Money Market News
Financial Planning published, "With $7.7T in Money Markets, Advisors Confront Client Cash Hoarding," which says, "Falling interest rates have advisors confronting a seemingly counterproductive phenomenon: Even as the returns that can be made on cash holdings dwindle, investors keep plowing into money markets rather than stocks and bonds. The research firm Crane Data reported that cash investments in money market funds exceeded $7.7 trillion for the first time. That record was hit even as interest rates on money markets, which typically invest in short-term government and corporate debt, have fallen from offering an average yield of more than 5% as recently as last year to [3.9%] now, according to Crane."
The Investment Company Institute released its latest weekly "Money Market Fund Assets" report Thursday, which shows money fund assets rising $31.2 billion to a record $7.315 trillion. MMFs fell $19.5 billion the prior week, after rising $43.8 billion (to the previous record of $7.303 trillion) the week before. MMF assets are up by $890 billion, or 13.9%, over the past 52 weeks (through 9/24/25), with Institutional MMFs up $503 billion, or 13.1% and Retail MMFs up $387 billion, or 15.0%. Year-to-date, MMF assets are up by $464 billion, or 6.8%, with Institutional MMFs up $239 billion, or 5.8% and Retail MMFs up $225 billion, or 8.2%. (Note: Thanks again to those of you who attended our European Money Fund Symposium earlier this week in Dublin, Ireland! Mark your calendars for next year's show in Paris, Sept. 24-25, 2026!)
The Federal Reserve Bank of New York posted two briefs on tokenization on its "Liberty Street Economics" blog. The first, "The Emergence of Tokenized Investment Funds and Their Use Cases," tells us, "A blockchain is a distributed database where independent computers across the world maintain identical copies of a transaction record, updating it only when the network reaches consensus on new transactions -- making the history transparent and extraordinarily difficult to alter. Historically, bonds have traded almost entirely in over-the-counter (OTC) markets, while equities and money market fund shares have largely settled through centralized infrastructures such as stock exchanges and central securities depositories. In both settings, each institution maintains its own records, and post-trade steps like confirmation, clearing, and settlement require multiple intermediaries and repeated reconciliation."
The Investment Company Institute published, "Worldwide Regulated Open-Fund Assets and Flows, Second Quarter 2025," which shows that money fund assets globally rose by $470.2 billion, or 4.0%, in Q2'25 to a record $12.315 trillion. (The totals would have been $12.587 trillion if Australia and New Zealand had been included.) Increases were led by a sharp jump in money funds in China and Ireland, while France and the U.S. also rose. Meanwhile, money funds in Argentina were lower. MMF assets worldwide increased by $1.672 trillion, or 15.7%, in the 12 months through 6/30/25, and money funds in the U.S. now represent 57.0% of worldwide assets. In Q1, European money fund asset totals surpassed Asian money fund totals for the first time since Q4'2017, and they continue to rise. We review the latest Worldwide MMF totals, below. (Note: Thank you to those of you who attended our European Money Fund Symposium in Dublin! Mark your calendars for next year's show in Paris, Sept. 24-25!)
Money fund yields (7-day, annualized, simple, net) declined by 6 bps to 4.03% on average during the week ended Friday, September 19 (as measured by our Crane 100 Money Fund Index), after falling 1 bp the week prior. Fund yields should continue to slide lower in the coming weeks after the Fed cuts rates by 25 bps on September 17. They've declined by 103 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they've declined by 60 bps since the Fed last cut rates by 1/4 point on 11/7/24. Yields were 4.11% on 8/31, 4.12% on 7/31, 4.13% on 6/30, 4.10% on 5/31, 4.13% on 4/30/25, 4.14% on 3/31/25 and 4.28% on average on 12/31/24. MMFs averaged 4.75% on 9/30/24, 5.10% on 6/28/24, 5.14% on 3/31/24 and 5.20% on 12/31/23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 676), shows a 7-day yield of 3.93%, down 6 bps in the week through Friday. (Note: Thank you to those of you who attended our European Money Fund Symposium in Dublin! Safe travels home!)
The U.K.-based Institutional Money Market Funds Association, or IMMFA, published a paper titled, "The Tokenisation of Money Market Funds Part 2: 'What has been achieved so far?'" It explains, "Recent strides in the technology of tokenisation and its application to funds have created opportunities to enhance the attractiveness of Money Market Funds (MMFs) for investors. As noted in our previous white paper 'The Tokenisation of MMFs,' tokenisation brings a number of potentially transformative benefits including increased portability and reduced operational friction, making it much easier to transfer ownership of MMFs and facilitate new usages, such as their use as margin collateral, and thereby attract a wider investor base." (Note: For those of you attending our European Money Fund Symposium Sept. 22-23, welcome to Dublin! Watch for our Tokenized Money Funds & Tech Issues session on Monday morning and watch for IMMFA's Veronica Iommi to speak on Tuesday.)
