The April issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Monday morning, features the articles: "MMFs Break $5.6 Trillion on SVB, Deposit Super Surge," which discusses the huge inflows coming from uninsured deposits; "Northern's LaRocco, Fidelity's Pope on MMF Inflows at BFS," which quotes from our recent Bond Fund Symposium; and, "ICI Worldwide MMFs Jump in Q4, Led by US, Ireland, France," which covers recent data on money fund markets outside the U.S. We also sent out our MFI XLS spreadsheet Monday a.m., and we've updated our Money Fund Wisdom database with 3/31/23 data. Our April Money Fund Portfolio Holdings are scheduled to ship on Wednesday, April 12, and our April Bond Fund Intelligence is scheduled to go out on Monday, April 17.
MFI's "MMFs Break $5.6 Trillion" article says, "Money fund assets, which had already been hitting record levels earlier this year, skyrocketed in March as the failure of Silicon Valley Bank raised concerns over uninsured bank deposits. Crane Data's MFI XLS shows money fund assets increasing by $345.1 billion to a record $5.613 trillion, their 3rd largest increase ever. (Only March and April 2020 show bigger gains, when MMFs jumped $688.1 billion and $471.2 billion, respectively.)
The piece continues, "Year-to-date through 3/31/23, money fund assets have increased by $444.5 billion, or 8.6%, and over 12 months assets have increased by $565.1 billion, or 11.2%. Our MFI Daily shows assets continuing to increase in April, rising by $28.2 billion to a record $5.638 trillion. (Note: MFI Daily's assets series differs slightly from our monthly MFI XLS series.)
Our BFS "profile" piece states, "Two and a half weeks ago, we hosted our latest Crane's Bond Fund Symposium in Boston. The only session focusing on cash, "Money Funds & Conservative Ultra‐Shorts," featured our Peter Crane along with Northern Trust Asset Management's Dan LaRocco and Fidelity's Kerry Pope. We excerpt from this segment below. (Thanks again to those who attended and supported BFS, and attendees and Crane Data subscribers may access the Powerpoints, recordings and conference materials at the bottom of our "Content" page or via our Bond Fund Symposium 2022 Download Center.)"
It continues, "Pope comments, 'We've certainly benefiting from all the turmoil within the banking sector. Each and every day you wake up, there's new money coming in, new accounts being opened. So we've got a lot of tailwinds right now. The good thing is that we're actually able to earn some money on it.... A few years ago in the zero-rate environment, we were having to waive fees all over the place. So now it's a good combination of being able to recognize the fees, plus the volume.'"
Our "ICI Worldwide" piece states, "The Investment Company Institute published, 'Worldwide Regulated Open-Fund Assets and Flows, Fourth Quarter 2022,' which shows that money fund assets globally jumped by $550.7 billion, or 6.6%, in Q4'22 to $8.856 trillion. The increases were led by sharp jumps in money funds in U.S., Ireland, France and Luxembourg. Meanwhile, only money funds in Brazil were lower. MMF assets worldwide increased by $22.4 billion, or 0.3%, in the 12 months through 12/31/22; money funds in the U.S. now represent 53.9% of worldwide assets."
MFI states" "ICI's release says, 'Worldwide regulated open-end fund assets increased 7.1% to $60.15 trillion at the end of the fourth quarter of 2022, excluding funds of funds.... The Investment Company Institute compiles worldwide regulated open-end fund statistics on behalf of the International Investment Funds Association (IIFA), the organization of national fund associations. The collection for the fourth quarter of 2022 contains statistics from 46 jurisdictions.'"
MFI also includes the News brief, "Fed Hikes to 4.75-5.0%; Yields 4.6%. A release, 'Federal Reserve issues FOMC statement,’ says, '[T]he Committee decided to raise the target range for the federal funds rate to 4-3/4 to 5%.' Our Crane 100 Money Fund Index (7-Day Yield) rose 24 bps to 4.61%."
Another News brief, "NY Fed on MMFs, Rates," tells us, "The post, 'Monetary Policy Transmission and the Size of the Money Market Fund Industry: An Update,' tells us, 'The size of the money market fund industry co-moves with the monetary policy cycle.'"
A sidebar, "Vanguard's Smith on MMFs," states, "Vanguard writes 'Tried and true money markets get boost with rising rates,' which summarizes, 'Nafis Smith, principal and head of Vanguard's taxable money markets, discusses money markets in a rising interest rate environment, the stress tests behind Vanguard's stability mandate, and how a low fee structure advantages money market portfolios.'"
Another sidebar, "Yellen Hits MMFs in Speech," states, "Treasury Secretary Janet Yellen said in a recent speech, 'As we strengthen the banking sector, we are also making progress on one of FSOC's top priorities: mitigating vulnerabilities in nonbank financial intermediation. Many of these nonbank institutions engage in liquidity and maturity transformation: they profit by issuing short-term obligations while investing in riskier and longer-term assets. But they are generally not regulated to account for spillovers to the rest of the financial system during times of ... stress.'"
Our March MFI XLS, with March 31 data, shows total assets increased $345.1 billion to $5.613 trillion, after increasing $56.0 billion in February, $22.5 billion in January, $70.2 billion in December and $55.4 billion in November. MMFs rose $42.2 billion in October, $1.7 billion in September, $2.3 billion in August, $26.0 billion in July and $31.9 billion in June. They decreased $10.7 billion in May and $74.3 billion in April. MMFs increased $24.1 billion last March.
Our broad Crane Money Fund Average 7-Day Yield was up 21 bps to 4.46%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 22 bps to 4.61% in March. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 4.76% and 4.72%, respectively. Charged Expenses averaged 0.38% and 0.27% for the Crane MFA and the Crane 100. (We'll revise expenses on Tuesday once we upload the SEC's Form N-MFP data for 3/31/23.) The average WAM (weighted average maturity) for the Crane MFA was 17 days (unchanged from previous month) while the Crane 100 WAM was up 1 at 15 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
