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The Investment Company Institute published its latest weekly "Money Market Fund Assets" report Thursday, which shows money market mutual fund dipping lower to $6.144 trillion in the latest week after huge jump the prior week. Assets have risen in 10 of the last 12 weeks, increasing by $176.0 billion (or 2.9%) since April 24. MMF assets are up by $258 billion, or 5.4%, year-to-date in 2024 (through 7/10/24), with Institutional MMFs up $71 billion, or 7.3% and Retail MMFs up $187 billion, or 11.2%. Over the past 52 weeks, money funds have risen by $690 billion, or 12.7%, with Retail MMFs up by $455 billion (22.5%) and Inst MMFs rising by $235 billion (6.8%). The weekly release says, "Total money market fund assets decreased by $10.30 billion to $6.14 trillion for the eight-day period ended Wednesday, July 10, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $19.02 billion and prime funds increased by $9.53 billion. Tax-exempt money market funds decreased by $815 million." ICI's stats show Institutional MMFs falling $14.0 billion and Retail MMFs rising $3.7 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.957 trillion (80.7% of all money funds), while Total Prime MMFs were $1.057 trillion (17.2%). Tax Exempt MMFs totaled $130.5 billion (2.1%). ICI explains, "Assets of retail money market funds increased by $3.74 billion to $2.48 trillion. Among retail funds, government money market fund assets decreased by $1.16 billion to $1.57 trillion, prime money market fund assets increased by $5.39 billion to $783.79 billion, and tax-exempt fund assets decreased by $493 million to $118.74 billion." Retail assets account for over a third of total assets, or 40.3%, and Government Retail assets make up 63.6% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $14.04 billion to $3.67 trillion. Among institutional funds, government money market fund assets decreased by $17.86 billion to $3.38 trillion, prime money market fund assets increased by $4.14 billion to $273.48 billion, and tax-exempt fund assets decreased by $322 million to $11.77 billion." Institutional assets accounted for 59.7% of all MMF assets, with Government Institutional assets making up 92.2% of all institutional MMF totals. According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $44.3 billion in July (through 7/10) to $6.533 trillion. They hit a record $6.551 trillion on 7/2 but have since eased off a bit. Assets rose by $15.7 billion in June and $91.4 billion in May, but they fell $15.8 billion in April and $68.8 billion in March. They rose $72.1 billion in February, $93.9 billion in January, $32.7 billion in December and $226.4 billion in November. MMF totals fell by $31.9 billion in October. They rose $93.9 billion in September, $98.3 billion in August and $34.7 billion in July. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $400 billion lower than Crane's asset series.

The Public Funds Investment Institute posted a piece entitled, "Cash and Short-Term Portfolios Had Strong Returns in the First Half of the Year." It tells us, "LGIP yields have been locked around the Federal Funds rate. They are within a few basis points of their levels at the start of the year and likely will not move until the Fed changes its federal funds target. The challenge that LGIP managers face is that the money market yield curve has provided little advantage to extending maturities.... That is likely the reason managers have kept weighted average maturities in the low to mid 30-day range even if they believe the Fed will reduce rates later this year." The brief continues, "The spread between the PFII Prime LGIP Index and the government index has narrowed from 22 basis points in January to 16 basis points last week. Investing in commercial paper and negotiable CDs offers a smaller advantage than it did for much of 2023. Investors have once again discounted concerns about creditworthiness and liquidity and the risk premium for these instruments has shrunk." The site adds, "S&P reports that the stable value LGIPs it rates added about $35 billion in assets this year. As we noted in a recent Beyond the News piece, public unit investment assets are growing very slowly and managers seem to be favoring liquid investments like LGIPs with the objective of building liquidity in the face of financial uncertainty.... Separate portfolios have lagged cash, but returns have been solid. The PFII 1–3-year model portfolio returned 1.47% for the first six months of the year (that is an annual rate of 2.97%) and 4.93% for the prior 12 months. This lags returns on cash/LGIPs of 5.25% to 5.45%, but portfolios with maturities of two to four years -- the PFII model has a duration of 1.64 -- will maintain their income for a longer period if/when the Fed cuts rates."

