MFI Daily Data

MFI Daily Data Sample

MFI Daily Data offers the largest and most competitive funds and investors a nightly look at dividend factors and daily yields. Available in Excel, RSS, or custom FTP, Money Fund Intelligence Daily contains:

  • Daily Dividend Factors - Factors or "mill rates" show the amount paid, or credited, by each fund.
  • Yields (1-day, 7-day, 30-day) - Daily 1-day, 7-day and 30-day yields are included, along with rankings.
  • Assets, AMs, Ratings, Cutoffs - Other data includes assets, average maturities, AAA ratings and trading deadlines.
  • Custom Sorts, Rankings - Sort by 1-day yield, or by 30-day, and select your own custom peer group.
  • Crane Money Fund Indexes - Our benchmark money market averages by fund type on every performance data point.

We've begun collecting funds on a daily basis and expect to go live with this product in April. E-mail us for a sample!

Product Summary
Price  $2000/yr ( Discount Policy )
News -
Ranks *D* ( Daily Data )
Funds dot dot ( Full Listing )
Archives -
Index *D* ( Daily Data )
Next Steps
Subscribe Now »
See a demo issue.
Request a trial issue.
Call 1-508-439-4419 for order or info.

MFI Daily Data News

Jul 19
 

Our recent Money Fund Symposium in Pittsburgh was keynoted by Federated Investors President & CEO J. Christopher Donahue. He addressed a number of topics, including the history of money funds, the effort to roll back recent regulatory reforms and money funds overseas. We excerpt from the speech below. (Note: This article is reprinted from the July issue of our flagship Money Fund Intelligence newsletter; contact us at inquiry@cranedata.com to request the full issue.)

Donahue comments, "There was one Pittsburgher who wanted to make a difference, and 50 years ago he began his program talking to children. I'm talking about 'Mr. Rogers' Neighborhood <b:>`_.' Interestingly enough, we, my wife and I, live in Mr. Rogers' house in Pittsburgh where he raised his children.... 'What can Mr. Rogers teach us about money market funds?' Far more than we thought." Mr. Rogers said, "'It's the knowing that we can be trusted, that we never have to fear the truth.' That is the bedrock of our very being. Peter Crane has also asked me a number of questions, which we will cover in this discussion."

He explains, "We'll begin with a little history to see how whether we can be trusted and see whether we have to fear the truth. A short history, a very neighborly history began in '74, when the SEC decided to grant three funds, Fidelity, Federated, and Dreyfus, effective [orders] for their money market funds.... We wanted the name Federated Cash Management, but the SEC told us, 'You can't have that name because you cannot manage cash.' Glen Johnson [then] chose the name Money Market Management."

Donahue tells us, "Then, a bad neighbor appeared on the scene. The bad neighbor was the Comptroller of the Currency. They said, 'You cannot delegate cash management to a fund. This is a violation of fiduciary duty.' Well, with client support, good legal work, and with Gene Maloney of our company learning how to spell 'fiduciary,' we got [approval] and we were back in business."

He continues, "Another bad neighbor washed up on the beach. The SEC decided to have a hearing on amortized cost. That was [at] the instigation of some of our competitors in the industry to have that hearing. Once again with user support, excellent legal work, and my Dad's testimony -- the founding father of the company -- the good guys won. And guess what happened, everyone joined the neighborhood of amortized cost and dollar-in, dollar-out money market funds. This was over 40 years ago."

The Federated CEO states, "Paul Volcker, another bad neighbor coming to the party, testified later that he thought he had the votes in 1982 when the Garn-St. Germain [banking legislation] was passed to kill money market funds. But instead that did not happen. Banks paid 22% rates and you all know the story of the '80s. In short, I have gratitude for our industry."

Like Mr. Rogers would do, he paused for a minute, saying, "Spend that time in full gratitude [thinking about] who helped you with your career, who helped you to get here, and how you are thankful for that.... Why the resiliency in our money market business? Because the people you thank are dedicated to making this business go. It is the very beauty of money funds, the utility of money funds, the good neighbors that we have all been. Money market funds may not be perfect, but they are doggone close. In 2012, as Peter pointed out, I called money funds the 8th Wonder of the World, and many people were wondering whether they should continue to exist. The shareholders love the dollar in, dollar out, the issuers love the competition and the low rates, and the capital markets thrive on them because it is the very spear of the fixed income markets right at the point of short interest rates."

