, 2025, Taxable money funds held 52.5% (up from 51.6%) of their assets in securities maturing Overnight, and another 9.6% maturing in 2-7 days (up from 8.9%). Thus, 62.1% in total matures in 1-7 days. Another 11.6% matures in 8-30 days, while 8.9% matures in 31-60 days. Note that over three-quarters, or 82.6% 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 5.4% of taxable securities, while 7.4% matures in 91-180 days, and just 4.6% matures beyond 181 days.
Crane Data's latest monthly Money Fund Portfolio Holdings statistics will be sent out Friday, and we'll be writing our regular monthly update on the new May data for Monday'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 Thursday. (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 April 30, includes holdings information from 992 money funds (up 5 from last month), representing assets of $7.367 trillion (down from a record high of $7.433 trillion a month ago). Prime MMFs rose to $1.137 trillion (up from $1.133 trillion), or 15.4% of the total. We review the new N-MFP data, and we also look at our revised MMF expense data, which shows charged expenses were mostly flat and money fund revenues fell to $19.6 billion (annualized) in April.
Our latest Form N-MFP Summary for All Funds (taxable and tax-exempt) shows Treasuries and Repurchase Agreements (Repo) remain the largest types of portfolio holdings in money market funds. Treasury holdings in money market funds now total $2.714 trillion (down from $2.880 trillion), or 36.8% of all assets, while Repo holdings rose to $2.849 trillion (up from $2.820 billion), or 38.7% of all holdings. Government Agency securities total $978.9 billion (up from $902.1 billion), or 13.3%. Holdings of Treasuries, Government agencies and Repo (almost all of which is backed by Treasuries and agencies) combined total $6.542 trillion, or a massive 88.8% of all holdings.
The Other category (primarily Time Deposits) totals $170.0 billion (down from $175.6 billion), or 2.3%, and Commercial paper (CP) totals $313.2 billion (down from $322.6 billion), or 4.3% of all holdings. Certificates of Deposit (CDs) total $198.4 billion (up from $194.3 billion), 2.7%, and VRDNs account for $142.9 billion (up from $138.3 billion), or 1.9% of money fund securities.
Broken out into the SEC's more detailed categories, the CP totals were comprised of: $184.7 billion, or 2.5%, in Financial Company Commercial Paper; $91.1 billion or 1.2%, in Asset Backed Commercial Paper; and, $37.4 billion, or 0.5%, in Non-Financial Company Commercial Paper. The Repo totals were made up of: U.S. Treasury Repo ($1.903 trillion, or 25.8%), U.S. Govt Agency Repo ($847.9B, or 11.5%) and Other Repo ($98.8B, or 1.3%).
The N-MFP Holdings summary for the Prime Money Market Funds shows: CP holdings of $272.3 billion (down from $281.2 billion), or 24.0%; Repo holdings of $486.0 billion (up from $476.6 billion), or 42.8%; Treasury holdings of $73.6 billion (up from $61.5 billion), or 6.5%; CD holdings of $172.1 billion (up from $170.0 billion), or 15.1%; Other (primarily Time Deposits) holdings of $116.3 billion (down from $127.7 billion), or 10.2%; Government Agency holdings of $5.8 billion (up from $4.9 billion), or 0.5% and VRDN holdings of $10.7 billion (up from $10.6 billion), or 0.9%.
The SEC's more detailed categories show CP in Prime MMFs made up of: $166.5 billion (down from $181.6 billion), or 14.6%, in Financial Company Commercial Paper; $80.5 billion (up from $78.3 billion), or 7.1%, in Asset Backed Commercial Paper; and $25.4 billion (up from $21.2 billion), or 2.2%, in Non-Financial Company Commercial Paper. The Repo totals include: U.S. Treasury Repo ($267.1 billion, or 23.5%), U.S. Govt Agency Repo ($134.7 billion, or 11.8%), and Other Repo ($84.3 billion, or 7.4%).
In related news, money fund charged expense ratios (Exp%) were mostly flat in April. Our Crane 100 Money Fund Index and Crane Money Fund Average were 0.27% and 0.37%, respectively, as of April 30, 2025. 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 Thursday 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.) 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 0.27%, unchanged from last month's level (also 19 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 0.37% as of April 30, 2025, unchanged from the month prior and slightly below the 0.40% at year-end 2019.
Prime Inst MFs expense ratios (annualized) average 0.23% (unchanged from last month), Government Inst MFs expenses average 0.26% (up 1 bp 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 0.49% (unchanged from last month). Tax-exempt expenses were unchanged at 0.40% on average.
Gross 7-day yields were slightly lower during the month ended April 30, 2025. The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 728), shows a 7-day gross yield of 4.39%, down 2 bps from the prior month. The Crane Money Fund Average was 1.72% at the end of 2019, 0.15% at the end of 2020 and 0.09% at the end of 2021. Our Crane 100's 7-day gross yield was also down 1 bp, ending the month at 4.40%.