The website SustainableInvest.com writes that "Focused sustainable MMKT funds are disappearing while sustainable MMKT funds expand" in its latest "Chart of the Week." They tell us, "Focused sustainable money market fund assets are disappearing while non-focused sustainable money market funds are expanding along with conventional money fund assets.... Investors have been powering up the assets of money market funds to record levels since the Federal Reserve Bank began raising interest rates, reaching $6.15 trillion as of July 2nd around quarter-end and the holiday weekend, according to the Investment Company Institute. The Fed has raised the federal funds rate eleven times from near zero since March 2022 to a range between 5.25% and 5.5% on July 24, 2023, in an effort to cool the economy and bring down the rate of inflation. Short-term rates at these levels are at their highest in two decades and money market fund investors are currently realizing 12-month yields that have reached as high as 5.5% at the end of June. Almost 50% of funds at the end of June are recording 12-month yields equal to or greater than 5%." The site states, "At the same time, the number and assets of focused sustainable money market mutual funds are disappearing. The number of funds and assets under management of focused sustainable money market mutual funds have been shrinking. These are funds classified by Morningstar as sustainable money market funds in large part on the basis that they explicitly describe a fund's sustainable investing approach or strategy in the fund's prospectus within its investment objective and investment policy or Statement of Additional Information (SAI). `The segment now consists of just three funds/17 share classes, largely institutional prime funds. However, the segment continues to decline further. DWS has announced the termination and liquidation of the DWS ESG Liquidty Fund on or about August 14, 2024 while BlackRock has disclosed that the BlackRock Liquid Environmentally Aware Fund will liquidate on or about September 5, 2024. Following these liquidations, and assuming no new focused sustainable fund formations, the segment will be reduced to just one fund -- the BlackRock Wealth Liquid Environmentally Aware Fund and its five share classes. The fund considers factors such as emissions, energy and water intensity, waste generation, green revenues and environmental disclosure levels in evaluating the environmental performance of an issuer or guarantor." The brief adds, "While focused sustainable money market funds have now been reduced to just one fund offering, retail and institutional investors have other sustainable money market fund options beyond focused money funds. According to Crane Data, there are currently 14 firms offering 47 funds/share classes that systematically integrate financially material ESG factors into their investment decisions (along with other relevant factors) with the goal of managing risk and improving long term returns and/or offer dedicated share classes that screen out particular types of sectors or companies or that meet specific sustainable investment goals, such as social goals. For example, the Federated Hermes Government Obligations Fund SDG share commits to donating, via Federated Hermes and/or its affiliates, 5% of the quarterly management fee revenue and administrative fee revenue attributable to the SDG class, net of any waivers to a designated organization whose mission is aligned with one or more of the United Nations Sustainable Development Goals (UN SDGs). With a combined total of $99 billion in net assets, up from $87.8 billion at the end of 2021, these funds/share classes are largely offered to institutional investors, but they are also available to retail investors either directly or through financial intermediaries."

