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Crane Data released its June Money Fund Portfolio Holdings Wednesday, and our latest collection of taxable money market securities, with data as of May 31, 2015, shows jumps in holdings of Other (Time Deposits), CD, Repo, and CP, and drops in holdings of Treasuries and Agencies. Money market securities held by Taxable U.S. money funds overall (those tracked by Crane Data) increased by $31.6 billion in May to $2.436 trillion, after dropping $49.3 billion in April, $19.2 billion in March, and $52.1 billion in February. Repos remained the largest portfolio segment, just ahead of CDs. Treasuries stayed in third place, followed by Commercial Paper. Agencies were fifth, followed by Other (mainly Time Deposits), then VRDNs. Money funds' European-affiliated securities represented 28.8% of holdings, down from 29.3% the previous month. Below, we review our latest Money Fund Portfolio Holdings statistics.

Among all taxable money funds, Repurchase agreements (repo) increased $10.7 billion (2.1%) to $527.5 billion, or 21.7% of assets, after decreasing $113.6 billion in April and increasing $98.7 billion in March. Certificates of Deposit (CDs) were up $10.8 billion (2.1%) to $524.1 billion, or 21.5% of assets, after rising $1.7 billion in April and dropping $37.4 billion in March. Treasury holdings decreased $4.2 billion (1.0%) to $408.8 billion, or 16.8% of assets, while Commercial Paper (CP) jumped $4.1 billion (1.1%) to $390.3 billion, or 16.0% of assets. Government Agency Debt decreased $3.2 billion (1.0%) to $331.6 billion, or 13.6% of assets. Other holdings, primarily Time Deposits, jumped $13.7 billion to $230.1 billion, or 9.4% of assets. VRDNs held by taxable funds decreased by $100 million to $23.5 billion (1.0% of assets).

Among Prime money funds, CDs still represent over one-third of holdings at 34.5% (up from 34.4% a month ago), followed by Commercial Paper at 25.7%. The CP totals are primarily Financial Company CP (15.1% of total holdings), with Asset-Backed CP making up 5.5% and Other CP (non-financial) making up 5.1%. Prime funds also hold 6.7% in Agencies (up from 6.5%), 4.2% in Treasury Debt (down from 5.0%), 4.7% in Other Instruments, and 5.8% in Other Notes. Prime money fund holdings tracked by Crane Data total $1.520 trillion (up from $1.492 trillion last month), or 62.4% of taxable money fund holdings' total of $2.436 trillion.

Government fund portfolio assets totaled $441 billion in May, the same as April, while Treasury money fund assets totaled $475 billion in May, down from $472 billion at the end of April. Government money fund portfolios were made up of 52.0% Agency Debt, 25.1% Government Agency Repo, 3.9% Treasury debt, and 18.1% in Treasury Repo. Treasury money funds were comprised of 69.1% Treasury debt, 30.1% Treasury Repo, and 0.8% in Government agency, repo and investment company shares. Government and Treasury funds combined total $916 billion, or 37.6% of all taxable money fund assets.

European-affiliated holdings rose $4.5 billion in May to $702.2 billion (among all taxable funds and including repos); their share of holdings fell to 28.8% from 29.0% the previous month. Eurozone-affiliated holdings decreased $400 million to $378.3 billion in May; they now account for 15.5% of overall taxable money fund holdings. Asia & Pacific related holdings increased by $5.3 billion to $291.4 billion (12.0% of the total). Americas related holdings increased $23.0 billion to $1.440 trillion, and now represent 59.1% of holdings.

The overall taxable fund Repo totals were made up of: Treasury Repurchase Agreements (up $20.0 billion to $273.6 billion, or 11.2% of assets), Government Agency Repurchase Agreements (down $9.2 billion to $164.8 billion, or 6.8% of total holdings), and Other Repurchase Agreements ($89.1 billion, or 3.7% of holdings, same as last month). The Commercial Paper totals were comprised of Financial Company Commercial Paper (up $2.8 billion to $228.8 billion, or 9.4% of assets), Asset Backed Commercial Paper (down $800 million to $83.8 billion, or 3.4%), and Other Commercial Paper (up $2.0 billion to $75.7 billion, or 3.2%).

