Press Releases Archives: March, 2012

A press release sent out yesterday entitled, "Fitch Updates Global Money Market Fund Criteria, Core Ratings Framework Unchanged," says, "Fitch Ratings has published updated global criteria for rating money market funds (MMFs). The core analytical framework remains unchanged, and Fitch does not expect any ratings changes as a result of the updated criteria. The updated criteria makes one notable change in relation to Fitch's treatment of highly-rated sovereign, government agency and supranational securities with respect to repurchase agreement collateral and portfolio liquidity."

The release adds, "Other and more marginal criteria adjustments include clarification on how Fitch treats MMFs' direct and collateralized exposures to a fund's sponsor or parent, which is mostly relevant for European MMFs, more detailed guidelines on investments denominated in a currency other than that of the fund's base currency and related currency hedging, as well as guidelines on the fund's custodian bank. Fitch's global MMF criteria focuses on MMFs that seek to achieve principal preservation and provide shareholder liquidity through active management of credit, market, and liquidity risks."

Fitch adds, "MMF ratings are assigned to MMFs that operate as constant net asset value (CNAV) funds as well as certain European variable net asset value (VNAV) funds." The full report is entitled, "Global Money Market Fund Rating Criteria."

In other news, Reuters released an article entitled, "Big US money funds' fees outpace investor returns", which features a relatively detailed discussion on fee waivers, revenues and industry consolidation. It says, "The biggest U.S. money market funds have done a better job of preserving their management fees than many realize, a development that may surprise investors whose dividends have plummeted 96 percent from peak levels five years ago."

The article explains, "Investors collected $5.24 billion in total dividends from money funds in 2011, a 72 percent decline from $18.6 billion two years earlier and a huge plunge from the $127.9 billion gained back in 2007, before the Federal Reserve chopped short-term rates to near zero. In contrast, the fees collected by money fund sponsors declined to $4.7 billion last year, a 57 percent drop from 2009 and a 52 percent decline since five years earlier, according to data from the Investment Company Institute, the trade group for the fund industry."

Reuters adds, "The big players have demonstrated plenty of resiliency in even the most trying market conditions, said Pete Crane, who runs research firm Crane Data. Large funds, which generate far more in fees than are needed to pay for their managers, credit analysts and other expenses, have enormous economies of scale, he said."

They quote Crane, "The money fund industry has yet to see any real consolidation or the exodus of a major player. If the pressure were that acute, you would see fees being introduced."

Bloomberg writes "Top Money Funds Doubled French Bank Holdings Last Month". The article says, "The 10 biggest prime U.S. money market mutual funds more than doubled their holdings in French banks in February, as lending from the European Central Bank bolstered investor confidence. French bank holdings rose to $18.2 billion from $8.8 billion in the month, according to data compiled and published in today's Bloomberg Risk newsletter. Funds run by New York- based JPMorgan Chase & Co. (JPM) and Boston's Fidelity Investments accounted for one-third of the total increase." Bloomberg quotes us, "It appears the risk trade is back on, but funds are still staying very cautious," Peter Crane, president of research firm Crane Data LLC in Westborough, Massachusetts." The piece adds, "The top U.S. money market funds have boosted lending to French banks for two straight months after withdrawing from them for most of 2011 because of concern that Europe's sovereign-debt crisis might lead to defaults. The European Central Bank offered three-year loans to the banks in December and February, easing funding worries surrounding French banks since August."

Money Fund Symposium, Crane Data's annual money market mutual fund conference (the 4th one will be in Pittsburgh, June 20-22), is featured in Meeting Planning firm Kinsley Associates' latest "In the Know" newsletter, in an article entitled, "5 Keys to Successful Conferences and Meetings for Small Businesses." The article cites the show's dramatic growth in its first three years and says, "Many small companies fall prey to the belief that only large companies are poised to include conferences and meetings in their solution offerings. Admittedly, larger companies may have more advantages due to their size, but smaller companies can reap the same benefits if they partner with the right company and utilize best practices. In fact, smaller companies can achieve fantastic results because they are small and nimble. Crane Data, a company with just seven employees hired Kinsley Meetings to help with its initial conference. These are the keys to success we employed for Crane Data that prove small companies can successfully navigate conferences and meetings: 1. Plan Ahead. 2. Speakers and content drive the momentum. 3. Leverage existing products/services. 4. Destination is key. 5. Hire the right company. Hosting a conference or meeting takes strategic planning and attention to detail. Finding the right partner is crucial to conducting a successful conference or meeting.... In the case of Crane Data, Kinsley Meetings handles all the logistics for the conferences, including the destination, venue, registration, and all the fine details. This well-defined separation of responsibilities enables Peter to focus on the educational content of the meeting, and Kinsley to focus on its core strength: meetings." For more on Crane's Money Fund Symposium, visit