Money fund yields inched one basis point lower to 5.12% on average (as measured by our Crane 100 Money Fund Index, an average of 7-day yields for the 100 largest taxable money funds) in the week ended July 5. Yields were 5.13% on 6/28, 5.14% on 5/31, 5.13% on 4/30, 5.14% on 3/31 and 2/29/24, 5.17% on 1/31/24, 5.20% on 12/31/23, 4.94% on 6/30/23, 4.61% on 3/31/23 and 4.05% on 12/31/22. The vast majority of money market fund assets now yield 5.0% or higher. Assets of money market funds rose by $44.5 billion last week to $6.533 trillion according to Crane Data's Money Fund Intelligence Daily. Weighted average maturities were unchanged last week at 34 days. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 710), shows a 7-day yield of 5.02%, down 1 bp in the week through Friday. Prime Inst MFs were down 1 bp to 5.17% in the latest week. Government Inst MFs were down 1 bp at 5.11%. Treasury Inst MFs were down 2 bps to 5.05%. Treasury Retail MFs currently yield 4.84%, Government Retail MFs yield 4.82%, and Prime Retail MFs yield 5.02%, Tax-exempt MF 7-day yields were down 63 bps to 3.00%. According to Monday's Money Fund Intelligence Daily, with data as of Friday (7/5), 4 money funds (out of 830 total) yield under 3.0% with $28 million in assets, or 0.0%; 114 funds yield between 3.00% and 3.99% ($125.6 billion, or 1.9%), 261 funds yield between 4.0% and 4.99% ($1.347 trillion, or 20.8%) and 451 funds now yield 5.0% or more ($5.016 trillion, or 77.3%). Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.62%. The latest Brokerage Sweep Intelligence, with data as of June 28, shows that there was no changes over the past week. six weeks prior we saw the removal of TD Ameritrade from the listings pushed the averages higher (2 bps). Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley. (Note: seven weeks ago we removed rates for TD Ameritrade from BSI since it completed its merger with Charles Schwab.)

A Prospectus Supplement for Federated Hermes Institutional Prime Obligations Fund (Institutional Shares, POIXX, and Service Shares, PRSXX) tells us, "Effective August 1, 2024, the above-named fund, a portfolio of Federated Hermes Money Market Obligations Trust, will implement a change to the Fund's valuation policy whereby the Fund will no longer use the 'amortized cost' method of valuing its portfolio securities with remaining maturities of 60 Days or less ('60 Day Security'), which provides that a 60 Day Security's amortized cost value is approximately the same as its fair market value determined without the use of amortized cost based on certain factors ('shadow price' or 'shadow pricing'). The Fund will instead price all portfolio securities, including 60 Day Securities, using the fair market value. The change in valuation policy will streamline the Fund's operational processes impacted by certain components of the recent amendments to Rule 2a-7 under the Investment Company Act of 1940, as amended ('Rule 2a-7') (as further described below) and is not anticipated to have a material impact on the valuation of the Fund. Accordingly, effective August 1, 2024, all disclosures related to amortized cost valuation are deleted in their entirety." It continues, "In July 2023, the U.S. Securities and Exchange Commission ('SEC') adopted amendments ('2023 Amendments') to Rule 2a-7 and certain requirements thereunder. Under the 2023 Amendments, the Fund may impose discretionary liquidity fees on redemptions subject to a determination by the Fund's Board, or its delegate, that such a liquidity fee is in the Fund's best interests. If the Fund's Board, including a majority of the independent Trustees, or its delegate, determines that imposing a liquidity fee is in the Fund's best interests, the Fund will impose a discretionary liquidity fee not to exceed 2% of the value of the shares redeemed. Such determination, including the timing of the application of the liquidity fee, will be based on current market conditions and the Fund's particular circumstances. The discretionary liquidity fee would be applied to all Fund redemptions and would remain in effect until the Fund's Board, or its delegate, determines that the fee is no longer in the Fund's best interests." Federated writes, "The 2023 Amendments also provide that, effective October 2, 2024, pursuant to Rule 2a-7, the Fund is required to impose a mandatory liquidity fee when the Fund experiences daily net redemptions that exceed 5% of net assets based on flow information available within a reasonable period after the last computation of the Fund's net asset value on that calendar day. The Fund will not be required to apply a mandatory liquidity fee if the amount of the fee is less than 0.01% of the value of the shares redeemed. If the Fund imposes a liquidity fee, depending on how the redemption order is communicated, the proceeds delivered may be for an amount that is less than the original redemption. Imposition of discretionary or mandatory liquidity fees will be reported to Fund shareholders on the Fund's website or by press release and will be reported to the SEC on Form N-MFP." They add, "Effective October 2, 2024, Fund shares purchased and redeemed must be transmitted to the Fund on a gross basis (i.e., purchase orders must be transmitted separately from redemption orders)." Federated also made a similar filing for its Federated Hermes Institutional Tax-Free Cash Trust," which states, "Effective August 1, 2024, the above-named fund, a portfolio of Federated Hermes Money Market Obligations Trust, will implement a change to the Fund's valuation policy whereby the Fund will no longer use the 'amortized cost' method of valuing its portfolio securities with remaining maturities of 60 Days or less ('60 Day Security'), which provides that a 60 Day Security's amortized cost value is approximately the same as its fair market value determined without the use of amortized cost based on certain factors."