The 20 largest Issuers to taxable money market funds as of May 31, 2015, include: the US Treasury ($408.8 billion, or 18.3%), Federal Home Loan Bank ($208.9B, 9.4%), Federal Reserve Bank of New York ($137.6B, 6.2%), Wells Fargo ($71.8B, 3.2%), Credit Agricole ($70.6B, 3.2%), BNP Paribas ($63.9B, 2.9%), JP Morgan ($60.4B, 2.7%), RBC ($58.8B, 2.6%), Bank of Nova Scotia ($57.4B, 2.6%), Bank of Tokyo-Mitsubishi UFJ Ltd ($55.5B, 2.5%), Bank of America ($52.2B, 2.3%), Federal Home Loan Mortgage Co. ($45.1B, 2.0%), Toronto-Dominion Bank ($43.9B, 2.0%), Natixis ($43.2B, 1.9%), Barclays PLC ($42.9B, 1.9%), Sumitomo Mitsui Banking Co ($42.3B, 1.9%), Federal Farm Credit Bank ($42.0B, 1.9%), Credit Suisse ($40.1B, 1.8%), Mizuho Corporate Bank Ltd. ($37.0B, 1.7%), DnB NOR Bank ASA, ($35.4B, 1.6%), and Bank of Montreal ($35.3B, 1.6%).

In the repo space, the Federal Reserve Bank of New York's RPP program issuance (held by MMFs) remained the largest program with $137.6B, or 26.1%, up from $106.2B a month ago. The 10 largest Fed Repo positions among MMFs on 5/31 include: JP Morgan US Govt ($16.1B), State Street Inst Lq Res ($8.5B), Morgan Stanley Inst Lq Govt ($7.7B), BlackRock Lq T-Fund ($6.4B), UBS Select Treas ($6.1B), JP Morgan US Trs Plus ($5.5B), First American Govt Oblg ($5.0B), Wells Fargo Adv Trs Plus ($4.6B), Schwab Govt MMkt ($4.2B), and Fidelity Cash Central Fund ($4.4B). The 10 largest Repo issuers (dealers) (with the amount of repo outstanding and market share among the money funds we track) include: Federal Reserve Bank of New York ($137.6B, 26.1%), Bank of America ($40.8B, 7.7%), BNP Paribas ($38.9B, 7.4%), Wells Fargo ($37.7B, 7.1%), Credit Agricole ($30.7B, 5.8%), JP Morgan ($29.5B, 5.6%), Societe Generale ($24.2B, 4.6%), Barclays PLC ($22.7B, 4.3%), Credit Suisse ($22.1B, 4.2%), and Citi ($21.1B, 4.0%).

The 10 largest issuers of "credit" -- CDs, CP and Other securities (including Time Deposits and Notes) combined -- include: Bank of Tokyo-Mitsubishi UFJ Ltd ($48.3B, 4.8%), Sumitomo Mitsui Banking Co ($42.3B, 4.2%), RBC ($41.5B, 4.1%), Bank of Nova Scotia ($40.1B, 3.9%), Credit Agricole ($39.9B, 3.9%), Toronto Dominion Bank ($37.2B, 3.7%), DnB NOR Bank ASA ($35.4B, 3.5%), Natixis ($35.3B, 3.5%), Wells Fargo ($34.0B, 3.4%), and Skandinaviska Enskilda Banken AB ($32.5B, 3.2%).

The 10 largest CD issuers include: Bank of Tokyo-Mitsubishi UFJ Ltd ($37.6B, 7.2%), Sumitomo Mitsui Banking Co ($35.2B, 6.7%), Toronto-Dominion Bank ($33.5B, 6.4%), Mizuho Corporate Bank Ltd ($30.6B, 5.9%), Bank of Montreal ($28.8B, 5.5%), Bank of Nova Scotia ($28.3B, 5.4%), Wells Fargo ($25.1B, 4.8%), RBC ($21.5B, 4.1%), Natixis ($19.2B, 3.7%), and Sumitomo Mitsui Trust Bank ($18.5B, 3.5%).