"What Mr. Rogers said was that real strength has to do with helping others. Empathy, stepping into the other person's shoes, as Rogers was very big on shoes. There was a great good neighbor who helped us get out the 2010 amendments. This was perhaps the highest number of unity and neighborliness in the money market fund business. All got together to enhance the resiliency of money market funds. We worked on maturity, liquidity, and disclosure, and one of the most important [changes] that came out of that was that if you had a problem, you had to go to four decimal places. The custodians had to be set up to do it, and the investment advisors had to be set up to do it.... Notice in this scenario, you don't get punished for sins you haven't committed ... only if you have a problem."

He continues, "There was an example, however, of some bad neighborly policy.... In 2014, the regulators had that kind of 'circle of life' attitude [on] money funds. [T]he SEC [basically] said, 'We are not going to kill you, but we are going to waterboard you.' ... You know the result, $1.2 trillion out, and the greatest regulatory-forced run that I know of. It was the greatest crowding out ever because $1.2 trillion went from private markets into government securities. Peter Crane called it 'The Big Sort.' But it all worked because of the resiliency of MMFs."

He discussed waivers, saying "Waivers were a great good neighbor exercise.... [For Federated] over $2.2 billion was waived, $1.6 billion for intermediaries and $600 million for Federated. There were also other unintended consequences that came out.... Municipalities ... saw borrowing costs skyrocket." He adds, "So what did Mr. Rogers say?, 'Listen to your neighbor and when the time comes respond in the most helpful way you can.'"

Donahue asks, "How are deposit sweeps being used? We have this delicious concept now called deposit beta. It is a real fancy term for what you are going to share with your clients of the increase in rates. The way the analysts look at it, the less you share, the better. Again, not exactly a Rogerian concept. The average [paid out] is in the 0.20% [range] in a 2% environment. The betas are lower than they were in the last several cycles because of lower rates, lower gross rates.... But I think it will be a positive for the money market funds because when they spring back, when the customers and competition and the marketplace demand real interest, I think you are going to see a lot of money coming back into money funds."

He adds, "Another question [is], 'How is the best interest rule proposed by the SEC applied? Well that's very interesting. I will read you a little quote from the SEC release. 'When a broker-dealer recommends a more remunerative security or investment strategy over another reasonably available alternative offered by the broker-dealer, the broker-dealer would need to have a reasonable basis to believe that putting aside the broker-dealer's financial incentives, the recommendation was in the best interest of the retail customer.' ... I think the best advice that we got from some smart lawyers is that both of these concepts of fiduciary and suitability are in eclipse and are overlapping [with] what is the best interest for clients. We think the best interest is a real good way to go on this subject. I think it is better for the mutual fund industry and for the industry in general."

Donahue also comments, "Mr. Rogers also got enraged. Imagine that? But why would you get enraged? His quote was, 'When those things that we care about so deeply become in danger, we become enraged. And what a healthy thing that is! Without it, we would never stand up and speak out for what we believe.' The 2014 [SEC] amendments divided the neighborhood. They preserved, thank goodness, retail money market funds, but SIFI fears and other ideas caused people to throw the institutional prime and muni funds under the bus. Now it is time to restore the full neighborhood."

He says, "No more Wall, no more East Germany, and no more having to follow exactly what the SEC determines to be product development. We are so grateful for our great business and a great asset class that we want to get back to the way it was. Hence our support for Senate Bill S.1117 which is known conveniently as 'The Consumer Financial Choice & Capital Markets Preservation Act.' It restores us to the thrilling days of yesteryear -- to the 2010 amendments. It allows the 2014 amended products to exist. But, the marketplace is open, and people don't have to do the funds they disdain. For the SIFI worriers in the crowd, I say [embrace] the 2010 funds and work on your SIFI designation issues instead of opposing this neighborly effort."

"So who is for Senate Bill 1117? Well lots of real good neighbors, hundreds of them. They include 26 local and state government associations, 29 individual counties, 48 individual, large cities, 74 public housing authorities, 55 institutions of higher education, 27 state and regional chambers of commerce, 64 regional or state economic development authorities, 9 large healthcare systems, 24 skilled construction trade unions, 28 state treasurers, many state legislators, 73 members of the U.S. Congress (co-sponsors), 27 U.S. Senators, and many national trade associations.... It has hurt them, and they see the beauty of a restored money market fund environment.... Who's against it? Some of the largest firms in the industry.... I still believe that the future is bright and we have an excellent chance of getting this bill through."