UBS Asset Management published an article titled, "Money market funds: Why their appeal is set to endure as rates fall." It states, "Money market funds offer a range of advantages for use as collateral in financial transactions. Their appeal may expand if proposed regulatory changes are implemented. Money market funds (MMFs) in general, and government and Treasury MMFs in particular, are high-quality, actively managed investments that typically hold low-risk securities such as Treasury bills and other government-issued bonds, and in some cases, repurchase agreements (repo) backed by these instruments. These funds are usually run in a way that ensures they have a stable or constant net asset value (CNAV) of US$1 per share, and they offer investors a high level of liquidity and safety of principal." The piece continues, "Treasury and government MMFs offer a range of advantages for use as collateral in financial transactions: 1. Lower haircuts (typically 2% of pledged value): When assets are used as collateral in financial transactions, they are normally subject to a haircut -- a percentage discount on their market value that reflects the risk inherent in the asset.... While securities with shorter maturity dates than noted above may have lower haircuts, they still require monitoring and rebalancing due to changes in market value, whereas MMF haircuts remain constant.... 2. Lower ongoing management and administrative burden: Managing a MMF position as collateral is also significantly easier than with other eligible assets.... As such, MMFs can be considered a viable solution for investors who are looking to reduce the administrative burden attached to collateral management." It adds, "3. Interest-rate exposure management across the cycle: The ability of MMF managers to adjust the duration -- the interest-rate sensitivity -- by adjusting the weighted average maturity (WAM) of the portfolio can deliver benefits when rates are rising as well as falling.... Being able to raise, maintain, or capture yields as rates change while also maintaining a stable NAV level is a key benefit of MMFs. 4. Greater trading flexibility: The use of repo in MMFs enables these vehicles to accommodate late-day purchases, including large purchases that Treasury-only funds are unable to facilitate. This results in later cutoff times for MMFs that use repo, something that offers significantly greater flexibility for investors looking to use such funds as margin collateral." Finally, it discusses, "Plans to relax rules on the use of MMFs as collateral," saying, "In mid-2023, the Commodities Futures Trading Commission (CFTC) announced plans to broaden the type of MMFs that could be used as initial margin collateral in derivatives trading. The regulator said it wanted to end the ban on MMFs that use repo and other forms of securities lending from being used as initial margin collateral in commodity futures transactions. These changes are set to increase the appeal of the asset class even further. As interest rates on both sides of the Atlantic have risen to their highest levels in 15 years, inflows into MMFs have increased: figures published at the start of 2024 showed that MMF assets in the US rose by US$1.1 trillion in 2023 to reach a total of US$6 trillion.... In addition, allowing MMFs to use repo would more closely align the CTFC with its global counterparts, most of which currently allow for funds using repo as eligible collateral for their markets. For firms with multinational domains, this development is likely to provide a broader and more simplified solution. Whatever the outcome of the CFCT's proposals, MMFs offer a wide range of advantages to market participants looking for collateral for initial margin trading and other forms of risk-management transactions. These benefits should see their popularity endure across the market cycle, even in a falling interest-rate environment."