The 10 largest CP issuers (we include affiliated ABCP programs) include: JP Morgan ($22.3B, 6.8%), Commonwealth Bank of Australia ($17.2B, 5.3%), Westpac Banking Co ($17.2B, 5.3%), RBC ($15.7B, 4.8%), National Australia Bank Ltd ($12.0B, 3.7%), Lloyds TSB Bank PLC ($12.0B, 3.7%), BNP Paribas ($11.4B, 3.5%), Bank of Nova Scotia ($10.9B, 3.3%), HSBC ($10.6B, 3.3%), and Australia & New Zealand Banking Group Ltd ($9.4B, 2.9%).

The largest increases among Issuers include: Federal Reserve Bank of New York (up $31.5B to $137.6B), Skandinaviska Enskilda Banken AB (up $6.2B to $32.5B), ING Bank (up $4.1B to $27.8B), Swedbank AB (up $3.9B to $22.4B), Federal Home Loan Bank (up $3.7B to $208.9B), DnB NOR Bank ASA (up $3.4B to $35.4B), Canadian Imperial Bank of Commerce (up $3.4B to $20.6B), Goldman Sachs (up $2.8B to $14.0B), Lloyds TSB Bank PLC (up $2.8B to $25.1B), and RBC (up $2.6B to $58.8B). The largest decreases among Issuers of money market securities (including Repo) in May were shown by: Barclays PLC (down $7.6B to $42.9B), Bank of America (down $4.7B to $52.2B), Federal Home Loan Mortgage Co. (down $4.4B to $45.1B), US Treasury (down $4.2B to $408.8B), BNP Paribas (down $3.4B to $63.9B), Standard Chartered Bank (down $2.3B to $14.6B), Federal National Mortgage Association (down $2.0B to $32.2B), Citi (down $1.9B to $29.5B), Credit Mutuel (down $1.3B to $19.0B), and FMS Wertmanagement (down $900M to $8.4B).

The United States remained the largest segment of country-affiliations; it represents 49.1% of holdings, or $1.199 trillion (up $13B). France (9.9%, $240.7B) remained in second, followed by Canada (9.8%, $238.8B), and Japan (7.4%, $181.3B). The U.K. (5.1%, $124.2B) moved up to fifth, while Sweden (4.3%, $104.2B) was sixth. Australia (3.6%, $86.8B), The Netherlands (3.1%, $74.7B), Switzerland (2.5%, $60.1B), and Germany (2.0%, $49.4B) round out the top 10 among country affiliations. (Note: Crane Data attributes Treasury and Government repo to the dealer's parent country of origin, though money funds themselves "look-through" and consider these U.S. government securities. All money market securities must be U.S. dollar-denominated.)

As of May 31, 2015, Taxable money funds held 27.3% of their assets in securities maturing Overnight, and another 13.8% maturing in 2-7 days (41.1% total matures in 1-7 days). Another 22.1% matures in 8-30 days, while 12.2% matures in 31-60 days. Note that three-quarters, or 75.4% of securities, mature in 60 days or less, the dividing line for use of amortized cost accounting under the new pending SEC regulations. The next bucket, 61-90 days, holds 11.5% of taxable securities, while 10.5% matures in 91-180 days and just 2.7% matures beyond 180 days.

Crane Data's Taxable MF Portfolio Holdings (and Money Fund Portfolio Laboratory) were updated yesterday, and our MFI International "offshore" Portfolio Holdings and Tax Exempt MF Holdings will be released late this week. Visit our Content center to download files or visit our Portfolio Laboratory to access our "transparency" module. Contact us if you'd like to see a sample of our latest Portfolio Holdings Reports or our new "Holdings Reports Funds Module." The new file allows user to choose funds (pick a fund then click its ticker) and show Performance alongside Composition, Country breakout, Largest Holdings and Fund Information.