According to our revised MFI XLS and Crane Index numbers, we now estimate that annualized revenue for all money funds is $19.551 billion (as of 4/30/25). Our estimated annualized revenue totals decreased from $19.659B last month and also lower than the record high, $19.723B seen two months ago. Revenue levels are more than six 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 mostly lower among most of the largest U.S. money fund complexes in April after a relatively flat March. Assets increased in February, January, December, November, October, September, August, July, June and May. Assets also fell last April and March. Money market fund assets fell by $26.3 billion, or -0.4%, last month to $7.306 trillion. Total MMF assets have increased by $73.9 billion, or 1.0%, over the past 3 months, and they've increased by $920.5 billion, or 14.4%, over the past 12 months. The largest increases among the 25 largest managers last month were seen by American Funds, BlackRock, Vanguard, HSBC and Dreyfus, which grew assets by $25.6 billion, $7.8B, $4.5B, $3.9B and $3.2B, respectively. Declines in April were seen by Goldman Sachs, JPMorgan, Federated Hermes, Morgan Stanley and Fidelity, which decreased by $13.7 billion, $13.0B, $12.1B, $11.3B and $11.0B, respectively. Our domestic U.S. "Family" rankings are available in our MFI XLS product, our global rankings are available in our MFI International product. The combined "Family & Global Rankings" are available to Money Fund Wisdom subscribers. We review the latest market share totals, and look at money fund yields, which were flat to slightly lower in April.
Over the past year through April 30, 2025, Fidelity (up $211.9B, or 16.3%), Schwab (up $122.1B, or 23.7%), JPMorgan (up $113.7B, or 17.5%), BlackRock (up $107.9B, or 21.2%) and Vanguard (up $88.2B, or 14.9%) were the `largest gainers. American Funds, Fidelity, Vanguard, Schwab, and BlackRock had the largest asset increases over the past 3 months, rising by $37.1B, $35.3B, $32.5B, $26.9B and $20.0B, respectively. The largest declines over 12 months were seen by: RBC (down $3.7B), DWS (down $1.9B), PGIM (down $1.9B) and Columbia (down $1.7B). The largest declines over 3 months included: JPMorgan (down $21.9B), Goldman Sachs (down $15.8B) and Morgan Stanley (down $12.2B).
Our latest domestic U.S. Money Fund Family Rankings show that Fidelity Investments remains the largest money fund manager with $1.516 trillion, or 20.7% of all assets. Fidelity was down $11.0B in April, up $35.3 billion over 3 mos., and up $211.9B over 12 months. JPMorgan ranked second with $762.0 billion, or 10.4% market share (down $13.0B, down $21.9B and up $113.7B for the past 1-month, 3-mos. and 12-mos., respectively). Vanguard ranked in third place with $680.4 billion, or 9.3% of assets (up $4.5B, up $32.5B and up $88.2B). Schwab ranked fourth with $637.4 billion, or 8.7% market share (down $4.1B, up $26.9B and up $122.1B), while BlackRock was the fifth largest MMF manager with $617.9 billion, or 8.5% of assets (up $7.8B, up $20.0B and up $107.9B for the past 1-month, 3-mos. and 12-mos.).
Federated Hermes was in sixth place with $471.6 billion, or 6.5% (down $12.1B, down $11.8B and up $24.5B), while Goldman Sachs was in seventh place with $432.4 billion, or 5.9% of assets (down $13.7B, down $15.8B and up $49.9B). Dreyfus ($291.7B, or 4.0%) was in eighth place (up $3.2B, down $8.1B and up $14.9B), followed by Morgan Stanley ($282.7B, or 3.9%; down $11.3B, down $12.2B and up $40.8B). SSGA was in 10th place ($242.4B, or 3.3%; up $1.5B, down $11.0B and up $32.1B).
The 11th through 20th-largest U.S. money fund managers (in order) include: Allspring ($210.7B, or 2.9%), Northern ($177.6B, or 2.4%), American Funds ($175.6B, or 2.4%), First American ($166.0B, or 2.3%), Invesco ($161.2B, or 2.2%), UBS ($111.3B, or 1.5%), T. Rowe Price ($51.4B, or 0.7%), HSBC ($47.8B, or 0.7%), DWS ($39.9B, or 0.5%) and Western ($33.4B, or 0.5%). Crane Data currently tracks 61 U.S. MMF managers, unchanged from last month.
When European and "offshore" money fund assets -- those domiciled in places like Ireland, Luxembourg and the Cayman Islands -- are included, the top 10 managers are the same as the domestic list, except: BlackRock moves up to the No. 3 spot, Vanguard moves down to No. 4 and Schwab moves down to the No. 5 spot. Goldman Sachs moves up to the No. 6 spot, while Federated Hermes moves down to the No. 7 spot and Dreyfus moves up to the No. 8 spot, while Morgan Stanley moves down to the No. 9 spot. 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 ($1.535 trillion), JP Morgan ($1.044 trillion), BlackRock ($951.1B), Vanguard ($680.4B) and Schwab ($637.4B). Goldman Sachs ($589.9B) was in sixth, Federated Hermes ($482.5B) was seventh, followed by Morgan Stanley ($388.3B), Dreyfus/BNY ($318.4B) and SSGA ($293.3B), 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 May issue of our Money Fund Intelligence and MFI XLS, with data as of 4/30/25, shows that yields were lower in April across all the Crane Money Fund Indexes. The Crane Money Fund Average, which includes all taxable funds covered by Crane Data (currently 728), was 4.02% (down 2 bps) for the 7-Day Yield (annualized, net) Average, the 30-Day Yield was down 1 bp to 4.03%. The MFA's Gross 7-Day Yield was at 4.39% (down 1 bps), and the Gross 30-Day Yield was down 1 bp at 4.40%. (Gross yields will be revised once we download the SEC's Form N-MFP data for 4/30/25 on Thursday.)