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of June 28) includes Holdings information from 61 money funds (down 12 from a week ago), or $2.974 trillion (down from $3.132 trillion) of the $6.489 trillion in total money fund assets (or 45.8%) tracked by Crane Data. (Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our June 12 News, "June Money Fund Portfolio Holdings: Repo Remains No. 1, Assets Jump.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.347 trillion (up from $1.250 trillion a week ago), or 45.3%; Repurchase Agreements (Repo) totaling $1.140 trillion (down from $1.253 trillion a week ago), or 38.3%, and Government Agency securities totaling $238.8 billion (down from $273.7 billion), or 8.0%. Commercial Paper (CP) totaled $89.6 billion (down from a week ago at $118.4 billion), or 3.0%. Certificates of Deposit (CDs) totaled $67.0 billion (down from $84.2 billion a week ago), or 2.3%. The Other category accounted for $59.0 billion or 2.0%, while VRDNs accounted for $33.4 billion, or 1.1%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.347 trillion (45.3% of total holdings), Fixed Income Clearing Corp with $265.1B (8.9%), the Federal Reserve Bank of New York with $200.9 billion (6.8%), Federal Home Loan Bank with $183.5B (6.2%), JP Morgan with $84.8B (2.9%), BNP Paribas with $70.9B (2.4%), Citi with $65.6B (2.2%), RBC with $54.3B (1.8%), Federal Farm Credit Bank with $52.5B (1.8%) and Goldman Sachs with $49.7B (1.7%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($251.5B), Goldman Sachs FS Govt ($233.1B), JPMorgan 100% US Treas MMkt ($204.1B), Fidelity Inv MM: Govt Port ($196.2B), Morgan Stanley Inst Liq Govt ($143.6B), BlackRock Lq FedFund ($142.2B), Fidelity Inv MM: MM Port ($128.9B), State Street Inst US Govt ($125.7B), Allspring Govt MM ($117.6B) and BlackRock Lq Treas Tr ($114.8B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)

Money fund yields were up 1 bp at 5.13% on average (as measured by our Crane 100 Money Fund Index) in the week ended June 28, after falling 2 basis points four weeks ago. Our Crane 100 is an average of 7-day yields for the 100 largest taxable money funds. Yields were 5.13% on 4/30, 5.14% on 3/31 and 2/29/24, 5.17% on 1/31/24, 5.20% on 12/31/23, 4.94% on 6/30/23, 4.61% on 3/31/23 and 4.05% on 12/31/22. The vast majority of money market fund assets now yield 5.0% or higher. Assets of money market funds rose by $6.1 billion last week to $6.489 trillion according to Crane Data's Money Fund Intelligence Daily. Weighted average maturities were unchanged last week. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 710), shows a 7-day yield of 5.03%, up 1 bp in the week through Friday. Prime Inst MFs were unchanged at 5.18% in the latest week. Government Inst MFs were up 1 bp at 5.12%. Treasury Inst MFs were up 1 bp at 5.07%. Treasury Retail MFs currently yield 4.85%, Government Retail MFs yield 4.83%, and Prime Retail MFs yield 5.03%, Tax-exempt MF 7-day yields were up 29 bps at 3.63%. According to Monday's Money Fund Intelligence Daily, with data as of Friday (6/28), 4 money funds (out of 830 total) yield under 3.0% with $28 million in assets, or 0.0%; 114 funds yield between 3.00% and 3.99% ($125.6 billion, or 1.9%), 261 funds yield between 4.0% and 4.99% ($1.347 trillion, or 20.8%) and 451 funds now yield 5.0% or more ($5.016 trillion, or 77.3%). Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.62%. The latest Brokerage Sweep Intelligence, with data as of June 28, shows that there was no changes over the past week. six weeks prior we saw the removal of TD Ameritrade from the listings pushed the averages higher (2 bps). Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley. (Note: seven weeks ago we removed rates for TD Ameritrade from BSI since it completed its merger with Charles Schwab.)

