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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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Dec 11
 

Crane Data released its December Money Fund Portfolio Holdings Tuesday, and our most recent collection, with data as of Nov. 30, 2019, shows a big increase in Treasuries and another drop in Repo. Money market securities held by Taxable U.S. money funds (tracked by Crane Data) increased by $20.8 billion to $3.786 trillion last month, after increasing $75.8 billion in October, $92.6 billion in September and $93.0 billion in August. Repo continues to be the largest portfolio segment closely followed by Treasury securities, then Agencies. CP remained fourth ahead of CDs, 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 to see our latest Portfolio Holdings reports.)

Among taxable money funds, Repurchase Agreements (repo) fell by $35.2 billion (-3.0%) to $1.158 trillion, or 30.6% of holdings, after decreasing $24.7 billion in October and $76.8 billion in September but increasing $20.5 billion in August. Treasury securities rose $55.3 billion (5.2%) to $1.126 trillion, or 29.7% of holdings, after increasing $30.2 billion in October, $134.7 billion in September and $89.8 billion in August. Government Agency Debt decreased by $19.2 billion (-2.4%) to $765.8 billion, or 20.2% of holdings, after increasing $39.4 billion in October and $39.2 billion in September but decreasing $9.9 billion in August. Repo, Treasuries and Agencies totaled $3.050 trillion, representing a massive 80.6% of all taxable holdings.

Money funds' holdings of CP, CD and Other (mainly Time Deposits) securities all rose in November. Commercial Paper (CP) increased $5.1 billion (1.5%) to $346.9 billion, or 9.2% of holdings, after increasing $13.9 billion in October and $7.4 billion in September but decreasing $15 billion in August. Certificates of Deposit (CDs) rose by $12.6 billion (4.8%) to $275.2 billion, or 7.3% of taxable assets, after increasing $12.6 billion in October, decreasing $7.5 billion in September and increasing $4.5 billion in August. Other holdings, primarily Time Deposits, increased $2.3 billion (2.2%) to $107.0 billion, or 2.8% of holdings, after increasing $5.0 billion in October, decreasing $4.6 billion in September and increasing $3.4 billion in August. VRDNs dropped to $6.7 billion, or 0.2% of assets. (Note: This total is VRDNs for taxable funds only. We will publish Tax Exempt MMF holdings separately late Wednesday.)

Prime money fund assets tracked by Crane Data increased $14 billion to $1.093 trillion, or 28.9% of taxable money funds' $3.786 trillion total. Among Prime money funds, CDs represent 25.2% (up from 24.3% a month ago), while Commercial Paper accounted for 31.7% (down from 31.9%). The CP totals are comprised of: Financial Company CP, which makes up 20.2% of total holdings, Asset-Backed CP, which accounts for 6.5%, and Non-Financial Company CP, which makes up 5.0%. Prime funds also hold 5.7% in US Govt Agency Debt, 10.5% in US Treasury Debt, 6.5% in US Treasury Repo, 1.3% in Other Instruments, 5.9% in Non-Negotiable Time Deposits, 4.9% in Other Repo, 5.4% in US Government Agency Repo and 0.5% in VRDNs.

Government money fund portfolios totaled $1.829 trillion (48.3% of all MMF assets), down $4.0 billion from $1.833 trillion in October, while Treasury money fund assets totaled another $864 billion (22.8%), up from $853 billion the prior month. Government money fund portfolios were made up of 38.5% US Govt Agency Debt, 18.9% US Government Agency Repo, 20.5% US Treasury debt and 21.9% in US Treasury Repo. Treasury money funds were comprised of 73.7% US Treasury debt, 26.2% in US Treasury Repo, and 0.0% in Government agency repo, Other Instrument, and Investment Company shares. Government and Treasury funds combined now total $2.693 trillion, or 71.1% of all taxable money fund assets.

European-affiliated holdings (including repo) fell by $17.5 billion in November to $694.0 billion; their share of holdings fell to 18.3% from last month's 18.9%. Eurozone-affiliated holdings fell to $461.4 billion from last month's $488.0 billion; they account for 12.2% of overall taxable money fund holdings. Asia & Pacific related holdings rose by $11.1 billion to $362.9 billion (9.6% of the total). Americas related holdings rose $25.0 billion to $2.724 trillion and now represent 72.0% of holdings.

