Money Fund Yields, Sweeps Higher
Our flagship Crane 100 Money Fund Index 7-Day Yield Average rose by 4 basis points to 1.23% in the week ended Friday, 7/8, after rising 4 basis points the previous week and 27 basis points the week before that. Money market fund yields have more than doubled from their level of 0.58% on May 31, and they're up from 0.21% on April 29, 0.15% on March 31 and 0.02% on February 28 (where they'd been for almost 2 years prior). Brokerage sweep rates also moved higher again over the past week as RW Baird and Ameriprise Financial Services moved rates higher. Our latest Brokerage Sweep Intelligence shows brokerages now paying an average of 0.15% on FDIC insured deposits, up from 0.04% a month ago (and 0.01% two months ago). We review the latest money fund and brokerage sweep yields below. The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 671), shows a 7-day yield of 1.05%, unchanged in the week through Friday. The Crane Money Fund Average is up 58 bps from 0.47% at the beginning of June. Prime Inst MFs were down 1 bp to 1.27% in the latest week, and up 63 bps since the start of June (close to double from the month prior). Government Inst MFs rose by 2 bps to 1.14%, they are up 59 bps since the start of June. Treasury Inst MFs unchanged for the week at 1.06%, up 55 bps since the beginning of June. Treasury Retail MFs currently yield 0.81%, (down 1 bp for the week, and up 51 bps since June), Government Retail MFs yield 0.85% (up 4 bp for the week, and up 57 bps since June started), and Prime Retail MFs yield 1.06% (down 4 bps for the week, and up 59 bps from beginning of June), Tax-exempt MF 7-day yields rose by 2 bps to 0.56%, they were up 15 bps since the start of June. Our Crane Brokerage Sweep Index, the average rate for brokerage sweep clients (most of which are swept into FDIC insured accounts; only Fidelity sweeps to a money market fund), inched higher to 0.15%. This follows increases over the past several weeks but also follows 2 straight years of yields at 0.01%. Sweep yields were 0.12% on average at the end of 2019 and 0.28% on average at the end of 2018. The latest Brokerage Sweep Intelligence, with data as of July 1, shows numerous changes over the previous week. Our latest Brokerage Sweep Intelligence reports that RW Baird hiked its Insured Deposit Sweep Program to 0.37% for balances under $250K, to 0.42% for balances between $250K and $1 million, to 0.54% for balances between $1 million and $2 million and to 0.71% for balances of $5 million and more. We also show that Ameriprise Financial Services increased rates to 0.08% for balances under $100K, to 0.09% for balances between $100K and $250K, to 0.11% for balances between $250K and $1 million, to 0.13% for balances between $1 million and $5 million and to 0.15% for balances of $5 million and more for the week ended July 8. Just four of 11 major brokerages still offer rates of 0.01% for balances of $100K (and most other tiers). These include: E*Trade, Merrill Lynch, Morgan Stanley, and UBS. According to Monday's Money Fund Intelligence Daily, with data as of Friday (7/8), just 23 funds (out of 818 total) still yield 0.00% or 0.01% with assets of $8.8 billion, or 0.2% of total assets. (This compares to 593 funds with $2.623 trillion yielding 0.00% or 0.01% at the beginning of the year.) There were 88 funds yielding between 0.02% and 0.49%, totaling $69.2B, or 1.4% of assets; 259 funds yield between 0.50% and 0.99% with $465.1 trillion in assets, or 9.3%; 189 funds yield between 1.00% and 1.24% with $1.574 trillion in assets or 31.6%; 218 funds yielded between 1.25% and 1.49% with $2.479 trillion or 49.7%; and 41 funds yielded over 1.50% ($388.5 billion, or 7.8%).
