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Charles Schwab liquidated its Schwab Money Market Fund late last week as the brokerage continues to shift large amounts of money market fund "sweep" assets into bank deposits. Schwab MMF (SWMXX) declined in assets to zero as of Friday, from $15.4 billion two years ago to $7.3 billion on April 30, 2018. Schwab is the 8th largest manager of money market mutual funds with $138.8 billion in assets as of April 30, 2018. The brokerages' money fund assets declined by $4.1 billion in April, by $16.9 billion over 3 months, and by $17.5 billion, or 11.2%, over the past 12 months.

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An update from the European publication Euromoney, entitled, "Treasurers adapt ahead of European money market reforms," quotes from two experts in the European money fund space, Invesco's Natalie Cross and SSGA's Will Goldthwait. They write, "With six months to go before money market reforms are imposed on all funds in Europe, treasurers hoping to earn a return on their cash are scoping out the best options available. By January 21, existing and new European money market funds (MMF) will have to fall in line with reforms that will see constant net asset value (CNAV) restricted to government portfolios only." We review this latest update on pending European money fund reforms, and also cover the latest money market fund asset statistics below. (Note: The new European General Data Protection Regulations go into effect today, so Crane Data has updated its privacy policies. See below or ask us for details.)

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Deutsche Asset Management, which recently announced a name change to DWS Investment Management, filed to change the monikers of its Deutsche money market funds back to DWS, which they were named prior to 2014. The Prospectus Supplement says, "The following changes will take effect on or about July 2, 2018: Deutsche Investment Management Americas Inc., the investment advisor for the below-listed funds, will be renamed to DWS Investment Management Americas, Inc. In addition, the "Deutsche funds" will become known as the "DWS funds" and the below-listed Deutsche funds and share classes, as applicable, will be renamed as follows." (For the previous name change, see Crane Data's Aug. 15, 2014 News, "DWS Funds Change to Deutsche.")

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This month, Money Fund Intelligence interviews James Morris, a Vice President at Investortools, an Illinois-based company that produces portfolio management and compliance software. We talk about their history and software products, recent regulatory changes, and cash separate accounts. Our interview follows. (Note: This interview is reprinted from the May issue of our flagship Money Fund Intelligence newsletter; contact us at inquiry@cranedata.com to request the full issue.)

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The impact of "repatriation," or bringing previously trapped "offshore" cash and assets back into the U.S., continues to be one of the biggest guessing games in the money markets. BlackRock is one of the latest to address the topic, in a recent paper entitled, "When corporate cash goes free: Repatriation and the impacts of tax reform on the short-term markets." They explain, "The seatbelt sign has been turned off, and we believe corporations are starting to assess how to address new rules for overseas cash in the just-released U.S. tax code reform. We offer some of our early thinking on what the repatriation rules of the tax overhaul may mean for short-term investors, markets and the economy." (See also J.P. Morgan Securities' new comprehensive update, "Repatriation manifestation.")

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The Securities and Exchange Commission released its latest "Money Market Fund Statistics" summary late last week. It shows that total money fund assets rose by $31.0 billion in April to $3.105 trillion, with most of the increase coming from Prime Funds. Prime MMF assets rose by $22.1 billion to $685.3 billion (after falling by $3.4 billion in March and $2.8 billion in February, but rising by $3.2 billion in January). Government money funds increased by $10.1 billion, while Tax Exempt MMFs fell by $1.1 billion. Gross yields rose again for all types of money funds in the latest month. 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.

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Fitch Ratings published a report, "Money Market Funds in Saudi Arabia," which sheds some light upon the embryonic money market fund industry in the Middle Eastern Kingdom. Their press release, entitled, "Fitch: Institutional Money Fund Foundations Laid in Saudi Arabia," says, "Fitch Ratings says in a new report that the foundations of an institutional money fund industry have been laid in Saudi Arabia. Retail investors represent the largest share of money fund investors in Saudi Arabia; however, Fitch has identified an increasing number of funds offering high minimum initial investment share classes, which are typically accessible only to large or sophisticated, ie non-retail, investors. The growth of this nascent institutional segment is supported by the growth of the money fund sector in Saudi Arabia and the solid regulatory framework already in-place for these funds."