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Consulting Services News

Feb 19
 

Register soon for the third annual Crane's Bond Fund Symposium, which will take place March 25-26, 2019 at the Loews Philadelphia Hotel. Our second ultra-short event last year in Los Angeles attracted over 120 bond fund managers, marketers, fixed-income issuers, investors and service providers, and we expect our Philadelphia show to be even bigger. See our latest agenda here and details below. Bond Fund Symposium offers a concentrated and affordable educational experience, as well as an excellent and informal networking venue. Registration for BFS is $750; exhibit space is $2,000 (includes 2 tickets); and sponsorship opportunities are $3K, $4K, $5K, and $6K. Our mission is to deliver the best possible conference content at a reasonable price to bond fund professionals and investors. Portfolio managers, analysts, investors, issuers, service providers, and anyone interested in expanding their knowledge of bond funds and fixed-income investing will benefit from our comprehensive program. A block of rooms has been reserved at the Loews Philadelphia. We'd like to thank our sponsors -- Wells Fargo Securities, Fidelity Investments, Investortools, J.P. Morgan Asset Management, Wells Fargo Asset Management, Invesco, S&P Global Ratings, DTCC and INTL FCStone -- for their support (we're still accepting sponsors for our 2019 show). E-mail us for more details. Crane Data is also making preparations and now accepting registrations for our "big show," `Money Fund Symposium, which will be held June 24-26, 2019, at the Renaissance Boston in Boston, Mass. See the latest agenda at www.moneyfundsymposium.com and let us know if you'd like more details on sponsoring this event. We have also set the dates and location for our next European Money Fund Symposium, which is scheduled for Sept. 23-24, 2019, in Dublin, Ireland. Watch for this agenda to go live in coming weeks.... We hope to see you in Philly, Boston or Dublin in 2019!

Feb 07
 

The February issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Thursday morning, features the articles: "Green Money Funds Become a Thing, But Big Issues Remain," which looks at BlackRock's pending LEAF launch and issues involving ESG money funds; "Schwab's Marie Chandoha Reflects; Preserving Retail," a Q&A featuring the CEO of Charles Schwab Investment Management; and, "MF University '19 Highlights Asset Recovery, Rising Rates," which reviews our recent "basic training" event in Stamford. We've also updated our Money Fund Wisdom database with Jan. 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 February Money Fund Portfolio Holdings are scheduled to ship on Monday, February 11, and our February Bond Fund Intelligence is scheduled to go out Thursday, February 14.

MFI's "Green Money Funds," article says, "A second money-fund provider is introducing a fund that seeks to meet goals related to environmental issues, in addition to meeting the traditional tenets of preserving safety, liquidity and yield. BlackRock joins DWS, which converted its Variable NAV MMF to an ESG product last summer, in launching a "green" money fund, BlackRock Liquid Environmentally Aware Fund (LEAF)."

It continues, "Meanwhile, State Street Global Advisors' '2019 Global Cash Outlook' cites a number of problems with the concept of an ESG money fund. (See our Feb. 4 News, 'SSGA's 2019 Global Cash Outlook Discusses ESG MMF Challenges, Tech, AI.') SSGA's Pia McCusker says, 'In this year's ... Outlook, we consider innovations in cash management. We look at the potential for filtering cash investments for ESG factors, while satisfying the safety, liquidity, yield and regulatory demands of money market fund management. We also examine emerging trends, including artificial intelligence in cash management and a Fed initiative that could lead to deadline-free, 24-hour money market funds."

Our Schwab "Profile", reads, "This month, MFI interviews Charles Schwab Investment Management CEO Marie Chandoha, who will be stepping down at the end of March 2019. We wanted to ask Chandoha to look back at her tenure at Schwab, which included the extended post-crisis stretch of zero yields, and to get some parting words of wisdom. She tells us about her 'crash course' in cash, the struggle against more onerous money fund reforms and a number of other issues. Our discussion follows."

MFI says, "Talk about your decision to retire." Chandoha responds, "I've been in the business for 35 years and have had a really great run. I've loved being in the industry, but now it's time for my next chapter.... I'm going to spend a little more time with my family and do some traveling. But I also still love the industry. I just want to interface with it in a different way [going forward by] serving on boards."