Our Crane 100 Money Fund Index shows an average 7-Day (Net) Yield of 4.13% (down 2 bps) and an average 30-Day Yield at 4.14% (unchanged). The Crane 100 shows a Gross 7-Day Yield of 4.40% (down 1 bp), and a Gross 30-Day Yield of 4.40% (down 1 bp). Our Prime Institutional MF Index (7-day) yielded 4.26% (down 2 bps) as of April 30. The Crane Govt Inst Index was at 4.13% (down 2 bps) and the Treasury Inst Index was at 4.08% (down 1 bp). Thus, the spread between Prime funds and Treasury funds is 18 basis points, and the spread between Prime funds and Govt funds is 13 basis points. The Crane Prime Retail Index yielded 4.00% (down 2 bps), while the Govt Retail Index was 3.84% (down 2 bps), the Treasury Retail Index was 3.84% (down 1 bp from the month prior). The Crane Tax Exempt MF Index yielded 2.97% (up 29 bps) at the end of April.
Gross 7-Day Yields for these indexes to end April were: Prime Inst 4.49% (down 2 bps), Govt Inst 4.38% (down 2 bps), Treasury Inst 4.36% (down 1 bp), Prime Retail 4.49% (down 2 bps), Govt Retail 4.38% (down 1 bp) and Treasury Retail 4.36% (down 1 bp). The Crane Tax Exempt Index rose to 3.37% (up 30 bps). The Crane 100 MF Index returned on average 0.34% over 1-month, 1.02% over 3-months, 1.30% YTD, 4.75% over the past 1-year, 4.23% over 3-years annualized), 2.54% over 5-years, and 1.76% over 10-years.
The total number of funds, including taxable and tax-exempt, was unchanged in April at 841. There are currently 728 taxable funds, unchanged from the previous month, and 113 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 May issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Wednesday morning, features the articles: "Money Funds Shift Away from Treasuries; Stablecoins Step In," which discusses recent portfolio composition shifts in the MMF space; "ICI 2025 Fact Book Shows Money Fund Trends in '24," which looks at ICI's latest stats on the fund industry; and, "Charles Schwab Q1 Earnings Discuss Sweeps, Higher Cash" which reviews Schwab's Q1 earnings. We also sent out our MFI XLS spreadsheet Wednesday a.m., and we've updated our Money Fund Wisdom database with 4/30/25 data. Our May Money Fund Portfolio Holdings are scheduled to ship on Friday, May 9, and our May Bond Fund Intelligence is scheduled to go out on Wednesday, May 14.
MFI's "Money Funds Shift" article says, "Fidelity Investments published a rare Money Market Monthly Commentary titled, 'Inflated Uncertainties.' It states, 'In addition to the uncertain interest rate path, our funds are also experiencing a decline in money market eligible supply as the Treasury navigates the constraints on their issuance program as a result of having reached the debt ceiling earlier this year. Treasury Bills declined by $212 billion during the month of March to a total outstanding amount of $6.155 trillion. Going forward we anticipate further declines of Treasury Bill supply until a resolution is reached on the debt ceiling.'"
It continues, "A recent J.P. Morgan 'JPM Mid-Week US Short Duration Update' includes a 'March holdings update: MMFs lean on ON RRP.' It says, 'Last month, MMFs navigated through an environment where demand exceeded supply, with flows into MMFs totaling $41bn and net T-bill issuance falling by over $200bn in response to Treasury hitting the debt ceiling. As a result, both government and prime funds reduced their T-bill holdings by $155bn collectively, bringing total allocations to approximately $2.2tn, and redirected the cash primarily to the Fed's ON RRP. Combining that with the typical quarter-end technical factors amid counterparty constraints between dealers and MMFs, balances at the ON RRP among MMFs increased by $147bn month-over-month to $347bn. MMFs continue to be the largest participant at the ON RRP facility, comprising 87% of usage.'"
We write in our ICI Fact Book article, "The Investment Company Institute released its '2025 Investment Company Fact Book,' 'A Review of Trends and Activities in the Investment Company Industry.' The latest edition tells us, 'With stock markets rising across the globe in 2024 (24% in the United States and 10% in the Asia-Pacific region) worldwide total net assets of equity funds, which invest primarily in publicly traded stocks, increased by 12% to $35.7 trillion at year-end 2024. Bond funds -- which invest primarily in fixed-income securities -- saw their total net assets increase 7% over the same period, somewhat reflecting total returns (capital gains and interest income) on bonds in Europe and the Asia-Pacific region of 3% and 7%, respectively. Net assets of money market funds, which are regulated funds restricted to holding short-term, high-quality debt instruments, also increased substantially."
