A press release issued late yesterday entitled, "Federated Investors, Inc. Announces Plans for Institutional Prime and Tax-free Money Market Funds," maps out the latest phase of the 4th largest money fund provider's reform strategies. It says, "Federated Investors, one of the nation's largest investment managers, today announced further refinements to its plan to restructure the company's line of money market funds by delineating which money market funds will be categorized as institutional money market funds under Rule 2a-7 of the Investment Company Act of 1940 and compliant with regulations issued by the U.S. Securities and Exchange Commission (SEC) in July 2014. Federated announced refinements to its government and retail money market funds in February and June 2015." (See our Feb. 20 News, "Federated Announces Changes; Targets Floating MMFs That Won't Float, and our June 5 News, "Federated Announces Retail Money Fund Plan, Streamlines MF Lineup.") Below, we also review our latest Money Fund Market Share rankings.
The release explains, "Federated expects to offer the four institutional money market funds ... Federated Money Market Management, Federated Prime Obligations Fund, Federated Prime Value Obligations Fund, and Federated Tax-Free Trust. Each of the funds ... beginning on Oct. 14, 2016, will have an initial net asset value of $1.0000 that may fluctuate, as well as required provisions for fees and gates. The funds may offer a potential yield premium, when compared to government money market funds."
Federated adds, "The company also continues to work with institutional clients to consider options for various institutional floating net asset value money market funds, as well as separate accounts and stable value collective funds, in an effort to better meet their liquidity needs. The company also plans to begin offering a stable value private fund for qualified investors in the first quarter of 2016.... Refinements to Federated's money market fund product line will continue to evolve as market, client or regulatory changes/guidance occur before the Oct. 14, 2016, final compliance date for the 2014 money market fund rules."
J. Christopher Donahue, president and chief executive officer, comments, "As a result of an active dialogue with our sizeable and varied client base, Federated will offer four Rule 2a-7 money market funds designed specifically for institutional investors. Federated, as a leading provider of liquidity services for the last four decades, continues to work with our clients in an effort to meet their liquidity needs today and in the future."
In other news, Crane Data's latest Money Fund Intelligence Family & Global Rankings, which rank the market share of managers of money market mutual funds in the U.S. and globally, was sent out to shareholders last week. The November edition, with data as of Oct. 31, 2015, shows asset increases for the majority of US money fund complexes in the latest month as well as over the past 3 months. Assets increased by $53.6 billion overall, or 2.0%, in October; over the last 3 months, assets are up $53.7 billion, or 2.1%. For the past 12 months through Oct. 31, total assets are up $96.0 billion, or 3.8%. Below, we review the latest market share changes and figures. (Note: Crane Data's November Money Fund Intelligence was released Nov. 6, and our latest Money Fund Portfolio Holdings was released Nov. 10.)
The biggest gainers in October were Wells Fargo, Goldman Sachs, BlackRock, JP Morgan, and SSgA, rising by $10.7 billion, $9.1B, $8.4B, $7.7B, and $7.1 billion, respectively. BlackRock, SSgA, Wells Fargo, Fidelity, and JP Morgan had the largest increases over the 3 months through Oct. 31, 2015, rising by $15.9 billion, $14.2B, $11.8B, $11.3B, and $5.1B, respectively. (Our domestic U.S. "Family" rankings are available in our MFI XLS product, our global rankings are available in our MFI International product, and the combined "Family & Global Rankings" are available to our Money Fund Wisdom subscribers.)
Over the past year through Sept. 30, 2015, BlackRock showed the largest asset increase (up $28.3B, or 14.3%), followed by Fidelity (up $17.6B, or 4.4%), Morgan Stanley (up $16.0B, or 14.7%), JP Morgan (up $15.8B, or 6.4%), and SSgA (up $11.0B, or 13.6%). Other asset gainers for the year include: Wells Fargo (up $10.3B, or 9.3%), Vanguard (up $5.1B, or 2.9%), Northern (up $5.0B, 6.6%), First American (up $3.4B, 8.7%), Goldman Sachs ($3.2B, 2.2%), and Franklin (up $2.8B, or 13.1%). The biggest decliners over 12 months include: BofA (down $4.8B, or 8.8%), Schwab (down $4.1B, or 2.5%), Invesco (down $3.4B, or 5.8%), RBC (down $1.4B, or 7.7%), and American Funds (down $795M, or 4.9%). (Note that money fund assets are volatile month to month.)
