Money Fund Intelligence

Money Fund Intelligence Sample

Money Fund Intelligence is a must-read for money market mutual fund and cash investment professionals. The monthly PDF contains:

  • Money Market News - Coverage of cash happenings, new products, companies in the news, people, and more.
  • Feature Articles - Stories like "Trading Portals", "Enhanced Cash", and "Brokerages Push Banks".
  • Money Fund Profiles - In-depth interviews with portfolio managers and management teams.
  • Fund Performance/Rankings - Full listings of fund 7-day yields, monthly and longer-term returns (1-, 3-, 5-, and 10-year), assets, expense ratios, and more.
  • Crane Money Fund Indexes - Our benchmark money market averages by fund type, plus Brokerage Sweep and Bank Indexes.

Whether you're comparing a fund to the competition, benchmarking your cash portfolio to the market, looking for an investment, or looking for new product ideas, Money Fund Intelligence is the answer. E-mail us for the latest issue!

Latest Contents (Feb. 1, 2024)

MMF Assets Jump in January; $6.4 Tril. 1
Federated Money Market Celebrates 50 1
BlackRock, Schwab Shed Light on MMF 1
Money Mkt News, Benchmarks 1
Brokerage Sweep & Bank Saving 8
People, Calendar, Subscription 8
Top Performing Tables, Indexes 9-12
Fund Performance Listings 13-26

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Money Fund Intelligence News

Feb 07
 

The February issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Wednesday morning, features the articles: "MMF Assets Jump in January; Hitting Record $6.4 Trillion," which reviews the continued inflows into MMFs; "Federated Money Market Celebrates 50th; Q4 Earnings," which covers Federated Hermes' most recent earnings and their 50th year in MMFs; and, "BlackRock, Schwab Shed Light on MMF Shifts in Q4 Earnings," which reviews the latest earnings calls mentioning MMFs. We also sent out our MFI XLS spreadsheet Wednesday a.m., and we've updated our Money Fund Wisdom database with 1/31/24 data. Our February Money Fund Portfolio Holdings are scheduled to ship on Friday, February 9, and our February Bond Fund Intelligence is scheduled to go out on Wednesday, February 14.

MFI's "MMF Assets Jump" article says, "Money fund assets continued their record run in January, normally the weakest month of the year, after rising by a record $1.1 trillion in 2024. Our MFI XLS shows assets rising $87.0 billion, or 1.4%, to a record $6.405 trillion in the latest month. Assets continue higher in February too, rising $18.3B in the first 5 days of the new month, according to our MFI Daily."

It continues, "Over the past 12 months through 1/31/24, money fund assets have jumped by $1.200 trillion, or 23.0%. Taxable Retail MMFs increased by $591.3 billion, or 34.8% to $2.289 trillion, while Taxable Inst MMFs increased by $601.7 billion, or 17.8% to $3.990 trillion. Tax Exempt MFs inched up $7.4 billion, or 6.2% to $126.5 billion <b:>`_."

We write in our Federated 50th article, "Federated Hermes announced the 50th anniversary of Money Market Management, the company's first and one of the industry's oldest money market mutual funds. A press release entitled, 'Federated Hermes, Inc. celebrates 50 years of money market innovation' explains, 'Federated Hermes, Inc. (FHI), a global leader in active, responsible investing, today celebrates 50 years of money market innovations focused on improving client experiences and investment outcomes. Over five decades, Federated Hermes has maintained a steadfast dedication to products and services that are vetted through diligent credit analysis and broad diversification -- providing clients with competitive yields and daily liquidity.'"

It tells us, "President & CEO J. Christopher Donahue comments, 'For 50 years, through seasons of volatility and calm, Federated Hermes has confidently managed money market funds as the ballast in our ship. Our team of investment management professionals has maintained an unwavering focus on providing sound and innovative cash management solutions for our clients. With an average of 25 years of investment experience, the investment professionals on our liquidity team have provided rigorous money market management through a variety of interest-rate environments, regulatory changes, bull and bear economies and changing geopolitical conditions.'"