It states, "Discussing 'Worldwide' mutual funds (page 18), ICI writes, 'Worldwide net sales of money market funds remained robust in 2024, totaling $1.5 trillion, unchanged from 2023.... Investors across all geographical regions continued to demonstrate demand for money market funds, with the United States accounting for more than half of total net inflows. Investor demand for money market funds in the United States and Europe was $920 billion and $239 billion in 2024, respectively. Additionally, in the Asia-Pacific region, money market funds experienced net inflows of $336 billion in 2024.'"
Our "Schwab" piece says, "Charles Schwab reported Q1'25 earnings and hosted its '2025 Spring Business Update' recently. CFO Mike Verdeschi tells us, 'Transactional cash levels continue to reflect normalized cash behaviors inclusive of organic growth, seasonality and investor sentiment. And we made additional progress on reducing the level of bank supplemental funding to approximately $38 billion, down more than 60% from peak levels.'"
The article continues, "He explains, 'In terms of rates, the outlook for 2025 remains dynamic with the forward curve moving between three to four 25 basis point cuts to the Fed’s target rate versus the one cut assumed back in January for our financial scenario.'"
MFI also includes the News brief, "Assets Decline in April on Taxes." It says, "ICI's 'Money Market Mutual Fund Assets' show assets falling $4.1 billion to $6.908 trillion in the week ended April 30. MMF assets are up by $907 billion, or 15.1%, the past 52 weeks (through 4/30/25), with Inst MMFs up $470 billion, or 13.1% and Retail MMFs up $437B, or 18.1%. Our MFI XLS shows assets down $26.6 billion in April to $7.307 trillion.
Another News brief, "Ramirez Liquidates Money Fund; Schwab Changes Value Advantage to Prime Advantage Money Fund," tells readers, "A filing for Ramirez Government Money Market Fund (Retail Class, RMZXX and Institutional Class, RAMXX), states, 'The Board ... upon a recommendation from Ramirez Asset Management ... has determined to close and liquidate the Fund immediately after the close of business on April 29, 2025. This decision was made due to the Fund's inability to obtain a level of assets necessary for it to be viable."
A third News brief says, "The WSJ Claims 'Your Money-Market Fund Is Ripping You Off." They write, "Cash is king. If only you didn't have to pay a king's ransom to hold it.... Money-market mutual funds -- the most convenient form of cash for most investors -- have stayed stable while providing steady income that has cushioned the damage in other markets. Yet money-market funds are surprisingly expensive, and a recent attempt to make them cheaper has been stymied."
A sidebar, "Federated Q1 Earnings," says, "Federated Hermes reported Q1'25 earnings and hosted its Q1'25 earnings call late last month. On the call, President & CEO J. Christopher Donahue, comments, 'We ended Q1 with record assets under management of $840 billion, driven by record money market assets of $637 billion.... We reached another record-high for money market assets at the end-of-the quarter, $465 billion and total money market assets of $637 billion. Total money market assets increased by about $7 billion in the first quarter as money funds added $3.2 billion and money market separate accounts added $3.6 billion.'"
Our May MFI XLS, with April 30 data, shows total assets fell $26.6 billion to $7.307 trillion, after decreasing $4.6 billion in March, but increasing $90.4 billion in February, $47.9 billion in January, and $113.0 billion in December. Assets jumped $196.1 billion in November, $89.9 billion in October, $155.2 billion in September, $105.6 billion in August, $19.7 billion in July $11.8 billion in June and $79.7 billion last May.
Our broad Crane Money Fund Average 7-Day Yield was down 2 bps to 4.02%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 2 bps to 4.13% in April. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 averaged 4.39% and 4.40%. Charged Expenses averaged 0.37% and 0.27% for the Crane MFA and the Crane 100. (We'll revise expenses once we upload the SEC's Form N-MFP data for 4/30/25 on Thursday, 5/8.) The average WAM (weighted average maturity) for the Crane MFA was 34 days (unchanged) and the Crane 100 WAM was down 2 day from the previous month at 34 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
Recent "Minutes of the Meeting of the Treasury Borrowing Advisory Committee April 29, 2025" comment on stablecoins and money market funds," saying, "With the growth of the cryptocurrency and digital asset economy has come the expansion of the 'stablecoin' market in the United States and abroad. As this asset class continues to grow, the distinctions between money funds and payment stablecoins has continued to converge. Some stablecoins are moving towards paying interest, money market funds are exploring tokenization, and Congress is considering explicitly defining what constitutes a collateralized dollar-backed payment stablecoin. Please articulate the terminal effects of interest-bearing stablecoins from a perspective of Treasury demand, USD hegemony, the expansion of dollar-backed payment stablecoins, and potential effects for insured depository institutions. Further, do tokenized money funds present a risk should they be allowed to compete with other payment or settlement instruments?"