The overall taxable fund Repo totals were made up of: US Treasury Repurchase Agreements (up $9.1 billion, or 1.3%, to $698.8 billion, or 18.5% of assets); US Government Agency Repurchase Agreements (down $41.4 billion, or -9.2%, to $406.0 billion, or 10.7% of total holdings), and Other Repurchase Agreements (down $3.0 billion, or -5.4%, from last month to $53.3 billion, or 1.4% of holdings). The Commercial Paper totals were comprised of Financial Company Commercial Paper (down $0.7 billion to $221.2 billion, or 5.8% of assets), Asset Backed Commercial Paper (up $2.6 billion to $71.4 billion, or 1.9%), and Non-Financial Company Commercial Paper (up $3.3 billion to $54.3 billion, or 1.4%).

The 20 largest Issuers to taxable money market funds as of Nov. 30, 2019, include: the US Treasury ($1,126.3 billion, or 29.7%), Federal Home Loan Bank ($596.6B, 15.0%), Fixed Income Clearing Co ($140.2B, 3.7%), RBC ($134.9B, 3.6%), BNP Paribas ($104.7B, 2.8%), Federal Farm Credit Bank ($87.0B, 2.3%), JP Morgan ($83.8B, 2.2%), Mitsubishi UFJ Financial Group Inc ($83.6B, 2.2%), Federal Home Loan Mortgage Co ($80.3B, 2.1%), Credit Agricole ($77.7B, 2.1%), Wells Fargo ($72.5B, 1.9%), Barclays ($66.6B, 1.8%), Sumitomo Mitsui Banking Co ($61.7B, 1.6%), Bank of America ($52.5B, 1.4%), Societe Generale ($52.2B, 1.4%), Natixis ($49.6B, 1.3%), Bank of Montreal ($49.4B, 1.3%), Toronto-Dominion Bank ($46.0B, 1.2%), Canadian Imperial Bank of Commerce ($46.0B, 1.2%) and Bank of Nova Scotia ($44.4B, 1.2%).

In the repo space, the 10 largest Repo counterparties (dealers) with the amount of repo outstanding and market share (among the money funds we track) include: Fixed Income Clearing Co ($140.2B, 12.1%), RBC ($102.3B, 8.8%), BNP Paribas ($93.3B, 8.1%), JP Morgan ($71.4B, 6.2%), Wells Fargo ($59.1B, 5.1%), Credit Agricole ($56.8B, 4.9%), Barclays ($55.4B, 4.8%), Mitsubishi UFJ Financial Group ($53.7B, 4.6%), Bank of America ($45.7B, 3.9%) and Societe Generale ($42.2B, 3.6%). Fed Repo positions among MMFs on 11/30/19 include just one fund, Goldman Sachs FS Govt ($0.5B).

The 10 largest issuers of "credit" -- CDs, CP and Other securities (including Time Deposits and Notes) combined -- include: Toronto-Dominion Bank $33.0B, 5.3%), RBC ($32.5B, 5.2%), Mitsubishi UFJ Financial Group Inc ($29.9B, 4.8%), Credit Suisse ($28.3B, 4.5%), Bank of Nova Scotia ($24.8B, 4.0%), Sumitomo Mitsui Banking Co ($21.8B, 3.5%), Credit Agricole ($20.9B, 3.3%), Canadian Imperial Bank of Commerce ($19.2B, 3.1%), Bank of Montreal ($18.6B, 3.0%) and Australia & New Zealand Banking Group ($18.4B, 2.9%).

The 10 largest CD issuers include: Mitsubishi UFJ Financial Group Inc ($22.5B, 8.2%), Sumitomo Mitsui Banking Co ($16.7B, 6.1%), Bank of Montreal ($16.0B, 5.8%), Toronto-Dominion Bank ($14.5B, 5.3%), Mizuho Corporate Bank ($14.0B, 5.1%), Wells Fargo ($13.1B, 4.8%), Credit Suisse ($10.7B, 3.9%), Sumitomo Mitsui Trust Bank ($10.0B, 3.6%), Landesbank Baden-Wurttemberg ($9.8B, 3.6%) and Bank of Nova Scotia ($9.5B, 3.5%).