On global issues, he says, "The European regulations are difficult but not deadly. But they will take a lot of work and need a lot of supervision and perseverance to make them come out correct.... The repatriation money is good, but it is temporary. We found that money when it comes in already has a purpose."

Finally, Donahue tells us, "In conclusion, I am grateful and have a tremendous amount of thanks for an outstanding asset class, and for all of those of you who are dedicating your life. We realize you spend more time with your money funds than you do your family. The issuers, the shareholders, and the capital markets thank you too. So I enlist your support for S.1117. Or at the very least, don't oppose the return of these funds to our neighborhood. Mr. Rogers at this point would probably intone, but I would not, 'Would you be mine? Could you be mine? Won't you be my neighbor?'"

Jul 12
 

Crane Data released its July Money Fund Portfolio Holdings Wednesday, and our most recent collection of taxable money market securities, with data as of June 30, 2018, shows a drop in Repo overall but a sharp rebound in Fed Repo. Money market securities held by Taxable U.S. money funds (tracked by Crane Data) decreased by $53.8 billion to $2.871 trillion last month, after increasing by $16.7 billion in May and $46.4 billion in April, but decreasing $105.0 billion in March. Repo continued to be the largest portfolio segment, 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 $31.4 billion (-3.2%) to $952.8 billion, or 33.2% of holdings, after jumping $67.1 billion in May and $99.9 in April, but dropping $89.6 billion in March. Treasury securities fell again, down $6.3 billion (-0.8%) to $773.0 billion, or 26.9% of holdings, after dropping $50.9 billion in May and $108.3 billion in April, but jumping $95.3 billion in March. Government Agency Debt fell by $9.3 billion (-1.4%) to $674.2 billion, or 23.5% of all holdings, after rising by $5.5 billion in May, rising $23.4 in April, and falling $58.1 billion in March. Repo, Treasuries and Agencies total $2.400 trillion, representing a massive 83.6% of all taxable holdings.

CP fell in the sixth month of the year, while CDs and Other (mainly Time Deposits) securities increased. Commercial Paper (CP) was down $10.0 billion (-4.5%) to $213.9 billion, or 7.5% of holdings, after rising $13.2 billion in May, rising $8.8 billion in April and falling $16.2 billion in March. Certificates of Deposits (CDs) rose by $1.6 billion (0.9%) to $169.3 billion, or 5.9% of taxable assets (after dropping by $1.2 billion in May and rising $1.7 billion in April). Other holdings, primarily Time Deposits, rose by $1.6 billion (2.1%) to $79.3 billion, or 2.8% of holdings. VRDNs held by taxable funds fell by $0.0B (-0.4%) (0.3% of assets).

Prime money fund assets tracked by Crane Data dipped again to $651 billion (down from $662 billion last month), or 22.7% (up from 22.6%) of taxable money fund holdings' total of $2.871 trillion. Among Prime money funds, CDs represent over a quarter of holdings at 26.0% (up from 25.3% a month ago), followed by Commercial Paper at 33.0% (down from 33.8%). The CP totals are comprised of: Financial Company CP, which makes up 21.5% 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 5.5% in US Govt Agency Debt, 6.9% in US Treasury Debt, 7.2% in US Treasury Repo, 1.6% in Other Instruments, 8.9% in Non-Negotiable Time Deposits, 5.1% in Other Repo, 3.5% in US Government Agency Repo, and 1.0% in VRDNs.

Government money fund portfolios totaled $1.539 trillion (53.6% of all MMF assets), down from $1.589 trillion in May, while Treasury money fund assets totaled another $681 billion (23.7%), up from $673 billion the prior month. Government money fund portfolios were made up of 41.5% US Govt Agency Debt, 19.8% US Government Agency Repo, 16.4% US Treasury debt, and 22.0% in US Treasury Repo. Treasury money funds were comprised of 69.7% US Treasury debt, 30.1% in US Treasury Repo, and 0.1% in Government agency repo, Other Instrument, and Investment Company shares. Government and Treasury funds combined now total $2.220 trillion, or 77.3% of all taxable money fund assets, the same as last month.