Our latest domestic U.S. money fund Family Rankings show that Fidelity Investments remains the largest money fund manager with $421.6 billion, or 16.0% of all assets (up $4.0 billion in October, up $11.3B over 3 mos., and up $17.6B over 12 months). Fidelity was followed by JPMorgan with $262.3 billion, or 10.0% market share (up $7.7B, up $5.1B, and up $15.8B for the past 1-month, 3-mos. and 12-mos., respectively). BlackRock remained the third largest MMF manager with $225.4 billion, or 8.6% of assets (up $8.4B, up $15.9B, and up $28.3B). (BlackRock should become the 2nd largest manager once it acquires BofA's approximately $49.8B in money market fund assets early next year; see our Nov. 3 News, "BlackRock Taking Over BofA MMFs in One of Biggest Acquisitions Ever.") Federated Investors was fourth with $208.0 billion, or 7.9% of assets (up $1.8B, up $1.7B, and down $587M). Vanguard remained in fifth place with $177.2 billion, or 6.7%, (up $1.4B, up $3.2B, and up $5.1B).
The sixth through tenth largest U.S. managers include: Dreyfus ($161.9B, or 6.1%), Schwab ($159.5B, 6.1%), Goldman Sachs ($146.3B, or 5.6%), Morgan Stanley ($124.9B, or 4.7%), and Wells Fargo ($121.8B, or 4.6%). The eleventh through twentieth largest U.S. money fund managers (in order) include: SSgA ($91.4B, or 3.5%), Northern ($80.9B, or 3.1%), Invesco ($55.3B, or 2.1%), BofA ($49.8B, or 1.9%), Western Asset ($45.8B, or 1.7%), First American ($42.4B, or 1.6%), UBS ($37.6B, or 1.4%), Deutsche ($32.3B, or 1.2%), Franklin ($23.8B, or 0.9%), and RBC ($16.5B, or 0.6%), which displaced American Funds from the top 20. Crane Data currently tracks 67 U.S. MMF managers, one less than last month. (William Blair exited the space, liquidating its lone MMF, William Blair Ready Reserve. See our Oct. 28 News, "Pioneer, Nationwide Converting Prime to Govt; 2 More Exit MMF Space.")
When European and "offshore" money fund assets -- those domiciled in places like Dublin, Luxembourg, and the Cayman Islands -- are included, the top 10 managers match the U.S. list, except for Goldman moving up to No. 4 (dropping Vanguard to 7), and Wells Fargo moving to 10, dropping SSgA to 12 in the Global rankings. Looking at the largest Global Money Fund Manager Rankings, the combined market share assets of our MFI XLS (domestic U.S.) and our MFI International ("offshore"), the largest money market fund families are: Fidelity ($428.6 billion), JPMorgan ($390.6 billion), BlackRock ($325.2 billion), Goldman Sachs ($230.0 billion), and Federated ($216.5 billion).
Dreyfus/BNY Mellon ($186.0B), Vanguard ($177.2B), Schwab ($159.5B), Morgan Stanley ($144.5B), and Wells Fargo ($122.7B) round out the top 10. As previously mentioned, Wells Fargo moved up from 12 to 10, displacing SSgA, which dropped to 12, and moving ahead of Western, which remained in 11. These totals include offshore US Dollar money funds, as well as Euro and Pound Sterling (GBP) funds converted into US dollar totals.
Finally, our November 2015 Money Fund Intelligence and MFI XLS show that both net and gross yields ticked up October. The Crane Money Fund Average, which includes all taxable funds covered by Crane Data (currently 820), remained at 0.02% for both the 7-Day Yield and the 30-Day Yield (annualized, net) Average. The Gross 7-Day Yield and 30-Day Yield were 0.18% (up one basis point from last month). Our Crane 100 Money Fund Index shows an average 7-Day and 30-Day Yield of 0.05%, up from 0.04% in September. Also, our Crane 100 shows a Gross 7-Day and 30-Day Yield of 0.21% (unchanged). For the 12 month return through 10/31/15, our Crane MF Average returned 0.02% and our Crane 100 returned 0.03%. The number of funds dropped to 820, from 822 last month.
Our Prime Institutional MF Index (7-day) yielded 0.06% (unchanged), while the Crane Govt Inst Index was at 0.02% (unchanged). The Crane Treasury Inst, Treasury Retail, Govt Retail Index, and Prime Retail Indexes all yielded 0.01%. The Crane Tax Exempt MF Index also yielded 0.01%. The Gross 7-Day Yields for these indexes were: Prime Inst 0.26% (up from 0.25% last month), Govt Inst 0.13% (unchanged), Treasury Inst 0.09% (unchanged), and Tax Exempt 0.09% (unchanged) in September. The Crane 100 MF Index returned on average 0.00% for 1-month, 0.01% for 3-month, 0.03% for YTD (up 1 bp), 0.03% for 1-year, 0.03% for 3-years (annualized), 0.04% for 5-year, and 1.33% for 10-years. (Contact us if you'd like to see our latest MFI XLS, Crane Indexes file or market share numbers.)
