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We learned from Dechert LLP Partner Brenden Carroll that the U.S. Securities & Exchange Commission recently published a "Risk Alert" entitled, "Top Compliance Topics Observed in Examinations of Investment Companies and Observations from Money Market Fund and Target Date Fund Initiatives." It tells us, "The Office of Compliance Inspections and Examinations ('OCIE') is issuing this Risk Alert to provide investment companies, investors, and other market participants with information on the most often cited deficiencies and weaknesses that the staff has observed in recent examinations of registered investment companies ('funds'). In addition, this Risk Alert includes observations by the staff from national examination initiatives focusing on money market funds and target date funds."

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Crane Data's latest Money Fund Market Share rankings show assets were up again for the majority of U.S. money fund complexes in October. Money fund assets increased by $84.8 billion, or 2.2%, last month to $3.871 trillion. Assets have climbed by $250.3 billion, or 6.9%, over the past 3 months, and they've increased by $780.4 billion, or 25.2%, over the past 12 months through Oct. 31, 2019. The biggest increases among the 25 largest managers last month were seen by Fidelity, JP Morgan, BlackRock, Vanguard, Federated, Goldman Sachs and Schwab, which increased assets by $27.7 billion, $10.6B, $8.3B, $7.9B, $7.7B, $7.6B and $7.3B, respectively. Declines in assets among the largest complexes in October were seen by Invesco, Wells Fargo and Dreyfus, which decreased by $4.0B, $2.1B and $1.2B. 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 below, and we also look at money fund yields in October.

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The November issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Thursday morning, features the articles: "Portal Wars: Fund Managers Add to Competition in Space," which reviews the latest in online money market portals; "J.P. Morgan A.M. Enters Portal Market w/Morgan Money," which discusses JPMAM's recent changes and initiatives; and, "Reversal of Fortunes: Yields Plunge in '19 After '18 Jump," which discusses the recent decline in yields. We've also updated our Money Fund Wisdom database with Oct. 31 statistics, and sent out our MFI XLS spreadsheet Thursday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our November Money Fund Portfolio Holdings are scheduled to ship on Tuesday, Nov. 12, and our Nov. Bond Fund Intelligence is scheduled to go out Thursday, Nov. 14.

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U.K.-based publication Treasury Today hosted a webinar yesterday entitled, "Short-term investments, long-term thinking: how ESG positively impacts value," which featured Aviva Investors' Senior Portfolio Manager Demi Angelaki and Aviva's Global Head of ESG Investment Solutions Marte Borhaug. The two "discuss how the principles of responsible investment can positively impact investment outcomes for short-term investors" and "explore the unique challenges faced by liquidity portfolio managers." The webinar's description explains, "Investors in money market funds and ultra-short duration bond funds have traditionally focused their attention on liquidity, yield and capital preservation. Increasingly however, investors in such strategies are realising the positive impact the integration of environmental, social and corporate governance (ESG) factors can have on investment outcomes."

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Rates on brokerage sweep accounts, bank accounts and money market funds all moved lower following last Wednesday's Federal Reserve rate cut. (See our Oct. 31 Link of the Day, "Fed Cuts Rates a Third Time.") Our latest Brokerage Sweep Intelligence publication, with data as of Friday, Nov. 1, shows E*Trade, Fidelity, Merrill Lynch and TD Ameritrade all lowering rates. Fidelity, who still pays the highest sweep rate, cut its yield by 12 bps to 0.82%. Merrill Lynch dropped rates on balances over $250K, but their 100K tier remained at 0.10%. TD Ameritrade cut rates on most tiers; their 100K tier dropped 2 bps to 0.02%. E*Trade's 25K tier through 250K (balance) tier fell to 0.01%.