A [press release titled, "Moody's Ratings assigns Aaa-mf ratings to three Pictet short-term VNAV money market funds," tells us, "Moody's Ratings (Moody's) has assigned Aaa-mf ratings to Pictet - Short Term Money Market GBP, Pictet Sovereign ST MMF EUR, and Pictet Sovereign ST MMF USD, short-term variable net asset value (VNAV) money market funds domiciled in Luxembourg. The Funds' primary objective is to preserve capital, provide high liquidity, and achieve a return in line with the money market rates.... The Aaa-mf rating on Pictet - Short Term Money Market GBP reflects this Fund's very strong ability to meet its objectives of providing liquidity and preserving capital. Pictet - Short Term Money Market GBP's Aaa-mf rating is underpinned by the Fund's portfolio high credit quality and liquidity, strong asset profile, and low exposure to market risk." The release explains, "The Pictet - Short Term Money Market GBP invests in a diversified portfolio of short-term securities, instruments, and obligations that are of high credit quality at the time of purchase. While this Fund may also invest in currencies other than GBP, any such exposures are hedged against foreign exchange risk. We expect the Fund to benefit from further investor base diversification as it expands in size. The Aaa-mf ratings on Pictet Sovereign ST MMF EUR and Pictet Sovereign ST MMF USD funds reflect these Funds' very strong ability to meet their objectives of providing liquidity and preserving capital. The Funds' ability to meet their objectives is supported by the high credit quality and liquidity of their underlying investments, their strong asset profile, and low exposure to market risk." Pictet adds, "The Pictet - Short Term Money Market GBP was launched in May 2023 while the Pictet Sovereign ST MMF EUR and the Pictet Sovereign ST MMF USD were launched in June 2008. The investment manager of the Funds is Pictet Asset Management SA, which is a part of the asset management arm of Pictet Group. The investment manager had CHF 230 bn in assets under management as of 30 September 2023."

Morningstar writes on "How Investors Can Outpace the Returns of Money Market Funds." They ask PIMCO's Jerome Schneider, "[H]ow attractive, for example, are money markets these days relative to other short-term opportunities?" Schneider responds, "[I]t's a $6 trillion question at this point in time, given the amount of assets that have flown into money markets over the past years. Listen, there's a great amount of opportunity for investors to be defensive and in fact safe by earning 5% plus or minus in money market and T-bill-like investments. We fully understand that, as investors, and understanding why people want to have that beautiful triumvirate of capital preservation, liquidity management, with some positive return for once. But what we also are finding is that there's a revealing aspect of fixed income right now that if you move just slightly beyond the money market space into that zero to one-year space in a more diversified portfolio, away from Treasury bills, away from money market strategies, that you can have additional opportunities through earning additional income as well as being senior in different opportunities for corporate bonds as well as asset-backed securities, which are quite attractive." He continues, "And it puts a total return metric well above 6% at this point in time without taking much interest-rate exposure at this point in time. Said a little bit differently, if investors have the horizon and comfort to put money to work over the course of the next six months of the year, effectively they can capture liquidity premiums, which allow them to earn and outpace the returns in a total return format versus being in a money market fund. And that's really the attractive spot that we haven't seen in quite a few years, perhaps dating back to 2015 when short-term strategies became once again in focus in a higher rate cycle." Schneider explains, "This, too, now lends itself to be very relevant for investors who want to be in that 6% to 8% returns without having a lot of aspects of taking a lot of risk, managing interest-rate exposure at the front of the curve, but yet having the time horizon to put money to work over the next few months or the next few quarters, there's attractive ways to do that. And so we would encourage, effectively, investors to tier their cash, think about what they need for same-day liquidity, keep that in money market funds, AAA rated, government guaranteed type of obligations, but to the extent they can tier their cash over the next few quarters, it makes it a very attractive opportunity whether you're an individual investor, a corporate cash CFO, or even a pension or foundation, if the opportunities are there to create those diversified portfolios away from the traditional mindset of cash management."