The 10 largest CP issuers (we include affiliated ABCP programs) include: RBC ($22.1B, 7.6%), Toronto-Dominion Bank ($17.2B, 5.9%), Credit Suisse ($17.1B, 5.9%), Bank of Nova Scotia ($14.6B, 5.0%), JP Morgan ($12.4B, 4.2%), National Australia Bank Ltd ($9.6B, 3.3%), Toyota ($9.0B, 3.1%), Societe Generale ($8.8B, 3.0%), DBS Bank ($8.5B, 2.9%) and BNP Paribas ($8.2B, 2.8)%.

The largest increases among Issuers include: US Treasury (up $55.3B to $1,126.3B), RBC (up $25.8B to $134.9B), Canadian Imperial Bank of Commerce (up $9.0B to $46.0B), Goldman Sachs (up $6.1B to $24.4B), Mitsubishi UFJ Financial Group (up $5.8B to $83.6B), Bank of Montreal (up $5.4B to $49.4B), Natixis (up $5.1B to $49.6B), Credit Agricole (up $4.9B to $77.7B), Sumitomo Mitsui Banking Co (up $3.7B to $61.7B) and Federal Farm Credit Bank (up $3.6B to $87.0B).

The largest decreases among Issuers of money market securities (including Repo) in Nov. were shown by: BNP Paribas (down $28.0B to $104.7B), Fixed Income Clearing Co (down $25.6B to $140.2B), Federal Home Loan Bank (down $13.3B to $569.6B), Wells Fargo (down $9.4B to $72.5B), Federal Home Loan Mortgage Co (down $5.9B to $80.3B), Societe Generale (down $4.8B to $52.2B), Federal National Mortgage Association (down $3.8B to $23.1B), Citi (down $3.2B to $33.3B), Commonwealth Bank of Australia (down $1.6B to $9.3B) and Daiwa Securities Group (down $1.5B to $10.1B).

The United States remained the largest segment of country-affiliations; it represents 63.0% of holdings, or $2.384 trillion. Canada (9.0%, $339.3B) was number two, and France (8.1%, $306.8B) was third. Japan (7.5%, $281.9B) occupied fourth place. The United Kingdom (3.6%, $134.3B) remained in fifth place. Germany (2.0%, $75.9B) was in sixth place, followed by The Netherlands (1.8%, $67.1B), Australia (1.5%, $56.7B), Sweden (1.1%, $41.3B) and Switzerland (1.1%, $40.4B). (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 Nov. 30, 2019, Taxable money funds held 34.0% (down from 36.4%) of their assets in securities maturing Overnight, and another 15.9% maturing in 2-7 days (up from 14.8% last month). Thus, 49.8% in total matures in 1-7 days. Another 15.6% matures in 8-30 days, while 12.4% matures in 31-60 days. Note that over three-quarters, or 77.8% of securities, mature in 60 days or less (down slightly from last month), the dividing line for use of amortized cost accounting under SEC regulations. The next bucket, 61-90 days, holds 9.3% of taxable securities, while 10.2% matures in 91-180 days, and just 2.7% matures beyond 181 days.

Dec 06
 

The December issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "MMF Assets Kill It in 2019; Signs of Slowdown in '20?," which discusses torrid but slowing money fund asset growth; "Cavanal Hill's Kitchen: There Will Be Yield," which profiles VP & Senior Money Market Portfolio Manager Mike Kitchen; and, "Dreyfus 'Impact' Govt MMF Opens Social Front vs. ESG," which discusses the newest breed of social money funds. We've also updated our Money Fund Wisdom database with Nov. 30 statistics, and sent out our MFI XLS spreadsheet Friday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our December Money Fund Portfolio Holdings are scheduled to ship on Tuesday, Dec. 10, and our Dec. Bond Fund Intelligence is scheduled to go out Friday, Dec. 13.

MFI's "MMF Assets Kill It" article says, "Money fund assets moved higher again in November, and they're on pace to have their best year in a decade. But there are signs of a slowdown, and flat to lower rates in 2020 should begin tempering 2019's smoking inflow pace. Instead of 20% returns like we've seen this year, we should be lucky to get 10% in '20."

It continues, "Crane Data shows money fund assets increasing by $40.9 billion in November to $3.918 trillion, following gains of about $80 billion the previous 4 months in a row. While we've still got a shot at breaking $4.0 trillion by year end, it'll take a big December to do it."

