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This month, Money Fund Intelligence speaks with Eric Thole, CEO of U.S. Bancorp Asset Management and President of First American Funds, and Jeff Plotnik, Director of Money Market Fund Management for First American Funds. We look back at the implementation of reforms and changes in 2016, and we discuss the current environment and future of money funds. Our Q&A follows. (This interview is reprinted from the February issue of our flagship Money Fund Intelligence newsletter; e-mail info@cranedata.com to request the full issue.)

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PIMCO posted a brief Friday entitled, "Encroaching Risks to Capital Preservation." Written by Jerome Schneider, head of short-term portfolio management, the piece discusses rising rates and inflation and the benefits of moving beyond money markets. It says, "Positive economic data continue apace in the U.S., from firming employment to renewed consumer spending. The latest news on inflation confirms the trend: The Consumer Price Index (CPI) showed inflation running at 2.5% year-over-year." We review this below, along with excerpts from Fidelity's Annual Report. (Note: PIMCO's Jerome Schneider is scheduled to give the keynote talk at next month's Bond Fund Symposium, which is scheduled to take place March 23-24 at the Boston Hyatt Regency.)

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The Investment Company Institute released its latest weekly "Money Market Mutual Fund Assets" report and monthly "Money Market Fund Holdings" summary (with data as of Jan. 31, 2017) yesterday. The former shows Prime assets increasing for the second week in a row, while the latter, which reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds, also shows Prime assets and European-related holdings increasing. (See our Feb. 10 News, "Feb. Money Fund Portfolio Holdings Show Repo Drop, Credit Rebound.")

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Treasury Strategies published a statement entitled, "Questions for the Record," following MD Tony Carfang's earlier appearance at a Congressional hearing on, "The Impact of Regulations on Short-Term Financing," before the "Subcommittee on Capital Markets and Government Sponsored Enterprises." (See our Dec. 16 News, "Money Fund Assets Rise Again, Prime Up; Carfang Testifies on Impacts," and see the press release, "Treasury Strategies Testifies on 'The Impact of Regulations on Short-Term Financing' to the U.S. Congress.") We summarize the letter below, and we also cover Reuters' story on the OFR's Floating NAV brief.

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The February issue of Crane Data's Bond Fund Intelligence, which was sent out to subscribers Tuesday, features the lead story, "JP Morgan on Ultra-Short Bond 'Alt-Cash' Space," which reviews a recent J.P. Morgan Securities' "Short Term Market Outlook and Strategy". It also includes the article, "BFU: Crane & Hiatt on Ultra-Shorts," which excerpts from our recent Money Fund University session on short-term bond funds. In addition, we recap the latest Bond Fund News, including the brief, "Bond Fund Returns Higher in Jan.; Yields Move Lower." BFI also includes our Crane BFI Indexes, averages and summaries of major bond fund categories. 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 data spreadsheet. Also, for those planning on attending, please register soon and make hotel reservations for our upcoming Bond Fund Symposium, March 23-24 in Boston.)

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Capital Advisors Group writes "Using Separately Managed Accounts (SMAs) to Ride the Tides of Uncertainty," which explains, "Recent events serve as a prelude to what is to come from the new administration. Active cash portfolio management with a separate account solution helps manage policy uncertainty, market volatility, headline and geopolitical risk. Fiscal and monetary policies, international relations and political conflicts may bring more uncertainty in 2017 than in other recent years. SMAs deserve a closer examination as active risk management tool in this age of uncertainty." We review this update below, and also excerpt from a Wells Fargo Securities piece on portfolio holdings and a Wells Fargo Asset Management piece on Prime and Muni MMFs.

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Crane Data was saddened to learn recently that the original money fund "guru," Bill Donoghue, passed away last month. Donoghue's Obituary explains, "William E. Donoghue, 75, of Seattle, Washington, died January 16, 2017 in Healdsburg, California. Donoghue was a respected author and investment expert best known for the growth of money market mutual funds, of which he raised awareness through newsletters, investment conferences, books, and television appearances." We excerpt from the obituary and reflect on our Peter Crane's relationship and history with Donoghue below.