MFI also asks for "a little history on CSIM." Chandoha tells us, "CSIM has been around for almost 30 years. We actually got started with our money funds, and our very first hire was ... Linda Klingman who [now] heads up our money fund portfolio management. So, it's been a very important business for us from the very beginning.... When I think about our money fund team, we have a diverse group.... For example, Lynn Paschen heads up our Government money fund area, [so there is] definitely a good contingent of women and other diverse individuals."

Next, our Money Fund University recap explains, "Crane Data recently hosted its 9th annual Money Fund University in Stamford, Conn. The 'basic training' event, targeted at those new to the money fund industry, featured primers on interest rates, money market securities, the Federal Reserve, ratings, portfolio management, and money fund regulations. The big themes this year were the comeback of money fund yields and assets, the growth in ultra-short bonds and 'alt-cash,' and regulatory reform in Europe."

MFI includes the sidebar, "Ed Jones Shifts Sweeps." It notes that "Brokerage Edward Jones announced plans to alter its sweep program, and money market funds will no longer be made available to new investors on or after Feb. 9. In a letter entitled, 'Required Notice to All Clients: Cash Management Option Changes,' they explain that the restriction also applies to current investors who 'have not selected the fund as your sweep option for your brokerage [​or retirement] account as of that date.' They 'will no longer be able to do so.'"

Another sidebar, "Not Done Yet: EU Reforms," explains, "European money market funds continue to change fund types and tweak lineups ahead of the revised March 21 deadline for regulatory reforms. (See yesterday's News.) The latest fund managers to announce changes or compliance schedules are Deutsche, Fidelity and UBS. A number of firms have already converted their money funds to be compliant with the pending reforms, including Aviva (9/1/18), BNP Paribas (11/11/18), JP Morgan (11/30/18), BlackRock, Federated, SSGA (all 1/11/19), Morgan Stanley and UBS (both 1/14/19)."

Our February MFI XLS, with Jan. 31, 2019, data, shows total assets rising $14.4 billion in January to $3.227 trillion, after increasing $41.9 billion in December, $64.3 billion in November, and $34.5 billion in October. Our broad Crane Money Fund Average 7-Day Yield rose 3 bps to 2.06% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 1 bp to 2.24% (its highest level since Oct. 2008).

On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA rose 3 bps to 2.50% and the Crane 100 rose to 2.51%. Charged Expenses averaged 0.44% (up 1 bp) and 0.27% (unchanged), respectively for the Crane MFA and Crane 100. The average WAM (weighted average maturity) for the Crane MFA and Crane 100 was 29 and 29 days, respectively (up 1 day and unch.). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

Jan 24
 

This month, MFI interviews Jim Palmer, CIO of Minneapolis-based U.S. Bancorp Asset Management (USBAM), which manages the First American Funds, Inc. First American, the 14th largest money fund manager, is one of the few investment advisers focusing solely on cash and investment-grade fixed income. USBAM manages 34 money funds with $58.2 billion (as of 12/31/18), according to Crane Data. We discuss the fund manager's outlook for 2019, the Fed, SMAs and a number of other topics below. Our Q&A follows. (Note: The following is reprinted from the January issue of Money Fund Intelligence, which was published on Jan. 8. Contact us at info@cranedata.com to request the full issue.)

MFI: Tell us about your team. Palmer: I am the Chief Investment Officer of U.S. Bancorp Asset Management, which is a dedicated investment-grade, fixed-income manager. We have over $83 billion in assets under management as of the end of November 2018. We focus on three primary business lines. We are the investment adviser to the First American family of money market funds. We have a book of investment-grade, fixed-income SMA portfolios. Typically, these portfolios have maturity limits of five years and under, but we do have strategies going out to 15 years. We also manage the collateral reinvestment for the securities lending program. We run both taxable and tax efficient strategies.

MFI: What are your big issues for 2019? Palmer: From an investment standpoint, I think [the biggest is] accurately predicting Fed rate changes for 2019, which we believe will be far less telegraphed than in the recent past. Obviously, making accurate predictions around what the Fed will do is crucial for money market fund and SMA absolute performance as well as for relative performance versus peers. We believe predicting the Fed will be more challenging this year for a couple of reasons. One, the Fed will be holding live press conferences at each meeting going forward, implying each meeting is live for a policy rate adjustment. Whereas [in] 2018, it was well signaled and accepted that at every other meeting we would be getting a rate hike.