Our "BlackRock, Schwab" piece states, "BlackRock and Schwab both discussed money funds on their latest earnings calls, and show that 'cash sorting,' or the shift into money funds from bank deposits, remains alive and well. On BlackRock's latest earnings and earnings call, CFO Martin Small explains, 'BlackRock's cash management platform saw $33 billion of net inflows in the fourth quarter and $79 billion of net inflows in 2023. We're pleased with the continued strong growth in our cash and liquidity business. With year-end AUM up 14%, or over $90 billion year on year, we're leveraging our scale and integrated cash offerings to engage with clients who are using these products not only to manage liquidity but also to earn attractive returns.'"

It continues, "During the Q&A, one analyst asked about fixed income inflows, and President Rob Kapito responds, 'I wake up every morning salivating about the $7 trillion that's sitting in money market accounts that's waiting to move. And in order for it to move, you have to have a wide plate of products.... ETFs are becoming the investor's preferred vehicle with access to investments.... So, I think there's a huge, huge runway for fixed income.... The wind is right behind our back for that.'"

MFI also includes the News brief, "American Funds Central Cash to Convert to Govt to Avoid Liquidity Fees." which says, "Capital Group's $144.4 billion American Funds Central Cash fund, the largest Prime Inst money market fund, has filed to convert to a Government MMF, making it the first major casualty of the latest round of the SEC's pending Money Fund Reforms. Its Form N-1A filing tells us, 'On or about June 7, 2024, the fund intends to operate as a government money market fund pursuant to rule 2a-7 under the 1940 Act.'"

Another News brief quotes, "Investors' Business Daily on 'How The Best Online Brokers Boost Your Cash Holdings.' They state, 'Online brokers face stiff competition when it comes to paying clients to park their idle cash. They've had to up the ante as interest rates have risen and investors had plenty of cash ... options to choose from. Cash management options are a priority for online investors.'"

A third News brief, "The WSJ's 'Charles Schwab Just Survived a Year From Hell. The Trouble Isn’t Over Yet,' tells us, 'Schwab, founded some 50 years ago, grew from a discount brokerage for Main Street into a personal-finance supermarket.... While Schwab cut fees and made less revenue from trading, it minted money sweeping cash from its brokerage customers into bank deposits that paid out little interest. When rates were low, it worked well for Schwab. Customers were content keeping their money at the bank when there were few alternatives for better yield.'"

A sidebar, "Worldwide MF Assets $9.9T," says, "The Investment Company Institute's, 'Worldwide Regulated Open-Fund Assets and Flows, Third Quarter 2023' shows that money fund assets globally jumped by $225.3 billion, or 2.3%, in Q3'23 to $9.944 trillion. The increases were led by a sharp jump in money funds in U.S., while Ireland, Luxembourg, Mexico and Canada also rose. Meanwhile, money funds in China and Australia were lower. MMF assets worldwide increased by $1.639 trillion, or 19.7%, in the 12 months through 9/30/23, and money funds in the U.S. now represent 57.1% of worldwide assets."

Our February MFI XLS, with January 31 data, shows total assets increased $87.0 billion to a record $6.405 trillion, after increasing $24.5 billion in December and $219.8 billion in November. Assets decreased $39.3 billion in October, but increased $77.8 billion in September, $104.2 billion in August, $21.0 billion in July, $20.3 billion in June, $152.7 billion in May, $56.5 billion in April, $345.1 billion in March and $56.0 billion in February."

Our broad Crane Money Fund Average 7-Day Yield was down 2 bps to 5.06%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 3 bps to 5.17% in January. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both averaged 5.43%. Charged Expenses averaged 0.37% and 0.26% for the Crane MFA and the Crane 100. (We'll revise expenses on Thursday once we upload the SEC's Form N-MFP data for 1/31/24.) The average WAM (weighted average maturity) for the Crane MFA was 38 days (up 1 day from previous month) and the Crane 100 WAM was also unchanged at 38 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

Jan 08
 

The January issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Monday morning, features the articles: "Record '23 for Money Funds: Assets, Revenues & Dividends," which reviews the record-setting year for MMFs in 2023; "Wall Street's Enthralled by $6 Trillion in MMFs, But Mirage," which attempts to debunk the "Wall of Cash" theory; and, "Top Money Funds of 2023; 15th Annual MFI Awards," which reviews the best performing MMFs of 2023. We also sent out our MFI XLS spreadsheet Monday a.m., and we've updated our Money Fund Wisdom database with 12/31/23 data. Our January Money Fund Portfolio Holdings are scheduled to ship on Wednesday, January 10, and our January Bond Fund Intelligence is scheduled to go out on Tuesday, January 16.

