As Democrats descend on Denver to kick off their convention this week, a number of mutual fund professionals will also head to the mountains, to Matrix Financial Solutions' annual "Get Connected" conference in Keystone, Colorado. Crane Data's Peter Crane and Matrix's Michael Rice will give a presentation on Monday morning entitled, "The State of the Money Fund Business & Money Market Portal Update."
Crane will say, as regular readers of www.cranedata.com are aware, that the state of the money fund industry is strong, but in serious flux. Money funds have been through their most eventful year in history the past 12 months. They've seen almost 20 advisor bailouts, though none resulted in any funds "breaking the buck" or halting redemptions, and money funds are seeing a `new, unprecedented level of scrutiny. But this will likely recede as the risk to money funds fades, Crane will argue. Meanwhile, money funds, which have seen inflows of near $1 trillion and continue to reach new records, will continue to grow briskly due to their record of safety and due to a sudden lack of "cash" alternatives.
The talk will also discuss Crane's most recent estimates of the size of the money market mutual fund online trading portal marketplace -- $350 billion, or 15% of the overall $2.334 trillion institutional money fund market. While portal growth has surged alongside money fund growth, growing competition and a backlash over portals' involvement with enhanced cash funds present challenges to providers. In addition, the pair will talk about recent technology, content and feature enhancements on portals, and the expansion of portals into the bank trust sector by offerings such as the Matrix Money Market Portal.
Regarding Matrix's portal, Rice cites diversification, information and execution as three keys. He says, "Banks trust departments need access to sweep vehicles that provide same-day liquidity.... The alternative is to use a 'portal' that provides access to a variety of money market products using a web-based interface. Portals provide execution, settlement and performance analysis in a single interface, which streamlines and simplifies the process for delivery of trade instructions and allows for 'single wire' settlement of all transactions."
"What's happening is that the majority of money market platforms are targeting large corporations directly and leaving the banks largely under-served," says John Moody, President of Matrix Settlement and Clearance Services. "We want to give our bank customers the ability to take sweep and liquidity management to the next level, giving them the tools to service smaller public and privately held companies, and do it through the bank branch." To request a copy of Crane and Rice's Powerpoint, e-mail pete@cranedata.com.