European-affiliated holdings fell $136.5 billion in June to $541.0 billion among all taxable funds (and including repos); their share of holdings fell to 18.4% from 23.2% the previous month. Eurozone-affiliated holdings fell $98.2 billion to $337.3 billion in June; they account for 11.8% of overall taxable money fund holdings. Asia & Pacific related holdings increased by $0.9 billion to $244.8 billion (8.5% of the total). Americas related holdings rose $0.1 billion to $2.083 trillion and now represent 72.6% of holdings.

The overall taxable fund Repo totals were made up of: US Treasury Repurchase Agreements, which decreased $26.2 billion, or -4.3%, to $591.1 billion, or 20.6% of assets; US Government Agency Repurchase Agreements (down $5.1 billion to $328.0 billion, or 11.4% of total holdings), and Other Repurchase Agreements ($33.7 billion, or 1.2% of holdings, down $0.1 billion from last month). The Commercial Paper totals were comprised of Financial Company Commercial Paper (down $2.1 billion to $139.6 billion, or 4.9% of assets), Asset Backed Commercial Paper (up $0.3 billion to $42.2 billion, or 1.5%), and Non-Financial Company Commercial Paper (down $8.2 billion to $32.2 billion, or 1.1%).

The 20 largest Issuers to taxable money market funds as of June 30, 2018, include: the US Treasury ($773.0 billion, or 26.9%), Federal Home Loan Bank ($549.0B, 19.1%), BNP Paribas ($143.4B, 5.0%), RBC ($95.5B, 3.3%), Federal Reserve Bank of New York $88.6B, 3.1%), Federal Farm Credit Bank $76.9B, 2.7%), Wells Fargo ($67.5B, 2.4%), Fixed Income Clearing Corp ($51.0B, 1.8%), HSBC ($51.0B, 1.8%), Mitsubishi UFJ Financial Group Inc ($46.1B, 1.6%), Sumitomo Mitsui Banking Co ($45.1B, 1.6%), JP Morgan ($43.3B, 1.5%), Bank of Montreal ($41.5B, 1.4%), Nomura ($40.4B, 1.4%), Bank of America ($38.2B, 1.3%), Barclays PLC ($36.8B, 1.3%), Societe Generale ($36.1B, 1.3%), Toronto-Dominion ($33.7B, 1.2%), Citi ($30.2B, 1.1%), and Federal Home Loan Mortgage Co ($29.9B, 1.0%).

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: BNP Paribas ($133.5B, 14.0%), Federal Reserve Bank of New York ($88.6B, 9.3%), RBC ($79.0B, 8.3%), Wells Fargo ($54.0B, 5.7%), Fixed Income Clearing Corp ($51.0B, 5.4%), HSBC ($42.7B, 4.5%), Nomura ($40.4B, 4.2%), JP Morgan ($34.7B, 3.6%), Bank of America ($34.1B, 3.6%), and Sumitomo Mitsui Banking Co ($32.4B, 3.4%).

The 10 largest Fed Repo positions among MMFs on 6/30/18 include: Fidelity Cash Central Fund ($15.1B in Fed Repo), Fidelity Sec Lending Cash Central ($8.7B), Dreyfus Govt Cash Mgmt ($8.5B), Schwab Govt MMkt ($8.4B), Fidelity Inv MM: Treasury Port ($6.2B), Dreyfus Tr&Ag Cash Mgmt ($4.0B), JP Morgan US Govt ($3.7B), BlackRock Lq FedFund ($3.4B), JP Morgan US Trs Plus ($2.9B), and BlackRock Cash Treas ($2.8B),.

The 10 largest issuers of "credit" -- CDs, CP and Other securities (including Time Deposits and Notes) combined -- include: Toronto-Dominion Bank ($21.3B, 5.4%), RBC ($16.5B, 4.2%), Mitsubishi UFJ Financial Group Inc. ($15.2B, 3.9%), Swedbank AB ($14.7B, 3.7%), Canadian Imperial Bank of Commerce ($14.0B, 3.6%), Bank of Montreal ($13.5B, 3.4%) Wells Fargo ($13.5B, 3.4%), Sumitomo Mitsui Banking Co ($12.7, 3.2%), Australia & New Zealand Banking Group Ltd ($12.0B, 3.1%), and Svenska Handelsbanken ($11.9, 3.0%).