MFI's "Record '23" article says, "Money funds had perhaps the best year in their 52-year history in 2023, with assets surging $1.1 trillion to record $6.3 trillion, yields rising to over 5% and revenues jumping to well over $15.0 billion. Money fund investors collected more in dividends this year than they had in the prior 15 years combined (almost $300 billion), and, predictions of Fed cuts and outflows notwithstanding, the party shows no signs of stopping."

It continues, "The Financial Times' article, 'Stampede Into Money Market Funds Sparks Fee Bonanza for Asset Managers' explains, 'Record inflows into US money market funds in 2023 have triggered a multi-billion-dollar fee bonanza for the asset management industry, which for years treated the product as a loss-leader. US money market fund providers -- such as Fidelity, Vanguard and Charles Schwab -- collectively earned $7.6bn in fees in 2023 as assets passed $6.3tn, according to government figures. That was more than $1bn higher than in 2022 and a jump of around 35% from 2021, before US interest rates began to rise, according to the data from the Office for Financial Research.'"

We write in our Wall Street's Enthralled article, "Over the past month, a myriad of articles and financial news shows have cited the $6 trillion in money funds as a reason stocks will go higher. We've been hearing this 'Wall of Cash' theory for decades, and still don't buy it. (They never mention the $17 trillion in bank deposits nor the fact that almost 2/3 of the MMF total is Institutional.) Below, we quote from a number of the recent mentions, and look at whether they have any merit."

It tells us, "One of the few that gets it right is Bloomberg's 'Stock Skeptics Say $6 Trillion Cash Waiting on Sidelines Is a Mirage.' It says, 'One often-made argument in favor of stocks says investors should dive in before roughly $6 trillion of money-market cash gets redeployed into equity assets globally. But buying the theory requires a big leap of faith -- there's significantly less out there to actually fund riskier gambles. So say a pack of stock skeptics who, while not counseling selling out of the market, warn that some of the bull cases going around suffer from some optimistic framings.'"

Our "Top Money Funds" piece states, "This issue recognizes the top performing money funds, ranked by total returns, for calendar year 2023, as well as the top funds for the past 5‐year and 10‐year periods. We present the funds below with our annual Money Fund Intelligence Awards. These are given to the No. 1‐ranked funds based on 1‐year, 5‐year and 10‐year returns, through Dec. 31, 2023, in each of our major fund categories -- Prime Institutional, Government Institutional, Treasury Institutional, Prime Retail, Government Retail, Treasury Retail and Tax‐Exempt."

It continues, "The Top-Performing Prime Institutional fund (and fund overall) was BlackRock Cash Inst MMF SL (BISXX), which returned 5.38% <b:>The Top-Performing Prime Institutional fund (and fund overall) was BlackRock Cash Inst MMF SL (BISXX), which returned 5.38%. Excluding private and internal funds, the best performer in 2023 was Western Asset Prem Inst Liquid Res Capital (WAAXX) with a return of 5.35%. Among Prime Retail funds, Allspring Money Market Fund Premier (WMPXX) had the best return in 2023 (5.28%). (Our Crane 100 Money Fund Index returned 4.90% in 2023.)"

MFI also includes the News brief, "MF Assets Continue Record Run," which says, "Our MFI XLS shows assets rising $24.5 billion, or 0.4%, to a record $6.312 trillion in December. For 2023, MMFs are up $1.143 trillion (22.1%) with Taxable Retail MMFs up $603.3B (36.9) and Taxable Inst MMFs up $528.0B (15.5%). Assets continue jumping in January too, rising $66.5B to a record $6.367T in the first 4 days of the New Year, according to our MFI Daily."

Another News brief states, "Bloomberg Interviews Wells Fargo's Vanessa McMichael in, '2023 the Year for Money Market Funds.' McMichael says, 'This year has undoubtedly been the year of the money market funds. Right now, money market funds are sitting at about $6 trillion.... At the end of 2019, total money market fund assets were only $3 trillion.... There's been about $1 trillion in cash that has flown into money market funds throughout this year.... You can't deny the value.... Over the past couple of months, money market fund yields have remained stable while the rest of the curve has continued ... to decline.... But ... we think that [corporate] investors do need to think about extending duration.'"