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UBS Asset Management is the latest money fund manager to file to launch an ESG Money Fund. The registration filing for UBS Select ESG Prime Institutional Fund says the fund's objective is, "Maximum current income as is consistent with liquidity and preservation of capital while incorporating select environmental, social, and governance criteria ('ESG') into the investment process." UBS's offering, which will also include "Investor" and "Preferred" fund shares, should become the fifth ESG offering, following DWS, BlackRock, SSGA and Morgan Stanley's launches (or filings). (Note: Goldman has a "social" fund and JPMorgan has integrated ESG principles into all of its funds, as have several other managers. See our Oct. 17 News, "Morgan Stanley Latest to Convert MMF to ESG; New DWS European ESG.")

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Money fund assets rose for the 25th week out of the past 28, and broke above $3.5 trillion for the first time since September 2009. ICI's latest "Money Market Fund Assets" report shows that MMF totals have increased by $466.0 billion, or 15.3%, year-to-date. Over the past 52 weeks, ICI's money fund asset series has increased by $629 billion, or 21.8%, with Retail MMFs rising by $249 billion (22.8%) and Inst MMFs rising by $380 billion (21.2%). We review ICI's latest assets, as well as their monthly "Trends" and "Portfolio Composition" totals, below.

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A press release entitled, "J.P. Morgan 2019 Global Liquidity PeerView Survey Reveals Demand for Money Market Funds Remains Strong in Late-Cycle, as Focus on ESG Increases." It explains, "J.P. Morgan Asset Management released the 2019 Global Liquidity PeerView Survey, revealing that even as the market outlook continues to evolve, demand for money market funds is still strong, adoption of treasury management systems continues to rise, and more investors are incorporating ESG criteria to screen investments. The 2019 Global Liquidity PeerView Survey features responses from 346 CIOs, treasurers and other senior cash investors around the world, representing an approximate combined cash balance of USD $1 trillion."

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As the Federal Reserve Board of Governors meets and prepares to cut short-term interest rates a third time, yields on money market funds, bank deposits and brokerage sweeps continue to inch lower. (They should drop again following an expected Fed cut Wednesday.) The highest-yielding money market funds, which rose above the 2.0% level about a year ago, are now almost all below 2.0% once again. As of 10/28, just one money fund on CraneData.com's Highest-Yielding Money Funds table (which excludes internal or restricted funds), DWS ESG Liquidity Fund Cap, yields over 2.0%. Only a handful of "fin-tech" and internet banks are still paying over 2.0% currently, but these should all be gone by next week. The average money fund, as measured by our Crane 100 Money Fund Index, is yielding 1.68% as of Oct. 29, down from 1.80% a month ago and down from 2.08% at the start of the year.

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Strategic Treasurer's latest "Treasury Update Podcast," entitled, "Seismic Shifts in Corporate Treasury: Focus on Investments," features Morgan Stanley Investment Management's Rick Wilkinson and Fred McMullen. The pair discuss online money market fund trading portals in detail, and also address a number of other recent technology topics. Wilkinson says, "Let's look at the portal landscape first. That was one of the first technologies that was introduced that really helped the corporate treasurer in their day to day activities. It allowed them to go to one spot to place all of their investments instead of having to go to each of the fund families independently."

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Federated Investors, the 5th largest manager of money funds, reported 3rd quarter earnings last week and hosted its quarterly earnings call Friday. The company, which generates over 40% of its revenue from money funds, discussed recent money market fund trends, and compared money funds to recent bank deposit and ultra-short ETF flows. (See the press release, "Federated Investors, Inc. Reports Third Quarter 2019 Earnings" and see the Q3 Earnings Call Transcript on Seeking Alpha here.) J. Christopher Donahue, president and chief executive officer, commented in the earnings release, "As the Federal Reserve cut rates twice in the quarter, investors sought Federated's range of ultrashort products and other fixed income strategies, and our liquidity management solutions approached record highs."

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Money fund providers and corporate cash managers gathered in Boston earlier this week for AFP 2019, the Association for Financial Professionals' Annual Conference. Perennial topics like safety, liquidity and yield, along with recent market events, were discussed, as well as a new dose of technology, portals and ESG. We briefly quote from a couple of the sessions below, and we also review the latest money fund asset totals.

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