I'd also say the economic and financial market outlook is far more uncertain in 2019 than in 2018, which implies we may or may not be approaching the end of the rate hike cycle and the end of quantitative tightening. [So] the next policy adjustment will be more uncertain than it has been in the past. If you looked at 2018, certainly the direction was that rates were going up. Today, there are opinions suggesting the Fed should stop or perhaps even begin cutting rates in the coming year, even while the Fed's Dot Plot looks for two 2019 rate hikes.

MFI: What about managing late cycle credit risk? Palmer: With the solid economic growth we've seen, it has been a fairly supportive environment for credit, particularly financial credit. But we are clearly coming toward the end of the credit cycle and leverage has been increasing, especially in the industrial sector. That said, we still believe the highly-rated banks and financial credits which typically make up the majority of Prime fund investments are comfortably within minimal credit risk standards based on their fundamentals and strong capital and liquidity metrics. We look for most of the credit stress to be in the triple-B type names. Issuers you would find more in SMA or short fixed-income portfolios than in the higher quality Prime money market funds. I think every investment manager is sharpening their credit work to make sure they understand the direction and risks of the overall credit markets and in their Prime fund holdings as well.

MFI: What are the major issues from a business standpoint? Palmer: The money market fund industry is almost assuredly going to face greater competition for shareholder balances from increased U.S. Treasury issuance, particularly in T-bills. With growing federal budget deficits, all that new debt will require funding, and it's going to represent a real competitive headwind for money market fund asset growth. But from a supply and demand standpoint, all that new issuance should help push money fund yields up too. One tailwind for industry growth should be higher yields making money funds a more attractive asset class. Certainly, cash yielding over 2 percent is a far more viable investment option than during the days of ZIRP. Given the market volatility we have been experiencing, the concept of holding cash seems to be gaining more steam in the broad media and marketplace as a source of adequate return for your money, especially if you are in a defensive mode.

MFI: Is cash taking market share? Palmer: Right now, it is probably a little of both [stocks and bonds]. I think money funds are a great store of value if you are looking to preserve principal. So I think cash is probably reaping the benefits of the recent market turmoil.

MFI: What about Prime/Govt spreads? Palmer: Currently, the spread between Prime funds and Treasury and Government funds is around 20 basis points. I think that is probably a reasonable range going forward. I suspect any uptick in T-bill yields from the amount of forecasted Treasury issuance will offset any marginal increase you might see in bank spreads for shorter term bank paper. So I don't see much movement. I suspect the difference between Treasury and repo funds and Government and repo funds will basically be negligible going forward.

Right now, Treasury funds are actually out-yielding Government funds despite the perceived difference in credit quality. In the current environment, the yield advantage is probably driven by the different composition of floating-rate securities.... However, the difference between repo rates on Treasury versus agency collateral has shrunk to a basis point or two at best. Also, there is a greater amount of Treasury-backed repo in Government funds, which blurs the difference between the two funds.

MFI: Can you talk more about the Fed? Palmer: Sure. Looking back a few months, we expected, as most market observers did, that the Fed would raise rates in December. We have also been consistently taking the 'under' versus the Fed's Dot Plot which had been suggesting three 2019 rate hikes. We were in the 'one or two' camp and will probably remain there, with a bias leaning toward one 2019 rate hike right now. On the balance sheet, the Fed certainly seems adamant about shrinking its securities holdings. [But] I do think Chairman Powell's comments that quantitative tightening may be more on autopilot was really just a verbal gaffe, which is already being dialed back by Fed officials. In the end, I think the Fed will re-evaluate the pace of quantitative tightening and perhaps take measures to reduce the maximum monthly balance sheet reduction, if for no other reason than to let investors know they are observing and aware of current market conditions and are not restricted by their models.