A third News brief, "Dec. Portfolio Holdings: Treasuries Jump Again, Repo Slides," says, "Our latest Money Fund Portfolio Holdings statistics show that Treasury holdings surged again in November while Repo fell. Treasuries jumped by over $250 billion, ranking in the No. 2 spot. Agencies were the third largest segment, CP remained fourth, ahead of CDs, Other/Time Deposits and VRDNs."

A sidebar, "Reuters on $6 Tril. Cash Hoard," says, "Reuters' 'A $6 trillion cash hoard could fuel more U.S. stock gains as Fed pivots,' explains, 'Investors wondering whether markets can continue their torrid rally are eyeing one important factor that could boost assets: a nearly $6 trillion pile of cash on the sidelines. Soaring yields have pulled cash into money markets and other short-term instruments.... Total MMF assets hit a record $5.9 trillion on Dec. 6, according to ICI.'"

Our January MFI XLS, with December 31 data, shows total assets increased $24.5 billion to $6.312 trillion, after increasing $219.8 billion in November, decreasing $39.3 billion in October, increasing $77.8 billion in September, $104.2 billion in August, $21.0 billion in July, $20.3 billion in June, $152.7 billion in May, $56.5 billion in April, $345.1 billion in March, $56.0 billion in February and $22.5 billion in January."

Our broad Crane Money Fund Average 7-Day Yield was unchanged at 5.08%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was unchanged at 5.20% in December. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both averaged 5.46%. Charged Expenses averaged 0.37% and 0.26% for the Crane MFA and the Crane 100. (We'll revise expenses on Tuesday once we upload the SEC's Form N-MFP data for 12/31/23.) The average WAM (weighted average maturity) for the Crane MFA was 37 days (up 2 days from previous month) and the Crane 100 WAM was also up 3 at 38 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

Dec 07
 

The December issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Thursday morning, features the articles: "Top 10 Stories of 2023: Assets Surge $1T to $6.2T; Yields 5%," which reviews the biggest news stories of 2023; "J.P. Morgan's 2024 Outlook: Cash to Remain Attractive," which covers JPM’s expectations for the year to come; and, "CFTC Proposal Allows Only Govt MMFs for Collateral," which reviews the potential changes to investments by FCMs. We also sent out our MFI XLS spreadsheet Thursday a.m., and we've updated our Money Fund Wisdom database with 11/30/23 data. Our December Money Fund Portfolio Holdings are scheduled to ship on Monday, December 11, and our December Bond Fund Intelligence is scheduled to go out on Thursday, December 14. (Note: Register ASAP for our Money Fund University, Dec. 18-19 in Jersey City, New Jersey, at the Westin Jersey City Newport. Clients and friends are also welcome to stop by Crane Data's Holiday Cocktail Party at MFU on 12/18 from 5-7:30pm!)

MFI's "Top 10 Stories of 2023: Assets Surge $1T to $6.2T; Yields 5%" article says, "Money fund assets soaring $1.1 trillion to a record $6.2 trillion was the biggest story of the year in 2023. With 3 weeks still to go, money funds will likely show the biggest annual increase in their 50+ year history. Last year, rising yields were the big news, and yields continuing to climb and breaking 5% was also major this year. Other top stories of 2023 included: the long-awaited passage of the SEC's Money Fund Reform Proposal, the continued growth of Social MMFs and the increase in yields in European and worldwide markets. Below, we excerpt from a number of these to highlight the major trends of the past year."

It continues, "Crane Data's Top 10 Stories of 2023 include: 'Schwab's Crawford Comments on Cash Sorting, Purchase Money Funds' (2/2/23); 'FT on Cash Pouring Into MMFs; MFs Record $5.4T; $9.2 Trillion Uninsured' (3/20/23); 'Fed Hikes Rates 10th Time to 5.0-5.25%' (5/4/23); 'SEC's Money Market Fund Reforms: Swing Pricing Out, More Liquidity In' (7/14/23); 'Money Fund Assets Resume Record Run, Up 20% in 12 Months; Repo Dip' (7/28/23); 'Crane 100 Money Fund Index Breaks 5.0%; WSJ on MF Reforms' (8/1/23); 'European Money Fund Assets Hit Record E1.5 Trillion; Yields Hit 5.15%' (8/22/23); 'Fund Companies Prep for Liquidity Fees Via Filings, Discretionary Fees' (10/26/23); 'HSBC Launches 'P' Purpose Share Class; Cavu Paper on DEI Money Funds' (11/2/23); and, 'Money Fund Assets Hit Record $6.2 Trillion' (11/29/23).