The 10 largest CD issuers include: Wells Fargo ($13.4B, 8.0%), Bank of Montreal ($12.6B, 7.4%), RBC ($10.1, 6.0%), Svenska Handelsbanken ($9.3B, 5.5%), Mitsubishi UFJ Financial Group Inc ($9.0B, 5.3%), Sumitomo Mitsui Trust Bank ($8.8B, 5.2%), Swedbank AB ($8.7B, 5.2%), Sumitomo Mitsui Banking Co ($7.7B, 4.6%), Mizuho Corporate Bank Ltd ($7.6B, 4.5%), and Canadian Imperial Bank of Commerce ($6.8B, 4.0%).

The 10 largest CP issuers (we include affiliated ABCP programs) include: Toronto-Dominion Bank ($13.2B, 7.3%), JPMorgan ($8.5B, 4.7%), Commonwealth Bank of Australia ($7.2B, 3.9%), Credit Suisse ($6.8B, 3.7%), UBS AG ($6.6B, 3.6%), Australia & New Zealand Banking Group Ltd ($6.5B, 3.6%), National Australia Bank Ltd ($6.4B, 3.5%), Mitsubishi UFJ Financial Group Inc ($6.1B, 3.4%), Bank of Nova Scotia ($5.8B, 3.2%), and Canadian Imperial Bank of Commerce ($5.7B, 3.1%).

The largest increases among Issuers include: Federal Reserve Bank of New York (up $67.1B to $88.6B), RBC (up $12.6B to $95.5B), Bank of Montreal (up $6.7B to $41.5B), Nomura (up $6.0B to $40.4B), Sumitomo Mitsui Trust Bank (up $4.1B to $14.1B), Fixed Income Clearing Co (up $4.1B to $51.0B), BNP Paribas (up $3.7B to $143.4B), DNB ASA (up $3.6B to $14.0B), Mitsubishi UFJ Financial Group Inc (up $3.4B to $46.1B), and Bank of America (up $3.3B to $38.2B).

The largest decreases among Issuers of money market securities (including Repo) in June were shown by: Credit Agricole (down $42.1B to $24.4B), Barclays PLC (down $21.9B to 36.8B), Credit Suisse (down $18.1B to $11.2B), Natixis (down $15.3B to $28.0B), Societe Generale (down $15.2B to $36.1B), Mizuho Corporate Bank Ltd (down $11.6B to $17.8B), Deutsche Bank AG (down $10.5B to $7.2B), JP Morgan (down $9.3B to $43.3B), Federal Home Loan Bank (down $6.7B to $549.0B), and the US Treasury (down $6.3B to $773.0B).

The United States remained the largest segment of country-affiliations; it represents 64.3% of holdings, or $1.846 trillion. France (8.5%, $243.9B) remained in the No. 2 spot and Canada (8.3%, $237.1B) remained No. 3. Japan (6.7%, $191.3B) stayed in fourth place, while the United Kingdom (4.2%, $119.5B) remained in fifth place. Germany (1.5%, $43.9B) moved ahead of The Netherlands (1.5%, $42.4B) into sixth place. Sweden (1.5%, $44.1B) ranked 8th while Australia (1.4%, $39.1B) moved ahead of Switzerland (0.8%, $23.7B) to rank 9th and 10th. (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 June 30, 2018, Taxable money funds held 31.8% (down from 32.0%) of their assets in securities maturing Overnight, and another 15.5% maturing in 2-7 days (down from 16.2%). Thus, 47.3% in total matures in 1-7 days. Another 23.4% matures in 8-30 days, while 10.0% matures in 31-60 days. Note that over three-quarters, or 80.6% 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 10.6% of taxable securities, while 7.5% matures in 91-180 days, and just 1.3% matures beyond 181 days.

Jul 09
 

The July issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Monday morning, features the articles: "Money Fund Symposium Focus on Rising Yields, Pending Flows," which cites highlights and quotes from our recent Pittsburgh conference; "Federated's Donahue Tells MFS: Be Good Neighbors," which excerpts Federated Investors' CEO Chris Donahue's keynote speech at MFS; and, "Worldwide MF Assets: Chinese MFs Jump, US Drop," which reviews ICI's latest quarterly collection of global fund statistics. We've also updated our Money Fund Wisdom database with June 30, 2018, 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 July Money Fund Portfolio Holdings are scheduled to ship on Wednesday, July 11, and our June Bond Fund Intelligence is scheduled to go out Monday, July 16.