A press release titled, "Report to the Secretary of the Treasury from the Treasury Borrowing Advisory Committee <i:https://home.treasury.gov/news/press-releases/sb0121>," tells us, "`The second charge focused on stablecoins and their intersection with the US Treasury market. The current market cap of stablecoins is around $234bn, with roughly half of that currently reported as invested in T-bills, with another $90bn in money market funds. The Committee noted that evolving market dynamics and proposed legislation have caused some estimates of the growth trajectory of stablecoins to reach ~$2tn in market cap by 2028."
It says, "The Committee discussed the potential impact to US Treasury demand. Legislation design is likely to determine both scale of growth in the industry and sources of inflows (e.g., unbanked users, reallocations from money market funds, or reallocations from bank deposits). Growth in stablecoins from unbanked market segments would be positive for T-bill demand, while growth at the expense of money market funds would likely be neutral. Committee members worry that growth at the expense of bank deposits could impact credit creation and the existing demand profile for US Treasury securities from the banking sector."
Treasury adds, "Additionally, the question of interest-bearing stablecoins warrants careful consideration. Current draft legislation precludes stablecoins from paying interest. The Committee expressed concerns about interest-bearing stablecoins and felt that further study was warranted, as was further regulatory environment design."
In other news, Federated Hermes Deborah Cunningham says, "Let Powell drive the bus" in her latest commentary. She comments, "No one likes backseat drivers, but if they lunge for the steering wheel, you can't ignore them. That's the position that President Trump has repeatedly put Federal Reserve Chair Jerome Powell in when he attacks him for refusing to cut interest rates. Presidents occasionally chirp about Fed policy, but Trump's tweets go well beyond that."
Cunningham writes, "Perhaps because cash managers deal in securities that don't know the meaning of VIX, we do our best to ignore Trump. And maybe everyone should. But the problem is not that administration lawyers might find a legal loophole to remove Powell, usurp Fed independence with a 'shadow chair' or do something more drastic. Those alternatives would take the sort of energy, expertise and political equity the administration might not have for something most voters don't prioritize. It's that Powell's term as chair is set to expire in May 2026, which means he will essentially be a lame duck in a few quarters, and Trump's assault could accelerate that timeline when we need strong leadership."
She continues, "And though Trump might want to hand-pick his successor, the nominee must come from the group of standing Fed governors. That could mean the new chair might not hold wildly different opinions, as Powell has shown a commanding influence on the Fed board and FOMC over the years. He's been challenged more in the last few quarters, with some dissention, but it seems they largely support his view of economics."
The piece states, "So, cue the debate that likely will ensue at the FOMC meeting next week. It would not be surprising if Powell and most of the voting members push back against the fed funds futures call for as many as four quarter-point cuts over the rest of 2025. A cut is extremely unlikely, but expect guidance about how the tariffs could exacerbate the stickiness of inflation and more clarity on the hard/soft data dichotomy. Can policymakers continue to dismiss the nosedive in consumer sentiment? Will they downplay GDP's first-quarter contraction?"
It adds, "The bond market also seems to be in favor of that 100 basis points of easing, teaming up with traders and Trump to bully Powell. But then again, might bond vigilantes instead focus on the potentially inflationary tariffs? Isn't that the reason for the 90-day delay? All the uncertainty is the main reason we are of the opinion that three rate cuts in the second half of this year are in order."
Cunningham asks, "Where does this put the money markets? Yields might decline faster than they might have absent the current proposed tariffs. But we expect they will remain relatively attractive. We also anticipate continued growth of assets under management. Stocks are acting like the worst is behind us, but the White House is sure to smack them again, potentially pushing investor assets to the relative safety of liquidity vehicles. Money market fund assets across the industry continue to hit record highs and value can be found, especially in the longer end of the liquidity yield curve. In a complex time like this, we'd like to think that investors also appreciate active management driving their portfolios."
As we wrote last Thursday, the Investment Company Institute recently published its "2025 Investment Company Fact Book," an annual compilation of statistics and commentary on the mutual fund industry. We reviewed much of the money fund content in our May 1 News, "ICI Publishes 2025 Fact Book, Reviews US, Worldwide Money Funds in '24." But below we focus on the numerous "Data Tables" involving "Money Market Mutual Funds." ICI lists annual statistics on shareholder accounts, the number of funds, net assets, net new cash flows, paid and reinvested dividends, composition of prime and government funds, and net assets of institutional investors by type of institution. (Note: Register soon for our Money Fund Symposium show, which will be held June 23-25, 2025 in Boston, Mass.!)
ICI's annual statistics show that there's been a steady decline in the number of money market mutual funds over the last 17 years. (See Table 35 in the Data Tables.) In 2024, according to the Fact Book, there were a total of 258 money funds, down from 275 in 2023, 291 in 2022, 305 in 2021, 340 in 2020, 364 in 2019, 802 in 2007, and down from 1,014 in 2001. The number of share classes stood at 955 in 2024 down from 1,009 in 2023, 1,044 in 2022, 1,060 in 2021, 1,108 in 2020, 1,126 in 2018 and 1,998 in 2008.