We write in our 2024 Outlook article, "J.P. Morgan published its 'Short-Term Fixed Income 2024 Outlook' last week, which is entitled, 'More of more and less of less.' Authors Teresa Ho, Pankaj Vohra and Holly Cunningham tell us, 'In contrast to the long end of the Treasury curve, it was a remarkably stable year in the money markets. Despite the regional banking crisis, massive T-bill issuance, finalization of MMF reform, all the while with QT going on in the background, spreads in the money markets traded mostly in a narrow range. That stability underscored the abundance of liquidity still in the financial system, most of which seemed to be sitting in the very front end. Indeed, MMF AUMs grew by nearly $1tn this year, with balances currently registering $6tn, as investors could not ignore the 5% yield on an overnight asset, a dynamic we haven't seen since 2007.'"

It tells us, "They continue, 'To be sure, markets have made use of that liquidity, as Fed ON RRP balances declined by a substantial $1.3tn. It helped too that the Fed was nearing the end of its tightening cycle, giving MMFs a reason to rotate out of the facility and into T-bills. As of the time of writing, usage at the Fed ON RRP has fallen below $1tn.'"

Our "CFTC" piece states, "A release entitled, 'CFTC Seeks Public Comment on a Proposal on Investment of Customer Funds' tells us, 'The Commodity Futures Trading Commission ... issued, for public comment, a proposed rule on the Investment of Customer Funds by Futures Commission Merchants and Derivatives Clearing Organizations. The proposal would amend the Commission's regulations governing the safeguarding and investment by futures commission merchants (FCMs) and derivatives clearing organizations of funds held for the benefit of customers engaging in futures, foreign futures, and cleared swaps transactions. The proposed amendments would specifically revise the list of permitted investments in Regulation 1.25 and introduce certain related changes and specifications."

It continues, "The 'Fact Sheet and Q&A' explain, 'Commission Regulation 1.25 permits FCMs to invest funds deposited by customers to margin futures, foreign futures, and cleared swap transactions ('Customer Funds') in specified categories of investments. Regulation 1.25 further permits DCOs to invest Customer Funds that FCMs post with the DCOs as margin for their customers' positions in the same specified categories of investments. Regulation 1.25(a)(1) currently lists seven specific investments that FCMs and DCOs may enter into with Customer Funds: (i) obligations of the U.S. and obligations fully guaranteed as to principal and interest by the U.S.; (ii) general obligations of any State or political subdivision; (iii) obligations of any U.S. government corporation or enterprise sponsored by the U.S.; (iv) certificates of deposit issued by a bank; (v) commercial paper fully guaranteed by the U.S. under the TLGP as administered by the FDIC; (vi) corporate notes and bonds fully guaranteed as to principal and interest by the U.S. under the TLGP; and (vii) interests in money market funds ('MMF').'"

MFI also includes the News brief, "MMMF Assets Surge in November," which says, "Our MFI XLS shows assets jumping $219.8 billion, or 3.6%, to a record $6.281 trillion. YTD, MMFs are up over $1.1 trillion (21.5%) with Taxable Retail MMFs up $557.0 (34.1%) and Taxable Inst MMFs up $544.1 (15.9%). Over 12 months, MMFs are up a massive $1.168 trillion, or 22.8%. Assets continue surging higher in December too, rising by $29.6 billion in the first 5 days of Dec., according to MFI Daily. (We should break the $6.3 trillion level this week.)"

Another News brief, "Money Fund Yields Inch Up to 5.20%," explains, "Yields rose by another basis point in the month ended 11/​30 to 5.20%, as measured by our Crane 100, an average of 7-day yields for the 100 largest taxable money funds."

A third News brief, "Nov. Portfolio Holdings: Treasuries Continue Surge; Repos, Assets Slide," says, "Our latest Money Fund Portfolio Holdings show that Treasury holdings surged in October while Repo fell. Repo declined $329.2 billion but remains the largest portfolio segment. Treasuries jumped by over $175 billion, ranking in the No. 2 spot. In October, U.S. Treasury holdings jumped to $1.929 trillion vs. the Fed RRP's $1.077 trillion (down $400.8 billion). Agencies were the third largest segment, CP remained fourth, ahead of CDs, Other/Time Deposits and VRDNs."