Our "Cavanal Hill" piece reads, "This month, MFI interviews Cavanal Hill Investment Management VP & Senior Money Market Portfolio Manager Mike Kitchen, who runs Cavanal Hill's Government Securities Money Market Fund and U.S. Treasury Fund, Senior Tax Free Fixed Income Manager Rich Williams, and Repo Trader Ryan Friedl. They tell us about the history and latest priorities at Cavanal Hill, whose new tagline is 'Long live your money.' We also discuss the outlook and challenges facing money market funds in general. Our Q&A follows."

MFI says, "Give us some history. Kitchen responds, "Cavanal Hill began managing its first money market fund in the '90s. Our wealth management group itself traces its roots back to 1910, when Harry Sinclair, of Sinclair Oil, and some other oil men, founded what's now called Bank of Oklahoma. What we at BOK's Wealth Management Division, which Cavanal Hill is part of, traditionally do is, we manage money for ultra-wealthy clients and institutions, including one of the nation's oldest charitable trusts. We've got over 35 investment strategies, taxable fixed income, tax free, fundamental and quantitative equity and, of course, cash management."

He continues, "Cavanal Hill itself has about $8.0 billion under management and roughly $3.0 billion of that is in money market funds. According to MFI, we're the 36th largest out of 67 money fund families. So we're bigger than one might think.... There's a presence not just in Oklahoma, but places like Arkansas, Arizona, Texas and Colorado. We've got a big footprint in the heartland.... I've been here 20 years and this is all I've done here, manage the money market funds."

When asked, "What's your major priority?" Kitchen tells us, "It's always the same. It's the classic money fund value proposition -- balancing safety, liquidity and yield. We're always responsive to the competitive environment. As you know, right now we have a Government fund and a Treasury fund. Before 2016, we had a Prime fund and a Treasury fund. But like so many others, we transitioned the Prime to a government security or 'govie,' due to the 2016 Money Fund reforms."

Our "Impact" update says, "Dreyfus recently filed to change one of its Government money market mutual funds into a new breed of 'impact' or socially responsible funds, making it the second fund to date to funnel business through minority and other 'diversity' dealers. In related news, one of these diversity dealers, Mischler Financial, is ramping up its presence in 'cash'. (See yesterday's News, 'Mischler Financial Joins 'Impact' or Social Money Market Investing Wave.')"

The Prospectus Supplement for the $4.6 billon Dreyfus Government Securities Cash Management Fund tells us, "BNY Mellon Investment Adviser, Inc. generally will seek to place, over time, a majority of the aggregate dollar value of purchases and sales orders for Dreyfus Government Securities Cash Management's portfolio securities with dealers that are owned by minorities, women, disabled persons, veterans and members of other qualified and recognized diversity and inclusion groups, subject to the Adviser's duty to seek the best execution for the fund's orders."

The latest MFI also includes the News brief, "MMF Yields Flatten at 1.5%." It tells us, "Rates on money funds and brokerage sweep accounts are flattening out after declining in the weeks after the Fed's third, and possibly final, rate cut on Oct. 30. Our flagship Crane 100 MF Index inched down 0.01% to 1.50% over the past month. The Crane 100 is down from 1.81% on Sept. 30 and down from 2.18% June 30 and 2.23% at the start of 2019."

A second News piece, "SEC Warns on Brokerage Sweeps," reads, "Stephanie Avakian, the SEC's Co-​Director, Division of Enforcement, commented in a recent speech, "We are also looking at cash sweep arrangements. Cash in advisory accounts is often automatically swept into a money market mutual fund or a bank deposit sweep program. A dually-registered adviser or an adviser with an affiliated broker-dealer may have a financial interest, a conflict, in recommending one cash investment over another."

Our December MFI XLS, with Nov. 30 data, shows total assets rose by $40.9 billion in November to $3.917 trillion, after rising $85.2 billion in October, $80.2 billion in September and $86.9 billion in August. Our broad Crane Money Fund Average 7-Day Yield fell to 1.36% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 17 basis points to 1.50%.

On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA fell 16 basis points to 1.76% and the Crane 100 fell to 1.76%. Charged Expenses averaged 0.40% (down one basis point from last month) and 0.26% (unchanged), respectively for the Crane MFA and Crane 100. The average WAM (weighted average maturity) for the Crane MFA and Crane 100 was 34 and 37 days, respectively (up one day for both the Crane MFA and Crane 100). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

Nov 07
 

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.