MFI: Tell us about your SMA portfolios. Palmer: USBAM's SMA assets under management at the end of November 2018 were about a third of our money fund assets, so it is a significant but smaller portion of our overall business. The SMA assets are longer-term portfolios, which vary anywhere from enhanced cash to portfolios with durations out to four years. Many SMA portfolios invest in triple-B credits as well, though we do not manage any high-yield strategies. The dynamics for SMA portfolios are a little different than money market funds. We think repatriation and the tax code changes impacted the SMA business more so than money market funds. The late 2017 tax code changes caused companies to become more conservative and more liquid with their cash.... So, I think companies were prudently being more conservative, especially when you consider the opportunity cost for holding cash was much lower as the Fed raised rates. Then late in the year you saw volatility in the marketplace which made cash an even more attractive opportunity.

MFI: Do investors use SMAs in tandem with money funds? Palmer: Absolutely, combining money market funds and SMA portfolios is a core strategy for many large companies. These companies first invest a significant portion of their operating cash in highly liquid instruments such as money market funds and bank deposits to meet their day-to-day business needs. SMA portfolios play a role when these companies have large excess cash balances which may not be needed for an extended period, probably measured in years.

MFI: Talk about communications. Palmer: Our investors have access to our investment team to discuss markets and our strategies, but we also produce a fair amount of market commentary. We have just started posting weekly blogs on our USBAM website, which will help distribute our views not only on current market dynamics, but also on basic market fundamentals, investment terms and a little history as well. I write commentaries on a quarterly and monthly basis, which go a bit more into detail on the strategic thinking driving our portfolio decisions. Our credit analysts also produce commentaries on topical issues. There is no question as to the importance of investment advisers producing relevant content and education. We certainly have increased the amount of value-added content we produce for our clients and shareholders.

MFI: What about investment philosophy? Palmer: We seek to add excess returns utilizing yield-curve positioning, duration management, sector allocation and security selection. We consider ourselves to be an unbiased manager among these strategies as each may represent greater relative value in any given market cycle. Core to all our investment strategies is portfolio and sector diversification along with a strong focus on fundamental credit research. Those fundamentals are crucial in all markets, but are particularly important in periods of increased market volatility and as we approach the late stages of a credit cycle.

Jan 17
 

Crane's Money Fund Symposium, the largest gathering of money market fund managers and cash investors in the world, will take place June 24-26, 2019 at The Renaissance Boston Waterfront Hotel, in Boston, Mass. The preliminary agenda is now available and registrations are now being taken. Our previous MFS in Pittsburgh attracted 575 attendees, and we expect another record turnout for our 11th annual event in Boston this summer. Money Fund Symposium attracts money fund managers, marketers and servicers, cash investors, money market securities dealers, issuers, and regulators. We review the agenda, as well as Crane Data's 2019 conference calendar, below. (Welcome to those of you attending Crane's Money Fund University, which starts today in Stamford, Conn., and runs through Friday. Attendees and Crane Data subscribers may access our conference materials at the bottom of our "Content" page or our via our Money Fund University 2019 Download Center. Feel free to drop by!)

Our June 24 Symposium Opening (afternoon) Agenda kicks off with a "Welcome to Money Fund Symposium 2019" and keynote on "Money Funds, Cash Comeback" from Peter Crane, President of Crane Data. The rest of the Day 1 agenda includes: "The State of the Money Fund Industry & MMFs," with Crane, Yeng Butler of SSgA, and Alex Roever of J.P. Morgan Securities; "Risks & Ratings: Credit Liquidity, & NAV Moves," with Robert Callagy from Moody's Investors Service, Greg Fayvilevich from Fitch Ratings, and Guyna Johnson from S&P Global Ratings; and, a "Major Money Fund Issues 2019" panel with Tracy Hopkins of Dreyfus/BNY Mellon Cash Investment Strategies, Jeff Weaver of Wells Fargo Asset Management, and Peter Yi of Northern Trust Asset Management. (The evening's reception is sponsored by Bank of America Merrill Lynch.)