Table 36, "Money Market Funds: Total Net Assets by Type of Fund," shows that total net assets in taxable U.S. money market funds increased $933.1 billion to a record $6.852 trillion in 2024. At year-end 2024, $4.114 trillion (60.0%) was in institutional money market funds, while $2.738 trillion (40.0%) was in retail money market funds. Breaking the numbers down by fund type, $1.079 trillion (15.7%) was in prime funds, $5.638 trillion (82.3%) was in government money market funds, and $135.9 billion (2.0%) was in tax-exempt accounts.
Also, Table 37, "Money Market Funds: Net New Cash Flow by Type of Fund," shows that there was a 703.3 billion in net new cash flow into money market funds last year. A closer look at the data shows $417.1 billion in net cash inflows into institutional funds and a $286.2 billion cash inflow into retail funds. There were also $606.5 billion in net inflows from Government funds, versus $88.3 billion in net inflows from Prime funds.
Table 39, "Money Market Funds: Paid and Reinvested Dividends by Type of Fund," shows dividends paid by money funds were a new record, $297.2 billion, $216.7 billion of which was reinvested (72.9%). Dividends previous record was as high as $235.5 billion in 2023 (when rates were over 5%), and as low as $5.2 billion in 2011 (when rates were 0.05%). Reinvestment rates were 64.4% in 2007 and 62.3% in 2011, so they've remained relatively stable over the past decade.
ICI's Tables 40 and 41, "Taxable Government Money Market Funds: Asset Composition as a Percentage of Total Net Assets" and "Taxable Prime Money Market Funds: Asset Composition," show that of the $5.638 trillion in taxable government money market funds, 14.8% were in U.S. government agency issues, 35.4% were in Repurchase agreements, 41.1% were in U.S. Treasury bills, 9.1% were in Other Treasury securities, and -0.7% was in "Other" assets. The average maturity was 38 days, up 1 day from the end of 2023.
The second table shows that of the $1.079 trillion in Prime funds at year-end 2024, 23.8% was in Certificates of deposit, 25.7% was in Commercial paper, 43.4% was in Repurchase agreements, 0.0% was in US government agency issues, 0.4% was in Other Treasury securities, 0.8% was in Corporate notes, 0.2% percent was in Bank notes, 2.1% was in US Treasury bills, 0.3% was in Eurodollar CDs, and 3.2% was in Other assets (which includes Banker's acceptances, municipal securities and cash reserves).
Table 60, "Total Net Assets of Mutual Funds Held in Individual and Institutional Accounts," shows that there was $2.191 trillion of assets in money funds with Institutional investors, and $4.662 trillion in MMF assets in Individual accounts in 2024.
Finally, Table 62, "Taxable Money Market Funds: Total Net Assets of Institutional Investors by Type of Institution," shows of the total of $2.183 trillion in Total Institutional assets, $959.7 billion were held by business corporations (44.0%), $909.0 billion were held by financial institutions (41.6%), $215.6 billion were held by nonprofit organizations (9.9%), and $99.1 billion were held by Other (4.5%).
The U.S. Securities & Exchange Commission's Division of Economic and Risk Analysis (DERA) published a study titled, "Influences on Money Market Fund Price Variations During the March 2020 Market Dislocation," which states in its Abstract, "This white paper examines weekly fluctuations in money market fund ('MMF') market prices surrounding the March 2020 market dislocation, which resulted from the economic disruptions caused by the COVID 19 pandemic.... The analysis in this white paper identifies key factors influencing these price variations, including interest rates, redemptions, portfolio construction, and liquidity. This white paper aims to inform the Commission, investors, and other interested parties with insights into broader trends within the money market fund industry."
The paper explains, "There are three main categories of MMFs: i) government MMFs, which hold a mix of Treasury and government agency instruments (i.e., debt and repurchase agreements ('repos')); ii) prime MMFs, which mainly hold repos, Treasury debt, government agency debt, commercial paper ('CP') and certificates of deposit ('CDs'); and iii) tax-exempt MMFs, which primarily hold municipal debt. As of December 31, 2024, of $7.2 trillion in total MMF net assets, 82% was invested in government MMFs, 16% in prime MMFs, and 2% in tax-exempt MMFs."
It tells us, "By disrupting economic activity, the Covid-19 pandemic adversely affected U.S. funding markets, exacerbating financial stress that culminated in March 2020. MMFs, which previously acted as a conduit for contagion during the Great Recession in 2008, were similarly impacted during this period. Some MMFs experienced volatility in their net asset value per share ('NAV') and faced substantial redemptions as institutional investors shifted capital from institutional prime and institutional tax-exempt MMFs into government MMFs, despite regulatory reform in 2010 and 2014 aimed at enhancing their resiliency."
The SEC writes, "The 2010 reforms required funds to hold more liquid assets, shortened the weighted average maturity of their portfolios, and enhanced stress testing and disclosure requirements. The 2014 reforms, introduced floating NAV for institutional prime and institutional tax-exempt MMFs to mitigate first mover advantage and gave MMF boards for prime and tax-exempt MMFs the ability to implement fees and gates should MMF weekly liquid assets ('WLA') drop below 30%, with the goal of reducing the risk of investor runs. Another reason for the reforms was that market price volatilities for prime and tax-exempt MMFs were much larger than for government funds."