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Crane Data released its February Money Fund Portfolio Holdings yesterday, and our latest collection of taxable money market securities, with data as of Jan. 31, 2017, shows declines in Repo and Treasuries, and increases in Agencies and CDs. Money market securities held by Taxable U.S. money funds overall (tracked by Crane Data) increased by $7.2 billion to $2.665 trillion last month, after decreasing by $34.7 billion in Dec., and increasing by $106.5 billion in November and $32.0 billion in Oct. Repo edged out Treasuries as the largest portfolio segment, though both fell following quarter-end. Agencies, which jumped, remained the third largest segment. CDs also rose and were in fourth place, followed by Commercial Paper, Other/Time Deposits and VRDNs. Below, we review our latest Money Fund Portfolio Holdings statistics. (Visit our Content center to download the latest files, or contact us if you'd like to see a sample of our latest Portfolio Holdings Reports.)

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The preliminary agenda is available and registrations are now being taken for Crane's Money Fund Symposium, which will take place June 21-23, 2017 at The Hyatt Regency Atlanta, in Atlanta, Ga. Money Fund Symposium is the largest gathering of money market fund managers and cash investors in the world. Last summer's event in Philadelphia attracted a record 575 attendees, and we expect another robust turnout for our 9th annual event in Atlanta this June. (Money Fund Symposium participants include money fund managers, marketers and servicers, cash investors, money market securities dealers, issuers, and regulators.) Visit the MF Symposium website at www.moneyfundsymposium.com) for more details. Registration for attendees is $750, and discounted hotel reservations are also now available. We review the agenda and conference details below. (E-mail us at info@cranedata.com to request the full brochure, or click here to download.) We also review the rest of Crane Data's 2017 conference calendar, including next month's Bond Fund Symposium.

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Crane Data's latest Money Fund Market Share rankings show modest asset decreases for the majority of U.S. money fund complexes in January, as total assets decreased by $43.2 billion, or -1.6%. Overall assets rose by $97.0 billion, or 3.7%, over the past 3 months. Over the past 12 months through Jan. 31, they've increased by $50.4 billion, or 1.9%. (Note: December's asset totals were inflated by the addition of $110 billion in "internal" money funds to our collections.) The biggest gainers in January were Northern, whose MMFs rose by $5.6 billion, or 6.2%, UBS, whose MMFs rose by $2.8 billion, or 7.3%, and Vanguard, whose MMFs rose by $2.1 billion, or 0.8%.

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The February issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Tuesday morning, features the articles: "Time for Prime Comeback Say MMF Managers; Rates Higher," which revisits the $1 trillion question: will investors return to Prime?; "Money Funds First (American) at US Bancorp A.M.," which "profiles" First American Funds' Jeff Plotnik and Eric Thole; and, "MF University Features Big Shift, New Frontiers in ’17," which reviews our latest "basic training" conference. We have updated our Money Fund Wisdom database query system with Jan. 31, 2017, performance statistics, and also sent out our MFI XLS spreadsheet Monday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our February Money Fund Portfolio Holdings are scheduled to ship Thursday, Feb. 9, and our Feb. Bond Fund Intelligence is scheduled to go out Tuesday, Feb. 14.

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BlackRock posted a new publication entitled, "The BlackRock Advantage: Cash Management Solutions for Institutions." The piece explains, "Over multiple interest rate cycles and varying market conditions, BlackRock has managed cash portfolios for corporations, banks, foundations, insurance companies and public funds. Today, we are one of the largest cash management providers in the world. As a leader in this asset class, BlackRock has U.S. $403.6 billion in global liquidity assets across multiple currencies. With one of the most experienced teams in the industry, BlackRock is able to offer clients an investment approach that has been tested through time and a variety of solutions designed to meet the needs of today's cash investor." We excerpt from this below, and we also review Federated's new "Month in Cash" and a Citi update on Treasury supply.

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