Day 2 of Money Fund Symposium 2019 begins with "Strategists Speak '18: Fed & Rates, Repo & SOFR," which features Mark Cabana of Bank of America, Joseph Abate of Barclays, and Chris Chadie of Credit Suisse, followed by a "Senior Portfolio Manager Perspectives" panel, including Laurie Brignac of Invesco, Deborah Cunningham of Federated Investors, and Nafis Smith of Vanguard Group. Next up is "Government & Treasury Money Fund Issues," with moderator Priya Misra of TD Securities, Adam Ackerman of J.P. Morgan Asset Management, and Ed Dombrowski of AB Funds. The morning concludes with "Muni & Tax Exempt Money Fund Update," featuring Colleen Meehan of Dreyfus, Sean Saroya of J.P. Morgan Securities, and John Vetter of Fidelity.

The Afternoon of Day 2 (after a Dreyfus-sponsored lunch) features the segments: "Dealer's Choice: Supply, New Securities & CP" with Stewart Cutler of Barclays, John Kodweis of J.P. Morgan Securities, and Nick Ro of Toyota Financial Services; "Analysts Roundtable: Concerns in Credit" with Jimmie Irby of J.P. Morgan AM, Keith Lawler of Bank of America Merrill Lynch, and Matthew Plomin of DWS; "SMA & Ultra-Short Update; Bond Fund Regs," with Dave Martucci of JPMAM, Kerry Pope of Fidelity, and Steve Cohen of Dechert. The day’s wrap-up presentation is "Corporate Liquidity & Investor Issues" involving Lance Pan of Capital Advisors and Tom Hunt from AFP. (The Day 2 reception is sponsored by Barclays.)

The third day of the Symposium features the sessions: "Treasury & NY Fed Update; Agency Issuance" with Tom Katzenbach from the U.S. Dept. of Treasury, Dave Messerly of the FHLBanks - Office of Finance, and Josh Frost of the Federal Reserve Bank of NY; "European Money Funds After Reforms," with Kim Hochfield of Morgan Stanley Investment Management and Dan Morrissey of William Fry; and concludes with "Brokerage Sweep: Deposits vs. Money Funds" with Rick Holland of Charles Schwab Investment Management, Joe Hooker of Promontory Interfinancial Network and Tuyen Tu of Raymond James; then "Technology, Software & Data in Money Funds" ends the program with Peter Crane and Greg Fortuna of State Street Fund Connect.

Visit the MF Symposium website at www.moneyfundsymposium.com) for more details. Registration is $750, and discounted hotel reservations are available. We hope you'll join us in Boston this June! We'd like to encourage attendees, speakers and sponsors to register and make hotel reservations early. Note that a couple of our speakers have yet to confirm their participation, and the agenda is still in the process of being finalized. E-mail us at info@cranedata.com to request the full brochure, or click here to see the latest.

In other conference news, preparations are being made for the third annual Crane's Bond Fund Symposium, which will be held at the Loews Philadelphia Hotel March 25-26. (Click here to see the PDF agenda.) Bond Fund Symposium is the first conference devoted entirely to bond mutual funds, bringing together bond fund managers, marketers, and professionals with fixed-income issuers, investors and service providers. The majority of the content is aimed at the growing ultra-short and conservative ultra-short bond fund marketplace. (As a reminder, please register for BFS and make hotel reservations for BFS soon if you plan on attending!)

Crane Data, which recently celebrated the fourth anniversary of its Bond Fund Intelligence publication and BFI XLS bond fund information service and benchmarks, continues to expand its fixed income fund offerings with the recent launch of Bond Fund Wisdom product and Bond Fund Portfolio Holdings dataset. Bond Fund Symposium offers attendees a concentrated and affordable educational experience, as well as an excellent networking venue. Registration for Bond Fund Symposium is $750; exhibit space is $2,000 (includes 2 tickets); and sponsorship opportunities are $3K, $4K, $5K and $6K. Our mission is to deliver the best possible conference content at an affordable price to bond fund professionals and investors.

Finally, mark your calendars for Crane's 7th annual "offshore" money fund event, European Money Fund Symposium, which will be held in Dublin, Ireland, September 23-24, 2019. This website (www.euromfs.com) will be updated with the 2019 information soon. (Contact us to inquire about sponsoring or speaking.)