MFI's "MF Symposium Recap" article says, "Two weeks ago, Crane Data hosted its 10th annual Money Fund Symposium, which brought together a near-record 565 money fund managers, issuers, dealers, investors and servicers to the $3.0 trillion money market fund industry. The mood overall was warm (thanks in part to an air conditioning issue on the first day) and upbeat, as money market funds celebrated what no doubt will be their best year in a decade. Higher yields, rising assets, the continued gradual recovery in Prime funds, and the potential to take back market share from bank deposits dominated the agenda. We quote from some of the sessions below."

The lead piece continues, "Our 'Major Money Fund Issues 2018,' moderated by Crane Data's Peter Crane, featured Dreyfus's Tracy Hopkins, Goldman Sachs Asset Management's Pat O’Callaghan, and Wells Fargo AM's Jeff Weaver. (Note: Thanks to those who attended and supported our Pittsburgh show. Visit our 'Money Fund Symposium 2018 Download Center' to access the conference materials, and mark your calendars for next year’s show, June 24-26, 2019, at the Boston Renaissance.)"

It tells us, "On the 'Major Issues' panel, Crane first asked about ultra-short issues and whether investors were still interested in this segment. O'Callaghan says, 'Yes, absolutely. I think there are a lot of issues going on right now in the front end.... The Fed being active is drawing people's attention.... If you go back to a couple of years ago -- there wasn't a lot of deviation [between MMFs and ultra-shorts].... Now you have a situation where rates are going higher and spreads are growing wider.... They're not just looking at money funds; they're looking at products across the board, whether it’s ultra-shorts or Treasury funds.... All of that is good for us.'"

MFI's latest Profile reads, "Our recent Money Fund Symposium in Pittsburgh was keynoted by Federated Investors President & CEO J. Christopher Donahue. He addressed a number of topics, including the history of money funds, the effort to roll back recent regulatory reforms and money funds overseas. We excerpt from the speech below."

Donahue comments, "There was one Pittsburgher who wanted to make a difference, and 50 years ago he began his program talking to children. I'm talking about 'Mr. Rogers' Neighborhood.' Interestingly enough, we, my wife and I, live in Mr. Rogers' house in Pittsburgh where he raised his children.... 'What can Mr. Rogers teach us about money market funds?' Far more than we thought."

Mr. Rogers said, "It's the knowing that we can be trusted, that we never have to fear the truth." That is the bedrock of our very being. Peter Crane has also asked me a number of questions, which we will cover in this discussion."

He explains, "We'll begin with a little history to see how whether we can be trusted and see whether we have to fear the truth. A short history, a very neighborly history began in '74, when the SEC decided to grant three funds, Fidelity, Federated, and Dreyfus, effective [orders] for their money market funds.... We wanted the name Federated Cash Management, but the SEC told us, 'You can't have that name because you cannot manage cash.' Glen Johnson [then] chose the name Money Market Management."

Donahue tells us, "Then, a bad neighbor appeared on the scene. The bad neighbor was the Comptroller of the Currency. They said, 'You cannot delegate cash management to a fund. This is a violation of fiduciary duty.' Well, with client support, good legal work, and with Gene Maloney of our company learning how to spell 'fiduciary,' we got [approval] and we were back in business." (See Donahue's full speech in MFI or watch for more excerpts in coming weeks.)

MFI's "Worldwide" article says, "The Investment Company Institute released its "Worldwide Regulated Open-Fund Assets and Flows, First Quarter 2018” late last month. The most recent data collection on mutual funds in other countries (as well as the U.S.) shows that money fund assets globally rose by $198.0 billion, or 3.4%, in Q1’18 to $6.098 trillion, led by big jumps in Chinese and French money funds. Money funds in Korea, India, Ireland, and Mexico also rose. MMF assets worldwide have increased by $940.6 billion, or 18.2%, the past 12 months. The U.S., Luxembourg, and Japan were the only countries showing noticeable decreases in Q1’18. We review the latest Worldwide MMF totals below."