A sidebar, "SSGA Reviews RRP Impact," says, "State Street Global Advisors' recent 'Monthly Cash Review,' tells us, 'As 'higher for longer' starts to bite the economy, we are keeping a close eye on the Fed's Reverse Repo Program (RRP), which is the best example of excess liquidity. The US Federal Reserve (Fed) must 'drain' this liquidity in order to keep market rates in line with its policy rate range.... This outcome was expected -- real yields and term premiums have done much of the work for the Fed (although it cautioned that it was too soon to tell if this was having an impact on economic growth and inflation).'"

Our December MFI XLS, with November 30 data, shows total assets increased $219.8 billion to $6.281 trillion, after decreasing $39.3 billion in October, increasing $77.8 billion in September, $104.2 billion in August, $21.0 billion in July, $20.3 billion in June, $152.7 billion in May, $56.5 billion in April, $345.1 billion in March, $56.0 billion in February, $22.5 billion in January and $70.2 billion in December."

Our broad Crane Money Fund Average 7-Day Yield was up 1 bp to 5.09%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 1 bp to 5.20% in November. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 5.35% and 5.27%, respectively. Charged Expenses averaged 0.37% and 0.26% for the Crane MFA and the Crane 100. (We'll revise expenses on Friday once we upload the SEC's Form N-MFP data for 11/30/23.) The average WAM (weighted average maturity) for the Crane MFA was 34 days (up 3 days from previous month) and the Crane 100 WAM was also up 5 at 35 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

Dec 04
 

Money market fund assets jumping by $1.0 trillion-plus to a record $6.2 trillion was no doubt the biggest story of the year in 2023. With still almost a month to go, money fund asset growth will likely even surpass 2020's Covid-driven record jump of $1.1 trillion. Last year, rising yields were the big news, and yields continuing to rise and breaking 5% were also among the top stories of this year. Other major headlines of the past year included: the long-awaited passage of the SEC's Money Fund Reform Proposal, the continued growth of Social MMFs and the increase in assets and yields in European and worldwide markets. Below, we excerpt from a number of our biggest and most representative news stories of 2023 to highlight the major trends of the past year. (Note: As a reminder, register ASAP for our Money Fund University, Dec. 18-19 in Jersey City, New Jersey, at the Westin Jersey City Newport. Clients and friends are also welcome to stop by Crane Data's Holiday Cocktail Party at MFU on 12/18 from 5-7:30pm!)

Crane Data's Top 10 Stories of 2023 include (in chronological order): "Schwab's Crawford Comments on Cash Sorting, Purchase Money Funds" (2/2/23); "FT on Cash Pouring Into MMFs; MFs Record $5.4T; $9.2 Trillion Uninsured" (3/20/23); "Fed Hikes Rates 10th Time to 5.0-5.25%; Vanguard Newsletter on Cash" (5/4/23); "SEC's Money Market Fund Reforms: Swing Pricing Out, More Liquidity In" (7/14/23); "Money Fund Assets Resume Record Run, Up 20% in 12 Months; Repo Dip" (7/28/23); "Crane 100 Money Fund Index Breaks 5.0%; WSJ Editorial on MF Reforms" (8/1/23); "European Money Fund Assets Hit Record E1.5 Trillion; Yields Hit 5.15%" (8/22/23); "Fund Companies Prep for Liquidity Fees Via Filings, Discretionary Fees" (10/26/23); "HSBC Launches "P" Purpose Share Class; Cavu Paper on DEI Money Funds" (11/2/23); and, "Money Fund Assets Hit Record $6.2 Trillion; Weekly Holdings; Moomoo" (11/29/23).

Our Feb. 2 story, "Schwab's Crawford Comments on Cash Sorting, Purchase Money Funds," discusses the shift from brokerage FDIC-insured sweeps into money funds, and tells readers, "Late last week, Charles Schwab hosted its 'Winter Business Update Agenda,' a week after releasing its Q4'22 earnings the previous week. (See the release, 'Schwab Reports Record Full-year Earnings Per Share.') CFO Peter Crawford <p:>_ comments in the earnings release, '`Net interest revenue reached $10.7 billion, an increase of 33% versus the prior year, as higher interest rates more than offset the impact of balance sheet contraction due to client cash sorting. Lower market valuations throughout the year pushed asset management and administration fees down slightly to $4.2 billion, or 1% year-over-year.'"

