The May issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Friday morning, features the articles: "Crane Data Turns 11; Money Fund Comeback; Bond Push," which talks about Crane Data's 11th Birthday this month, "Still Preserving Capital: American Century's Latchford," which "profiles" ACI's Senior Portfolio Manager and Director of Money Markets, and, "ICI 2017 Fact Book Shows Money Fund Trends in '16," which reviews ICI's latest annual statistics. We have also updated our Money Fund Wisdom database with April 30, 2017, statistics, and sent out our MFI XLS spreadsheet Friday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our May Money Fund Portfolio Holdings are scheduled to ship Tuesday, May 9, and our May Bond Fund Intelligence is scheduled to go out Friday, May 12.
MFI's "Crane Data Turns 11" article says, "Crane Data & Money Fund Intelligence celebrate their 11th birthday this month. As we've done in years past, we'd like to take a moment to take a look back and to update you on our efforts. We continue to gradually expand our collections and product lineup, most recently pushing further into the bond fund space with the launch of our Bond Fund Symposium conference. We'll also soon release a Bond Fund Portfolio Holdings data set."
The piece continues, "Our company, run by money fund expert Peter Crane and technology guru Shaun Cutts, was launched in May 2006 to bring faster, cheaper and cleaner information to the money fund space. We began by publishing our flagship Money Fund Intelligence newsletter, and we've grown to offer a full range of daily and monthly spreadsheets, news, database query systems and reports on U.S. and "offshore" money funds."
Our American Century profile reads, "This month, Money Fund Intelligence profiles American Century Senior Portfolio Manager and Director of Money Markets Denise Latchford, who runs almost $5.7 billion in money funds and even more separately managed cash for the company’s stock and bond funds. We discuss the return to "normalcy" in the money markets, as well as a number of other money fund related issues. Our Q&A follows."
MFI asks, "How long have you managed money funds? Latchford comments, "American Century has been investing money for almost 60 years. The company was founded by James Stowers Jr. in 1958 as Twentieth Century, which later merged with the California-based Benham Group in 1994. We then became American Century Investments.... As far as money market funds go, though, the firm has been involved in these since 1972. That was inception date of Capital Preservation, which I think makes it the oldest money market fund. I've been with the firm over 25 years now."
We also ask, "What is your biggest priority?" Latchford answers, "Right now, we're just really focused on the markets and our funds. We spent a lot of time over the last two years with reform, so it's kind of nice having that behind us.... We have ZIRP behind us as well, and finally have interest rates going up. So, it certainly makes it more fun investing when rates are above 1.0%. I am tired of zero interest rates. With things like this tax reform proposal coming out right now and the new Administration, and possibly a whole new Fed maybe next year ... we have a lot of actual investment-related [topics to focus on]."
Our "ICI 2017 Fact Book Shows" update explains, "ICI's new "2017 Investment Company Fact Book" looks at institutional and retail MMF demand and recent reforms and the shift to Government MMFs. Overall, money funds assets were $2.728 trillion at year-end 2016, making up 16.7% of the $16.3 trillion in overall mutual fund assets. Retail investors held $986 billion, while institutional investors held $1.742 trillion. ICI tells us, "Businesses and other institutional investors also rely on funds. Many institutions use money market funds to manage some of their cash and other short-term assets. Nonfinancial businesses held 22 percent of their short-term assets in money market funds at year-end 2016."
It continues, "On "Demand for Money Market Funds," the Fact Book says, "In 2016, investors redeemed, on net, $30 billion from money market funds. This modest topline net outflow for the year, however, masks significant shifts in flows for different types of money market funds that was spurred by the final implementation of new rules governing money market funds. In 2016, government money market funds received $851 billion in net inflows, while prime and tax-exempt money market funds saw net redemptions of $765 billion and $116 billion."
In a sidebar, we discuss, "Lower Waivers in Q1 Earnings," saying, "Northern Trust, Schwab, and BNY Mellon all mentioned money funds in their Q1 earnings reports earlier this month. Northern Trust's Q1'17 earnings said, "Trust, investment and other servicing fees increased primarily due to favorable equity markets, new business, and lower money market mutual fund fee waivers." Fee waivers here decreased from $1.7 million a year ago to nothing in Q1'17."
Our May MFI XLS, with April 30, 2017, data, shows total assets increased $68.9 billion in April to $2.676 trillion after decreasing $25.2 billion in March, and increasing $51.5 billion in February. (Note that we added $67.3 billion in new funds, though, so assets were roughly flat on the month.) Our broad Crane Money Fund Average 7-Day Yield was up 5 bps to 0.46% for the month, while our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 4 bps to 0.65% (7-day).
On a Gross Yield Basis (7-Day) (before expenses were taken out), the Crane MFA rose 0.07% to 0.88% and the Crane 100 rose 5 bps to 0.93%. Charged Expenses averaged 0.43% and 0.28% for the Crane MFA and Crane 100, respectively. The average WAM (weighted average maturity) for the Crane MFA was 32 days (down 1 day from last month) and for the Crane 100 was 33 days (down 2 days from last month). (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