ICI’s release says, "Worldwide regulated open-end fund assets increased 1.5 percent to $50.01 trillion at the end of the first quarter of 2018, excluding funds of funds. Worldwide net cash inflow to all funds was $584 billion in the first quarter, compared with $687 billion of net inflows in the fourth quarter of 2017. The Investment Company Institute compiles worldwide open-end fund statistics on behalf of the International Investment Funds Association, the organization of national fund associations. The collection for the first quarter of 2018 contains statistics from 47 jurisdictions.”

Our July MFI XLS, with June 30, 2018, data, shows total assets decreased $32.6 billion in June to $3.025 trillion, after increasing $63.5 billion in May and $19.9 billion in April, and decreasing $42.9 billion in March. Our broad Crane Money Fund Average 7-Day Yield was up 11 basis points to 1.53% during the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 13 bps to 1.74%.

On a Gross Yield Basis (7-Day) (before expenses were taken out), the Crane MFA rose to 1.98% and the Crane 100 rose to 2.01%. Charged Expenses averaged 0.45% and 0.28% (unchanged), respectively for the Crane MFA and Crane 100. The average WAM (weighted average maturity) for the Crane MFA and Crane 100 were both 29 days, respectively (up one day from last month). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

Jun 21
 

This month, Money Fund Intelligence interviews Jason Granet, Deputy Head of Liquidity Solutions for Goldman Sachs Asset Management, and Kathleen Hughes, Global Head of GSAM's Liquidity Solutions Client Business. Goldman Sachs Asset Management is one of the top 5 money fund managers globally, and we discuss the firm's history in cash, their latest priorities and challenges, and developments in Europe and in the world just beyond money markets. Our interview follows. (Note: This article is reprinted from the June issue of our flagship Money Fund Intelligence newsletter; contact us at inquiry@cranedata.com to request the full issue.)

MFI: Tell us about your history. Granet: We entered the business in 1981 with $2 billion in assets. Over our 37-year history, we have grown the franchise into $280 billion-plus of money market fund assets across a range of fund families globally. In 1996, we launched our Dublin-domiciled Liquid Reserves family and we consolidated our U.S. funds into the Financial Square family in 2010. We recently launched our Liquid Reserves Plus funds in dollars, euros, and sterling, which is an extension of our Liquid Reserves range. We manage taxable, tax exempt and tax advantaged money funds both onshore and offshore, and we have funds domiciled in dollars, euros, sterling, and yen, as well as a suite of separate accounts and short duration products. Money markets have a long legacy here and are an important part of our global franchise.

We believe our credit process is a strong contributing factor to our business. We're unique in the sense that we run an independently constructed list of between 600 and 1,000 issuers -- depending on the day or week -- that is maintained by Goldman Sachs' credit risk team. They've been doing that since the day we started in the early 1980s. It is the cornerstone of our franchise and something that we are very proud of.

Personally, I am just finishing 18 years at Goldman Sachs. I was responsible for our Liquidity Solutions business in Europe and Asia, and I've just recently relocated back to New York as the deputy head of the business globally <b:>. `Hughes: I've been with GSAM for nearly eight years. I joined in September of 2010, and I've been in the money market space in Europe since 2001.

MFI: What are your big priorities? Hughes: When we think about priorities, the overarching theme has always been to understand our clients and aim to align our product offerings with their biggest needs or challenges. So, one of our biggest priorities right now won't be a surprise to you or your readers: it's European money market regulatory reform. We're engaging with clients, helping them understand how that reform will impact them and making sure that we are evolving our products to meet their needs.

Another theme that we're very engaged with clients on right now is the impact of tax reform in the U.S. and how to navigate the potential effects of repatriation. Some other things that we have been focused on are changes in technology, and how we can use technology to help our clients and drive more efficiencies for them, whether it's efficiencies around trading, moving money, or even risk management. As Jason said, we have also recently launched some new products. Those are clearly products and opportunities that were created by pending European money market fund reform and client feedback. Again, we are focused on seeing how can we help clients.

MFI: What are your big challenges? Granet: We believe different cycles bring different challenges. The first is obviously when there is stress in the system, whether it was in '94, '98, clearly '07-'08, or the early 2010's with stress in Europe. So, there are different points in times that require that we adapt to those challenges. Right now, negative rates continue to be a challenge in some parts of the world and interest rates remain relatively low globally. In this environment, just showing some differentiation can be a challenge. Lastly, bank regulation has been another challenge. As ratios are introduced and then get tweaked, adjusting can create different challenges on the investment side for our clients and different types of clients.

