The April issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "Pending Reforms Trigger Prime Shift: Federated, Vanguard Go," which covers the budding exodus from Prime Institutional MMFs; "Bond Fund Symposium '24: Ultra-Shorts Look for Bounce," which quotes from our recent ultra-short bond fund conference; and, "Worldwide MF Assets Break $10 Trillion in '23; US Leads," which reviews ICI's latest global money fund statistics. We also sent out our MFI XLS spreadsheet Friday a.m., and we've updated our Money Fund Wisdom database with 3/31/24 data. Our April Money Fund Portfolio Holdings are scheduled to ship on Tuesday, April 9, and our April Bond Fund Intelligence is scheduled to go out on Friday, April 12.
MFI's "Prime Shift" article says, "Federated Money Market Trust is the first Prime Institutional MMF to announce its liquidation ahead of the latest round of SEC MMF Reforms. Vanguard and American Funds filed to convert two large internal money funds as well, and we'll no doubt see more moves over the next several months. The SEC's asset totals ... show Prime MMFs representing $1.4 trillion (as of 2/29/24), or 21.5%, of the $6.5 trillion in total MMFs, with Inst Public totaling $342 billion, Inst Nonpublic totaling $332 billion and Prime Retail totaling $733 billion."
It continues, “A Prospectus Supplement filing for the $1.2 billion Federated Hermes Money Market Obligations Trust, including the Inst (MMPXX), Capital (MMLXX) and Eagle Shares (MMMXX), tells us, 'On Feb. 15, 2024, the Board of Trustees of Federated Hermes Money Market Obligations Trust approved a Plan of Liquidation for the Federated Hermes Institutional Money Market Management pursuant to which the Fund will be liquidated on or about July 12, 2024.... In approving the Liquidation, the Board determined the Liquidation is in the best interests of the Fund and its shareholders. Accordingly, the Fund's investment adviser will take all action necessary to liquidate, dissolve, and wind up the affairs of the Fund.'"
We write in our Bond Fund article, "We recently hosted our latest Crane's Bond Fund Symposium in Philadelphia. Below, we quote from the 'Senior Portfolio Manager Perspectives,' which featured J.P. Morgan Asset Management's Dave Martucci, UBS A.M.'s Dave Rothweiler and PIMCO's Jerome Schneider. (Thanks again to those who supported BFS. Crane Data subscribers may access the recordings and conference materials at the bottom of our 'Content' page or via our 'Bond Fund Symposium 2024 Download Center.')"
It tells us, "Rothweiler comments, 'Looking back to 2022-2023, you had competition from the money funds with higher yields [and] stable NAVs, ... and people pushing to go longer duration. So you were getting hit from both ends.... The Street just doesn't have the balance sheet they used to have. [When] everyone runs out the door at the same time, liquidity is of the utmost importance.'"
Our "Worldwide" piece states, "The Investment Company Institute published, 'Worldwide Regulated Open-Fund Assets and Flows, Fourth Quarter 2023,' recently, which shows that money fund assets globally jumped by $497.0 billion, or 5.1%, in Q4'23 to $10.441 trillion. The increases were led by a sharp jump in money funds in U.S., while Ireland, Luxembourg, France and China also rose. Meanwhile, money funds in Argentina and Belgium were lower. MMF assets worldwide increased by $1.585 trillion, or 19.1%, in the 12 months through 12/31/23, and money funds in the U.S. now represent 56.7% of worldwide assets."
It continues, "ICI's release says, 'Worldwide regulated open-end fund assets increased 8.6% to $68.85 trillion at the end of the fourth quarter of 2023, excluding funds of funds.... [ICI] compiles worldwide regulated open-end fund statistics on behalf of the International Investment Funds Association (IIFA).... The collection for the fourth quarter of 2023 contains statistics from 45 jurisdictions.'"
MFI also includes the News brief, "MMF Assets Dip in March, Rebound to Record $6.538 Trillion on April 2." It states, "Money fund assets fell by $66.7 billion to $6.407 trillion in March, but they've soared by $140.3 billion in the first 2 days of April. Over the past 12 months, money funds have risen by $778 billion, or 13.8%, with Retail MMFs jumping $531.5 billion (29.2%) and Inst MMFs rising by $236.7 billion (6.4%)."
Another News brief, "BlackRock Launches Tokenized MF," comments, "A release entitled, 'BlackRock Launches Its First Tokenized Fund, BUIDL, on the Ethereum Network,' says, 'BlackRock unveil[ed] its first tokenized fund issued on a public blockchain, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). BUIDL will provide qualified investors with the opportunity to earn U.S. dollar yields by subscribing to the Fund through Securitize Markets, LLC.'"
A third News brief, "ICI: MMF Expense Ratios 0.22% in '23," says, "The Investment Company Institute published, 'Trends in the Expenses and Fees of Funds, 2023,' which tells us, 'Average expense ratios of hybrid and bond mutual funds, as well as money market funds, have ... declined meaningfully since 1996.' A table shows expense ratios by type from 1996 to 2023 and shows bonds fund averages falling from 0.84% to 0.37% over this period and money fund ratios falling from 0.52% to 0.22%. (Note: Crane Data shows the average expense ratio for money market mutual funds at 0.26% as of 2/29/24 as measured by our Crane 100 Money Fund Index.)"
A sidebar, "WSJ on Wall of Cash Bulls," says, "The Wall Street Journal writes, 'Sorry Stock Bulls, the 'Wall of Cash' Isn't All Headed Your Way.' They explain, 'Trillions of dollars are seemingly available to move out of cash funds and be put to work in the stock market. That possibility has had stock-market bulls salivating, but they are probably in for disappointment. Despite the expectation that the Federal Reserve's next move is to cut rates, money-market-fund assets have continued to grow at a fast pace. They are now around $6.5 trillion, according to industry tracker Crane Data. While the S&P 500 is up 8% year to date, total money funds added more than $150 billion in assets through the first two months of 2024, or about $50 billion more than they did in the same period last year, according to Crane.'"
Our April MFI XLS, with March 31 data, shows total assets decreased $66.7 billion to $6.407 trillion, after increasing $50.0 billion in February, $87.0 billion in January, $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 and $56.5 billion in April."
Our broad Crane Money Fund Average 7-Day Yield was down 1 bp to 5.03%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 1 bp to 5.14% in March. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 averaged 5.40% and 5.41%, respectively. Charged Expenses averaged 0.37% and 0.26% for the Crane MFA and the Crane 100. (We'll revise expenses on Monday once we upload the SEC's Form N-MFP data for 3/31/24.) The average WAM (weighted average maturity) for the Crane MFA was 37 days (down 1 bp from previous month) and the Crane 100 WAM was down 2 bps at 38 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