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As we mentioned last week, the Investment Company Institute recently published its "2018 Investment Company Fact Book," an annual compilation of statistics and commentary on the mutual fund industry. (See our May 11 News, "ICI 2018 Fact Book Reviews MMF Demand, Reforms, Composition in '17.") We reviewed the update on worldwide and U.S. domestic money funds in our last piece, but today we focus on the numerous "Data Tables" involving "Money Market Mutual Funds, which start on page 242. 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.

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The SEC released it latest quarterly "Private Funds Statistics" report recently, which summarizes Form PF reporting and includes some data on "Liquidity Funds." The publication shows a jump in overall Liquidity fund assets in the latest quarter to $558 billion. A previous press release, entitled, "SEC Staff Supplements Quarterly Private Funds Statistics" tells us, "The U.S. Securities and Exchange Commission staff ... published a suite of new data and analyses of private fund statistics and trends. The Private Funds Statistics ... offers investors and other market participants valuable insights by aggregating data reported by private fund advisers on Form ADV and Form PF. New analyses include ... characteristics of private liquidity funds." We review the latest SEC report, as well a money fund article by ignites, below.

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Crane Data's MFI International shows total assets in "offshore" money market mutual funds, U.S.-style funds domiciled in Ireland or Luxemburg and denominated in USD, Euro and GBP (sterling), rising in May after also rising in April. Offshore US Dollar MMFs have been rising and falling in waves since December 2017. They rose sharply in January, fell in February and March, rose in April, but fell again in early May. Last year, assets of all three currencies combined increased by $100 billion, or 13.7%, to $831 billion. Year-to-date in 2017 (through 5/11/18), MFII assets are up $5.7 billion to $836.5 billion, but USD assets are down slightly. U.S. Dollar (USD) funds (158) account for about half ($421.6 billion, or 50.4%) of the total, while Euro (EUR) money funds (98) total E87.8 billion and Pound Sterling (GBP) funds (110) total L215.5 billion. USD funds are down $3.6 billion, YTD, but were up $27B in 2017. Many are watching these totals closely for signs of possible "repatriation" of US dollar assets held in Europe, but the data only shows minimal outflows so far.

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The May issue of Crane Data's Bond Fund Intelligence, which was sent out to subscribers Monday morning, features the lead story, "Tale of Two Categories: Ultra Short Hot, High-Yield Not," which reviews the recent shift in flows into shorter-term funds, and the profile, "ICI 2018 Fact Book Reviews Bond Fund Trends, Flows," which reviews the latest on bond funds from the annual update from the mutual fund industry's trade association. Also, we recap the latest Bond Fund News, including the continued move higher in yields and drop in returns. BFI also includes our Crane BFI Indexes, which show declines in April in most sectors except ultra-short and high-yield funds. We excerpt from the latest BFI below. (Contact us if you'd like to see a copy of our latest Bond Fund Intelligence and BFI XLS, and watch for our next Bond Fund Portfolio Holdings data set next Monday.

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The Investment Company Institute released its "2018 Investment Company Fact Book," an annual compilation of statistics and commentary on the mutual fund industry. Subtitled, "A Review of Trends and Activities in the Investment Company Industry," the latest edition reports that equity funds again saw outflows, bond funds had near record inflows, and money market funds had their strongest inflows in almost 10 years in 2017. Overall, money funds assets were $2.847 trillion at year-end 2017, making up 15% of the $18.7 trillion in overall mutual fund assets. Retail investors held $1.007 trillion, while institutional investors held $1.840 trillion. We excerpt from the latest "Fact Book" below. (Note: Our Peter Crane will also be attending ICI's General Membership Meeting on May 23, so let us know if you'd like to arrange a visit at the show in Washington.)

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