The Wall Street Journal writes that, "Americans Chasing High Interest Rates Risk Falling Into a 'Cash Trap'." The article says, "Americans have poured money into cash-like investments since the Fed began raising interest rates, driving assets in money-market funds to a record $6.12 trillion earlier this month, according to the Investment Company Institute. Now, Wall Street traders are betting rates have peaked and those investors face a choice: keep sitting on their cash as interest payments shrink, or figure out how to redeploy the money. Deciding when and how to rebalance a portfolio is challenging even for pros, and depends on factors including a person's age, savings and expected needs. But staying on the sidelines risks missing out on years of potential gains from holding a broad portfolio of stocks, bonds and other riskier investments. J.P. Morgan Asset Management calls it the 'cash trap.'" They quote Vanguard's John Croke, "If you've owned cash for the last year and a half, that view in the rearview mirror is pretty attractive and you feel good about yourself. But you have to remind yourself that that's the rearview mirror." The piece tells us, "Croke said long-term investors should return to a diversified bond portfolio so they can lock in attractive long-term yields before the Fed starts cutting rates . Savers might find that hard, with short-term rates at 5.25% to 5.5%, their highest level in two decades.... The decision could cost ... over the long run. Since the end of 2021, the Vanguard Federal Money Market Fund has returned 9.1% through the end of May. The S&P 500, meanwhile, rose 15.1% over the same period when including price changes and dividend payments. The Bloomberg U.S. Aggregate bond index has lost 9.7%, according to Dow Jones Market Data." The Journal piece adds, "Some investors cite reasons other than attractive interest rates for sticking to cash.... But investors shouldn't try to time the markets or invest based on their emotions, said David Kelly, chief global strategist at J.P. Morgan Asset Management. 'People generally feel negative and pessimistic,' he said. 'If they invest based on how they feel, they are going to hang on to cash forever.'"

Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of June 21) includes Holdings information from 73 money funds (up 5 from a week ago), or $3.132 trillion (up from $3.126 trillion) of the $6.483 trillion in total money fund assets (or 48.3%) tracked by Crane Data. (Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our June 12 News, "June Money Fund Portfolio Holdings: Repo Remains No. 1, Assets Jump.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.250 trillion (down from $1.407 trillion a week ago), or 39.9%; Repurchase Agreements (Repo) totaling $1.253 trillion (up from $1.195 trillion a week ago), or 40.0%, and Government Agency securities totaling $273.7 billion (up from $256.0 billion), or 8.7%. Commercial Paper (CP) totaled $118.4 billion (up from a week ago at $93.4 billion), or 3.8%. Certificates of Deposit (CDs) totaled $84.2 billion (up from $66.8 billion a week ago), or 2.7%. The Other category accounted for $110.9 billion or 3.5%, while VRDNs accounted for $42.0 billion, or 1.3%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.250 trillion (39.9% of total holdings), Fixed Income Clearing Corp with $307.1B (9.8%), Federal Home Loan Bank with $199.3B (6.4%), the Federal Reserve Bank of New York with $123.3 billion (3.9%), Citi with $87.3B (2.8%), JP Morgan with $81.8B (2.6%), BNP Paribas with $77.5B (2.5%), Federal Farm Credit Bank with $71.4B (2.3%), RBC with $71.3B (2.3%) and Bank of America with $54.2B (1.7%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($251.1B), Goldman Sachs FS Govt ($228.8B), JPMorgan 100% US Treas MMkt ($208.1B), Fidelity Inv MM: Govt Port ($198.6B), Federated Hermes Govt ObI ($156.7B), Morgan Stanley Inst Liq Govt ($151.7B), Fidelity Inv MM: MM Port ($130.0B), State Street Inst US Govt ($124.3B), Allspring Govt MM ($117.5B) and Dreyfus Govt Cash Mgmt ($112.6B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)

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