MFI's "Portal Wars" article says, "Online money market trading portals, which have quietly become the major distribution channel for Institutional money market funds, are seeing new entrants and major changes for the first time since the 'transparency' battles following the financial crisis. Last year, we saw BlackRock buy Cachematrix and Parthenon Capital invest in ICD Portal. But now we're seeing J.P. Morgan Asset Management enter the space (see our story at right) and Goldman and others branch out and become 'platforms' instead of 'portals'."

It continues, "On a recent podcast, Morgan Stanley Investment Management's Rick Wilkinson comments, '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.'"

Our J.P. Morgan A.M. piece reads, "J.P. Morgan Asset Management recently unveiled some major changes in the liquidity space, including launching its own 'portal' and going 'ESG' with its entire fund lineup. The company also released the latest results of its annual corporate investor survey."

A press release entitled, "J.P. Morgan Launches New Liquidity Management Platform, Morgan Money," tells us, "J.P. Morgan Asset Management ... announced the launch of Morgan Money, a new institutional investing platform to replace the firm's existing Global Cash Portal. The platform delivers a real-time dashboard to invest, a single access point for operations, and enhanced risk management controls."

Paula Stibbe, Global Head of Liquidity Sales, comments, "Morgan Money is designed to deliver a seamless customer experience, centered on operational efficiency, end-to-end system integration, and effective controls. The platform was designed for clients, by clients -- embedding their needs and priorities into its core capabilities and functionality."

Our "Yields Plunge" update says, "A year ago, we wrote the story 'Money Fund Yields Break 2.0%; Still Going Higher.' What a difference a year makes. The about-face in short-term yields is unprecedented. The average money fund yield, as measured by our Crane 100, hit 2.01% a year ago on 10/31/18, its first time above 2.0% in 11 years. Yields then peaked at 2.27% in March 2019, and they’re now 1.67% (10/31/19). Yields fell 14 bps in October, and we're still digesting the latest Fed move."

It adds, "Last week, the Federal Reserve Board cut interest rates for the third time in the past three months, lowering its Federal funds target rate range to 1.50-1.75 percent.... As the money markets digest the Fed's 3rd cut, yields on money market funds, bank deposits and brokerage sweeps continue to inch lower."

The latest MFI also includes the News brief, "Money Fund Assets Break $3.5 Tril." It tells us, "ICI's latest 'Money Market Fund Assets' report show totals broke above $3.5 trillion for the first time since September 2009 and 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%)."

A second News piece, "Local Govts Lobby for Stable NAV," reads, "As we mentioned in our Oct. 3 Link of the Day, 'Stable NAV Bill Filed in House Again,' efforts are again underway to roll back the last round of money market fund reforms and to return the $1.00 NAV for all money funds. Bills have again been filed in the House and Senate, and the lobbying has begun."

Our November MFI XLS, with Oct. 31 data, shows total assets rose by $85.2 billion in October to $3.873 trillion, after rising $80.2 billion in September, $86.9 billion in August and $78.1 billion in July. Our broad Crane Money Fund Average 7-Day Yield fell to 1.53% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 14 basis points to 1.67%.

On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA fell 14 basis points to 1.94% and the Crane 100 fell to 1.93%. Charged Expenses averaged 0.41% (unchanged) 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 33 and 36 days, respectively (up two days for both the Crane MFA and Crane 100). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

Oct 07
 

The October issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Monday morning, features the articles: "Institutional Money Funds Now Driving Flows; Yields Sink," which reviews the surge in money fund assets starting back in April; "European MF Symposium in Ireland Focuses on Future," which excerpts from the Irish Funds and IMMFA EMFS Sessions; and, "Worldwide Assets Hit Record $6.2T: US Jumps, China Falls," which discusses asset growth in money fund markets outside the U.S. We've also updated our Money Fund Wisdom database with Sept. 30 statistics, and 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 September Money Fund Portfolio Holdings are scheduled to ship on Wednesday, Oct. 9, and our Oct. Bond Fund Intelligence is scheduled to go out Monday, Oct. 14.

MFI's "Inst Money Fund," article says, "We've been discussing the surge in money fund assets repeatedly since April, when assets began climbing following normal annual tax outflows. Assets continue to grow strongly, but the composition of the growth has shifted since earlier in the year. Whereas Retail flows were faster in 2018 and in early 2019, Institutional assets have now become the main engine for money fund asset growth."