Our March 20 story describes cash pouring into money funds after the failure of SVB Bank. The piece, "FT on Cash Pouring Into MMFs; MFs Record $5.4T; $9.2 Trillion Uninsured." It says, "We continue to see a flurry of articles on money market funds and the flight from uninsured bank deposits. The Financial Times published, 'Cash pours into US money market funds as investors flee bank turmoil.' The FT article states, "Investors have funneled cash to US money market funds over the past week amid concerns over the safety of some bank deposits after the collapse of two large lenders. The funds had more than $120bn of net inflows in the week to Wednesday, according to data from the Investment Company Institute, the largest net weekly inflow since June 2020. The bulk of them poured into money market funds backed by government securities, according to the ICI. The cash moved into money market funds -- a type of mutual fund that invests in cash and safe securities -- during a week unsettled by the collapse of Silicon Valley Bank and Signature Bank. On Sunday federal regulators stepped in to protect all depositors from losses at the two lenders.'" See also our March 17 story, "Money Fund Assets Hit Record $5.0 Trillion, Says ICI; Bloomberg on MFs."

In May, we published, "Fed Hikes Rates 10th Time to 5.0-5.25%; Vanguard Newsletter on Cash," which reviews the next to last Fed hike of 2023. It starts, "The Federal Reserve's Open Market Committee raised short-term interest rates for the 10th straight time Wednesday, bringing its Federal funds rate target up a quarter-point to a range of 5.0-5.25%. The release, entitled, 'Federal Reserve issues FOMC statement,' tells us, 'Economic activity expanded at a modest pace in the first quarter. Job gains have been robust in recent months, and the unemployment rate has remained low.... The Committee remains highly attentive to inflation risks.'"

Our July 14 news discussed the latest round of MMF reforms in, "SEC's Money Market Fund Reforms: Swing Pricing Out, More Liquidity In." This piece says, "We continue wading through the SEC's 424-page 'Money Market Fund Reforms' final rules, which were published Wednesday, and we continue to like what we see. (See the MMF Reforms press release here and the Fact Sheet here.) The rule's summary explains, 'The Securities and Exchange Commission is adopting amendments to certain rules that govern money market funds under the Investment Company Act of 1940. These amendments are designed to improve the resilience and transparency of money market funds. The amendments will revise the primary rule that governs money market funds to remove the ability for a fund board to temporarily suspend redemptions if the fund's liquidity falls below a threshold. In addition, the amendments will remove the tie between liquidity thresholds and the potential imposition of liquidity fees. The amendments will also require certain money market funds to implement a liquidity fee framework that will better allocate the costs of providing liquidity to redeeming investors. In addition, the Commission is increasing the daily liquid asset and weekly liquid asset minimum requirements to 25% and 50%, respectively.'"

A July 28 story, "Money Fund Assets Resume Record Run, Up 20% in 12 Months; Repo Dip," also discuss the asset surge. It states, "The Investment Company Institute's latest 'Money Market Fund Assets' report shows MMF assets jumping back to record levels after declining for 3 weeks in a row. ICI's asset series is now poised to break $5.5 trillion and is up $666.4 billion, or 13.8%, over the past 22 weeks. ICI shows assets up by $752 billion, or 15.9%, year-to-date in 2023, with Institutional MMFs up $396 billion, or 13.0% and Retail MMFs up $356 billion, or 21.2%. Over the past 52 weeks, money fund assets have risen $897 billion, or 19.5%, with Retail MMFs rising by $557 billion (37.7%) and Inst MMFs rising by $340 billion (10.9%)."