The Investment Company Institute released its latest weekly "Money Market Fund Assets" report Thursday, which shows money fund assets falling $19.5 billion to $7.283 trillion. MMFs rose $43.8 billion last week to a record $7.303 trillion, and $52.4 billion the week before. MMF assets are up by $980 billion, or 15.5%, over the past 52 weeks (through 9/17/25), with Institutional MMFs up $584 billion, or 15.6% and Retail MMFs up $395 billion, or 15.4%. Year-to-date, MMF assets are up by $433 billion, or 6.3%, with Institutional MMFs up $208 billion, or 5.0% and Retail MMFs up $225 billion, or 8.2%. (Note: Safe travels to those of you headed to our European Money Fund Symposium next week in Dublin, Sept. 22-23! We look forward to seeing you in Ireland!)
As expected, the Federal Reserve's FOMC cut interest rates by a quarter percent to a range of 4.0-4.25%, which means that money market fund yields will decline by a similar amount over the coming month. Our Crane 100 Money Fund Index, an average of the 100 largest money funds, should fall from its current 4.09% to below 4.0% next week and to around 3.85% as we move into October. (Money funds have a WAM, or weighted average maturity of 41 days currently, so they should take this long to reflect the full Fed move.) A post titled, "Federal Reserve issues FOMC statement," explains, "Recent indicators suggest that growth of economic activity moderated in the first half of the year. Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen." (Note: Safe travels to those of you headed to our European Money Fund Symposium next week in Dublin (Sept. 22-23)! We look forward to seeing you there!)
Crane Data's latest Money Fund Intelligence International shows that assets in European or "offshore" money market mutual funds increased over the past 30 days to a new record high $1.543 trillion, rising from $1.519 trillion the month prior. Yields inched lower, while assets for USD, EUR and GBP MMFs all rose over the past month. Like U.S. money fund assets, European MMFs repeatedly hit record highs in 2023, 2024 and 2025 (after a pause in Q2). These U.S.-style money funds, domiciled in Ireland or Luxembourg and denominated in US Dollars, Pound Sterling and Euros, increased by $23.8 billion over the 30 days through 9/12. The totals are up $110.2 billion (7.7%) 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 USD. See our latest MFI International for more on the "offshore" money fund marketplace. These funds are only available to qualified, non-U.S. investors and are almost entirely institutional.) (Note too: Register ASAP for our European Money Fund Symposium, which is next week, Sept. 22-23, 2025 in Dublin!)
The September issue of our Bond Fund Intelligence, which was sent to subscribers Monday, features the stories, "Bond Funds Continue Raking in Cash; ETFs Hit $2 Trillion," which covers the recent surge in bond fund inflows; and "Vanguard F-I Head Devereux Featured by Morningstar," which excerpts from a recent interview with a global head of fixed income. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns were higher while yields were lower. We excerpt from the new issue below. (Contact us if you'd like to see our latest Bond Fund Intelligence and BFI XLS spreadsheet, or our Bond Fund Portfolio Holdings data.) (Note: For those attending our European Money Fund Symposium next week, Sept. 22-23, in Dublin, Ireland, safe travels and we look forward to seeing you!)
The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (a.k.a. "Flow of Funds") late last week, and among the 4 tables it includes on money market mutual funds, the Second Quarter 2025 edition shows that Total MMF Assets increased by $83 billion to $7.481 trillion in Q2'25. The Household Sector, by far the largest investor segment with $4.877 trillion, saw the biggest asset increase in Q2, followed by Property-Casualty Insurance. The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also showed noticeable increases for the Mutual Funds and Nonfinancial Corporate Business categories in Q2 2025. (Note: For those attending our upcoming European Money Fund Symposium, Sept. 22-23, 2025 in Dublin, Ireland, safe travels and we look forward to seeing you next week!)
The U.S. Securities and Exchange Commission published its latest monthly "Money Market Fund Statistics" summary (much later than usual this month), which shows that total money fund assets rose by $60.2 billion in July 2025 to a record high $7.533 trillion, after hitting a record $7.473 trillion the month prior. The SEC shows Prime MMFs increased $22.7 billion in July to $1.303 trillion, Govt & Treasury funds increased $39.0 billion to $6.089 trillion and Tax Exempt funds decreased $1.5 billion to $141.1 billion. Taxable yields were mixed in July after previous decreases in June, May, April, March, February and January. The SEC's Division of Investment Management summarizes monthly Form N-MFP data and includes asset totals and averages for yields, liquidity levels, WAMs, WALs, holdings, and other money market fund trends. We review their latest numbers below. (Our MFI XLS monthly shows money fund assets increasing $136.0 billion in August 2025 to a record of $7.614 trillion. In September month-to-date through 9/10, total money fund assets have increased by $70.1 billion to a record $7.672 trillion, according to Crane Data's separate, and slightly smaller, MFI Daily series.)
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