It continues, "Crane Data's MFI totals show that assets overall rose by $80.2 billion in September to $3.786 trillion, after rising by $84.2 billion in August. Institutional MMFs increased by $51.5 billion, while Retail MMFs rose by $30.3 billion. Government & Treasury money funds are now also growing faster than Prime MMFs; they were up $36.4 billion and $28.9 billion, respectively, vs. Prime’s $16.4 billion increase last month."

Our European MFS summary reads, "Crane Data recently hosted its 7th annual European Money Fund Symposium in Dublin, Ireland, which was once again the largest gathering of money market professionals in Europe. We quote from some of our keynote presentations below. The first featured Patrick Rooney, Senior Regulatory Affairs Manager of Irish Funds, which represents funds domiciled in Ireland, while the second featured Institutional Money Market Funds Association Chair Kim Hochfeld and new IMMFA Secretary General Veronica Iommi."

It writes, "Rooney's speech, 'Money Market Funds in Ireland,' told attendees, 'Assets [of money funds domiciled in Ireland] are at E491 billion. There's been significant growth since 2014 and more modest growth more recently. We are fast approaching the E500 billion mark, so half a trillion in assets. It's a very significant MMF industry here, third in the world after the USA and China. Ireland has further cemented its position as the lead MMF domicile in Europe with Luxembourg next and France rounding out the top three locations."

He continued, "Retail is tiny.... We have new data from the Central Bank of Ireland which indicates that 57% of the assets ... are held by U.K. investors.... The next biggest segment is the U.S. and then Ireland. It's unusual for Ireland to feature so prominently in the investor base given the cross-border international nature of our investment funds. That is largely [due] to the presence of some very large U.S. multinationals here who are using the MMFs."

Our "Worldwide" update says, "The Investment Company Institute's 'Worldwide Regulated Open-Fund Assets and Flows, Second Quarter 2019' report shows that money fund assets globally rose by $32.5 billion, or 0.5%, in Q2'19, to a record $6.192 trillion. The increase was driven by big gains U.S.-based money funds, but money fund assets in China plummeted. MMF assets worldwide have increased by $230.2 billion, or 3.9%, the past 12 months, and money funds in the U.S. now represent 52.0% of worldwide assets."

It adds, "ICI's release says, 'Worldwide regulated open-end fund assets increased 2.9% to $51.43 trillion at the end of the second quarter of 2019, excluding funds of funds…. On a US dollar-denominated basis, equity fund assets increased by 2.9% to $22.72 trillion.... Bond fund assets increased by 4.4% to $11.10 trillion ... while money market fund assets increased by 0.5% globally to $6.19 trillion.'"

The latest MFI also includes the News Brief, "House Stable NAV Bill Filed Again." It tells us, "Wisconsin Representative Gwen Moore (D-WI-4) recently filed H.R.4492, the 'Consumer Financial Choice and Capital Markets Protection Act of 2019,' the latest bill in the House of Representatives that attempts to restore the $1.00 NAV for all money funds) <b:>`_."

A second MFI News Brief titled, "Blackstone Buying Promontory, reads, "We learned from the private-equity website PE Hub that, 'Blackstone Group is buying Promontory Interfinancial Network for $2.5 billion.' The piece explains, 'Launched in 2002, Promontory provides technology-based services to banks to help them retain large-dollar relationships. The ... fintech supplies balance sheet management as well as deposit allocation services to 3,000 financial institutions.' Promontory runs the CDARS (certificate of deposit account registry service) and IND (insured network deposits) programs. Promontory is one of the largest networks servicing the $1.5 trillion brokerage sweeps market."

Our August MFI XLS, with Sept. 30, 2019, data, shows total assets rose by $80.2 billion in September to $3.786 trillion, after rising $86.9 billion in August, $78.1 billion in July, $40.0 billion in June and $91.1 billion in May. Our broad Crane Money Fund Average 7-Day Yield fell to 1.67% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 13 basis points to 1.81%.

On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA fell 12 basis points to 2.08% and the Crane 100 fell to 2.08%. Charged Expenses averaged 0.41% (unchanged) 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 31 and 34 days, respectively (up one day for both the Crane MFA and Crane 100). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)