They comment, "Commission staff and other stakeholders studied the impact of the Covid-19 pandemic and the resulting March 2020 market dislocation. The President's Working Group on Financial Markets ('PWG'), for instance, published a report detailing key events -- such as large institutional prime MMF redemptions -- and outlined several policy reform options. The Commission then issued a request for comment ('RFC') on potential policy measures as described by the PWG report and any other topics relevant to any potential reforms. Several of the comment letters received as a result are referenced below. The Commission then adopted reforms in 2023, which included a modified liquidity fee framework, increased liquidity thresholds, and the removal of the gate provision established in the 2014 reforms."
The DERA study states, "The 2021 proposing release for the 2023 reforms described several empirical trends, including fluctuations in prime MMF market prices prior to and around March 2020. Analyses conducted by Commission staff and academics, as discussed in the 2021 proposing release, found no statistically significant correlation between institutional prime MMF redemptions and market prices amid the March 2020 market dislocation. This paper builds on the analyses presented in the 2021 proposing release to examine the key determinants of price variability during this period. Specifically, the report looks at the impact of the Covid-19 pandemic on market price fluctuations, identifying the factors that most significantly influenced market prices. These factors include interest rates, redemptions, portfolio construction, and liquidity."
It explains, "Currently, MMFs can be broadly categorized into those with stable NAVs and those with floating NAVs. Stable NAV MMFs, such as government and retail MMFs, have two distinct prices: the stable NAV (net amortized cost divided by the number of outstanding shares) and the market price (i.e., mark-to-market NAV or shadow price). If the market price remained within $0.0050 of $1, the MMF could price their portfolio using their stable NAV. In contrast, floating NAV MMFs -- typically institutional prime or institutional tax-free MMFs -- must value their shares to four decimal points, reflecting real-time market fluctuations in their underlying assets."
The paper continues, "It was long assumed that the low-risk nature of institutional prime and institutional tax-free MMF assets would limit the potential to cause a deviation in market value from $1 and ultimately material dilution or other unfair results to investors. However, this assumption had not proven to be correct; for example, the market stress of 2008, which resulted in the Reserve Primary Fund 'breaking the buck' and significant numbers of institutional investors running from prime MMFs, triggered regulatory reform, resulting in institutional prime and institutional tax-free MMFs floating their NAV. In addition, it showed the importance of sponsor support in preventing significant deviations in MMF market prices."
It adds, "To reduce volatility in their market prices, MMFs invest in very short-term, high-credit-quality, well diversified debt securities following the guidelines set forth in rule 2a-7. Although these guidelines attempt to control risks a MMF may face, they do not eliminate those risks. Risks that remain may cause the fund's market price to deviate from $1. Changes in interest rates or a security's credit rating, for example, could put temporary downward pressure on an asset's price before it matures at par. In addition, if redemptions lead to fire sales or securities matured at less than the amortized cost, then the fund's market price could decrease below $1."
The SEC also says, "Various other factors (e.g., portfolio construction and liquidity) may also influence market price fluctuation of MMF shares. For example, MMFs may construct their portfolios with a small number of second-tier securities, to the extent the board can determine that those securities present minimal credit risk to the fund. During the March 2020 market dislocation, for instance, second-tier non-financial CP experienced a higher yield increase (higher price decrease) than first-tier securities. In response to the PWG's December 2020 report, one commenter noted that fund managers had difficulty selling their longer maturity assets, while some experienced losses when selling securities. Finally, an issuer may default on payments of principal or interest, generating losses for funds holding the issuer's securities. If the loss is big enough, a stable NAV fund could break the buck while a floating NAV fund could see a decline in its share price."
Finally, they add, "During the March 2020 market dislocation, MMFs faced the added complexity of liquidity constraints, as some managers had to contend with the possibility of implementing fees and gates when WLA amounts approached the 30% threshold following a wave of redemptions. The way MMF managers responded to redemption pressures -- whether by selling assets or strategically managing their liquidity -- had a direct impact on MMF market prices. This paper looks for patterns within this complex environment to better understand the factors driving MMF price movements. The rest of the paper is organized as follows: Section II. describes the data and methodology, Section III. examines the distribution and standard deviation of MMF prices, and Section IV. documents the empirical findings."
The Investment Company Institute released its "2025 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, "With stock markets rising across the globe in 2024 (24% in the United States and 10% in the Asia-Pacific region) worldwide total net assets of equity funds, which invest primarily in publicly traded stocks, increased by 12% to $35.7 trillion at year-end 2024. Bond funds -- which invest primarily in fixed-income securities -- saw their total net assets increase 7% over the same period, somewhat reflecting total returns (capital gains and interest income) on bonds in Europe and the Asia-Pacific region of 3% and 7%, respectively. Net assets of money market funds, which are regulated funds restricted to holding short-term, high-quality debt instruments, also increased substantially." We excerpt from the latest "Fact Book" below. (See too Tuesday's Link, "2025 Investment Company Fact Book," which quotes from ICI's press release.)