Our August 1 update, "Crane 100 Money Fund Index Breaks 5.0%; WSJ Editorial on MF Reforms," explains, "Money fund yields rose over the past week, breaking the 5.0% level on average for the first time since August 2007. We expect them to keep rising in coming day and weeks following last Wednesday's 25 basis point hike by the Federal Reserve. Our Crane 100 Money Fund Index (7-Day Yield) was up 8 bps to 5.04% in the week ended Friday, 7/28, after increasing by just 1 bp the past week. Yields are up from 4.94% on June 30, 4.90% on May 31, 4.64% on April 30, 4.61% on March 31, 4.39% on Feb. 28, 4.15% on Jan. 31 and 4.05% on 12/31/22. Almost three-quarters of money market fund assets now yield 5.0% or higher and one fund hit the 5.5% level on Friday."

Later in August, we wrote about a jump in MMF Assets outside the U.S in, "European Money Fund Assets Hit Record E1.5 Trillion; Yields Hit 5.15%." This piece says, "The European Central Bank published, 'Euro area investment fund statistics: second quarter of 2023,' which shows that total European money market mutual fund assets hit a record 1.5 trillion EUR in Q2'23. The statistical release says, 'For shares/units issued by money market funds the outstanding amount was 18 billion EUR higher than in the first quarter. This increase was accounted for by 11 billion EUR in net issuance of shares/units and 8 billion EUR in other changes (including price changes). The annual growth rate of shares/units issued by money market funds, calculated on the basis of transactions, was 11.9% in the second quarter of 2023.'" (See also our Sept. 25 News, "ICI: Worldwide MF Assets Jump in Q2'23 to Almost $10 Trillion; US Leads.")

Our October 26 News piece, "Fund Companies Prep for Liquidity Fees Via Filings, Discretionary Fees," starts off, "Now that the previous regime of emergency gates and liquidity fees has been removed from money market mutual funds (effective Oct. 2), advisors have begun changing disclosures and filing updates to prepare for the new round of pending regulations. As we mentioned in our Oct. 23 Link of the Day, 'Dreyfus Recaps 2a-7 Changes for AFP,' discretionary liquidity fees will become live on April 2, 2024 and mandatory liquidity fees for Prime Institutional MMFs will become active on Oct. 2, 2024. Below, we excerpt from a batch of the latest SEC filings, which shed more light on the rules and how fund managers are handling disclosures. (See the latest filings containing the term 'discretionary liquidity fee' here.)"

We covered the continued growth in Social or D&I share classes (and decline in ESG funds in our November 2 story, "HSBC Launches 'P' Purpose Share Class; Cavu Paper on DEI Money Funds." It states, "HSBC Global Asset Management launched new 'P' share classes for its HSBC US Government Money Market Fund (HGPXX) and US Treasury Money Market Fund (HTPXX), adding them to a growing list of 'D&I' or 'Social' money market fund share class options. A brochure for the funds, entitled, 'Diversity, Equity and Inclusion - The 'P' Share Class,' tells us, 'Our 'P' share class is designed to help investors align their day-to-day cash investment activities with their social ambitions. The share class is dedicated to charitable giving, with a focus on addressing issues at the intersection of gender, racial, and ethnic inequality in our societies. We allocate a proportion of the share class fee to go to select non-profit partners on your behalf.'"

Finally, we cover the year-end surge in MMF assets in "Money Fund Assets Hit Record $6.2 Trillion; Weekly Holdings." This article says, "Money fund assets jumped $22.3 billion on Monday, breaking the $6.2 trillion level for the first time ever and hitting a record $6.200 trillion, according to Crane Data's Money Fund Intelligence Daily series (as of November 27). Money fund assets have risen by $63.2 billion over the past week and by $159.0 billion in the first 27 days of November. Assets fell by $31.9 billion in October after rising by $93.9 billion in September, $98.3 billion in August and $34.7 billion in July. Year-to-date (through 11/27), money fund assets have increased by $1.009 trillion, or 19.4%." (See also our Dec. 1 piece, "ICI Shows MMFs Surge to Record $5.8 Trillion; ICI Trends: Treasuries Up.")

For more 2023 (and soon 2024) News (and prior years going back to 2006), see Crane Data's News Archives. We'll continue to provide daily updates on the money fund marketplace in the coming year, so keep reading our News and Link of the Day commentaries in 2024. Let us know if you need web access (unlimited access is for subscribers only), or if you'd like to see our latest Money Fund Intelligence, Bond Fund Intelligence or MFI Daily publications. Thanks to all of our readers and subscribers for your support in 2023, and we wish you all the best in the coming year. Merry Christmas, Happy Holidays and Happy New Year!