The overarching credit quality of the investment universe also goes through different cycles. In managing money market funds, we are investing the highest quality, most liquid part of the investment spectrum. So there is always pressure on sourcing appropriate investments and making sure we have robust, bulletproof portfolios in the highest quality, best, and most liquid markets. Different backdrops, political and regulatory changes, idiosyncratic company events and tax changes can all play into that, and it's something we are regularly navigating.

MFI: What are you buying? Granet: Markets at the front end of the curve have been volatile in 2018. That's created lots of different opportunities for us in our different strategies. As one example, with the reconciliation of some negotiations in Washington, T-bill issuance has increased massively versus years past. Market dynamics are always fluid, so when it comes to the portfolio we are always evaluating the relative value of different assets. The overarching perspective that we take doesn’t change, but every day or every week can provide some micro-differences.

MFI: What are clients asking about? Hughes: I'll mention three different things. First, clients are always acutely attuned to the interest rate environment. When we talk to clients in the U.S., they are wondering how to take advantage or think about the rising rate environment and what is happening in the short end of the yield curve, thinking about that with respect to cash on their balance sheets or cash within the ecosystem that they may be managing.

Second, and in contrast the U.S., clients in Europe are still dealing with the pain of negative interest rates. Those clients that have excess cash may not want to keep it all in money market funds and are looking for alternatives. Are there ways to use other strategies in the short duration space that can help to offset some of that negativity?

Third, tax reform is top of mind for many of our clients, certainly clients in the U.S. Their outlook on structural cash within their system has changed. Cash that used to be thought of as sitting in another jurisdiction with kind of an unlimited investment horizon allowed you to think differently about risk and return. Now that U.S. tax reform has been passed and is underway, that cash is no longer trapped and many are thinking about their options.... There is definitely money in motion as a result of tax reform.

Another theme, which is maybe a little bit more out there but is starting to come up, is ESG [environmental, social and governance issues]. Certain institutional investors have been focused on ESG for a long time, but we are starting to see it come up more in dialogues with corporate treasurers. Companies are being rated and scored on ESG factors by third-party providers. A company treasurer wants to know what is driving those scores and how they are being viewed.... There are lots of different ways that businesses are asking us about that topic and we are engaged on that one as well.

MFI: What about recent flows? Granet: There are a couple of things happening with flows. The first is, we are definitely seeing a shift -- somewhere between a trickle and a flow -- back into prime funds. There have clearly been opportunities in the markets as yields, indicated by LIBOR, have moved to levels that are attractive to investors, especially relative to other indices.... Money is also moving from offshore to onshore, and investors are shortening investment durations.

MFI: Tell us more about European funds? Granet: The European regulations have two styles -- short term money market funds and standard money market funds. The short-term have 60/120 day WAM/WAL limits, while the standards have 180/360 WAM/WAL limits. Our new Plus funds fall under the 180/360 limits.... This was a product completion exercise for us -- we didn't have any real offerings in the 180/360 bucket.... We also have offerings beyond too, [which] would fall outside of money market fund regulations.

Hughes: In Europe, everything is going to change. Doing nothing or sitting it out is not an option. What clients have shared with us as we have engaged them is that the low volatility NAV product feels closest to what they enjoy today from a utility perspective -- being able to trade in and out at a dollar or a euro or one pound. So client feedback seems to be coalescing around the LVNAV product.

MFI: What about your outlook? Hughes: I am optimistic. The industry since 2008 has definitely been tested with two rounds of reforms in the U.S., negative interest rates, etc. That certainly [attests] to the robustness of the market. We are optimistic about what is coming down the road in Europe, and we feel optimistic with respect to the importance of this product for our clients. We continue to hear that this is something they rely on every day. So we want to make sure that we are preserving the utility of the product and responding to our client’s needs and challenges.

Granet: This environment provides a tremendous opportunity for us right now to engage with clients. With rates moving, tax changes, and reform, we are rolling up our sleeves a little higher and digging in a little deeper. It's just an awesome time for us to be even more engaged and solve client issues.