Discussing "Worldwide" mutual funds (page 18), ICI writes, "Worldwide net sales of money market funds remained robust in 2024, totaling $1.5 trillion, unchanged from 2023.... Investors across all geographical regions continued to demonstrate demand for money market funds, with the United States accounting for more than half of total net inflows. Investor demand for money market funds in the United States and Europe was $920 billion and $239 billion in 2024, respectively. Additionally, in the Asia-Pacific region, money market funds experienced net inflows of $336 billion in 2024."
They explain, "Investors use money market funds because they are professionally managed, tightly regulated vehicles with holdings limited to high-quality, short-term debt instruments. As such, they are highly liquid, attractive, cash-like alternatives to bank deposits. Generally, demand for money market funds is dependent upon their yields and interest rate risk exposure relative to other high-quality fixed-income securities."
ICI continues, "In the United States, net sales of money market funds remained positive because of sustained demand from both retail and institutional investors. In 2023, money market fund yields reached their highest level in more than 15 years, and yields continued to remain high in 2024 despite three cuts to the federal funds rate in the second half of the year. Both retail and institutional investors were attracted to the high market yields and low interest-rate risk offered by money market funds."
The Worldwide section adds, "Demand for money market funds in the Asia-Pacific region is dominated by Chinese money market funds, which hold the bulk of money market fund total net assets in the region. In the second half of 2024, the People's Bank of China lowered interest rates, decreasing the official one-year loan prime rate to 3.1 percent. The reduction in the short-term interest rate was part of a set of policy measures intended to address sluggish economic performance. Regardless, net inflows into money market funds in the Asia-Pacific region remained positive for the year."
Under the section "Role of Investment Companies in Financial Markets," they say, "Investment companies held 24% of bonds issued by US corporations and foreign bonds held by US residents at year-end 2024 and 17% of the US Treasury and government agency securities outstanding. Investment companies also have been important investors in the US municipal securities market, holding 28% of the securities outstanding at year-end 2024. Finally, mutual funds (primarily prime money market funds) held 24% of the US commercial paper market -- a critical source of short-term funding for many major corporations around the world."
ICI writes in Chapter 3, "Overview of Mutual Fund Trends," "The US mutual fund industry remained the largest in the world, with $28.5 trillion in total net assets at year-end 2024. The majority of US mutual fund net assets were in long-term mutual funds, with equity funds alone making up 53% of US mutual fund net assets. Money market funds were the second-largest category, with 24% of net assets. Bond funds (18%) and hybrid funds (6%) held the remainder."
They state, "A variety of factors influence investor demand for mutual funds. For example, US households rely on equity, bond, and hybrid mutual funds to meet long-term personal financial objectives, such as preparing for retirement, saving for emergencies, or saving for education. US households, as well as businesses and other institutional investors, use money market funds as cash management tools because they provide a high degree of liquidity and access to short-term market yields."
ICI adds, "Investor demand for mutual funds remained robust in 2024, as inflows into money market funds and bond funds more than offset outflows from equity funds and hybrid funds. Money market funds experienced strong demand as investors were attracted to high short-term yields. Bond mutual funds saw modest demand, with bond market returns and portfolio rebalancing likely playing key roles. By contrast, equity mutual funds experienced outflows in 2024 (despite strong stock market returns), primarily reflecting an ongoing shift to other products and portfolio rebalancing."
Discussing, "Investors in US Mutual Funds," they comment, "Demand for mutual funds is, in part, related to the types of investors who hold mutual fund shares. Retail investors (i.e., households) held the vast majority (88%) of the $28.5 trillion in US mutual fund total net assets at year-end 2024.... When looking at only long-term mutual funds, the share of net assets held by retail investors was even higher (94%). Retail investors also held substantial money market fund net assets ($4.7 trillion), but this was a relatively small share (19%) of their total mutual fund net assets ($25.0 trillion)."
The Fact Book continues, "By contrast, institutional investors such as nonfinancial businesses, financial institutions, and nonprofit organizations held a relatively small portion of mutual fund net assets. At year-end 2024, institutions held $3.6 trillion or 12% of mutual fund net assets.... The majority (61%) of which was held in money market funds. One of the primary reasons institutions use money market funds is to help manage their cash balances."
The section on "Money Market Funds" (page 57), explains, "In 2024, money market funds saw substantial inflows of $703 billion … as short-term interest rates remained elevated. Demand was positive for all categories of money market funds in 2024, with government money market funds experiencing the bulk of inflows ($606 billion). Prime money market funds and tax-exempt money market funds saw inflows of $88 billion and $9 billion, respectively."
Finally, ICI writes, "In July 2023, the Securities and Exchange Commission (SEC) adopted in its money market funds reforms a mandatory liquidity fee requirement for institutional prime money market funds. This new rule requires institutional prime funds to charge investors a liquidity fee under certain conditions, which is complex and costly for some money market fund sponsors to calculate. These concerns led 16 institutional prime funds to either liquidate or convert to government money market funds before the rule’s implementation on October 2, 2024.... These funds had about $60 billion in net assets at the time of their liquidation or conversion."
