The October issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "Money Funds Still Eating Bank Deposits' Lunch; Trillion Shift," which reviews the dramatic move in assets into MMFs; "Cash Spirits High at European MF Symposium in Edinburgh," which quotes sessions from our recent offshore conference; and, "Worldwide MMFs Jump in Q2'23, Just Shy of $10 Trillion," which reviews the shifts in MMF assets around the world. We also sent out our MFI XLS spreadsheet Friday a.m., and we've updated our Money Fund Wisdom database with 9/30/23 data. Our October Money Fund Portfolio Holdings are scheduled to ship on Wednesday, October 11, and our October Bond Fund Intelligence is scheduled to go out on Monday, October 16. (Note: Crane Data and U.S. money market funds will be closed for the Columbus Day Holiday Monday, Oct. 9.)
MFI's "Money Funds Still Eating" article says, "Money market mutual fund assets continued to surge higher in September, and bank deposits continued to decline. MMFs hit a record $6.095 trillion last month (and broke the $6.1 trillion level on 10/3), while deposits declined to $17.3 trillion (as of 9/20/23). Year to date, MMFs have increased by $922.5 billion, or 18.3%, and over the past year they've jumped by $1.049 trillion, or 21.3%. (Bank deposits have fallen by $701.3 billion since 8/22.)
It continues, "Barron's writes, 'Bank Deposits Plunged in the Past Year. Schwab Took the Biggest Hit.' They comment, 'Banks have had an unusually rough year. Just how bad is evident in a new report from S&P Global Market Intelligence. Total deposits across U.S. banks fell 4.8%, or $872 billion, to $17.27 trillion as of June 30, according to S&P Global. The drop was the first in a data set that dates back to 1994. Among the top 15 deposit holders, Charles Schwab reported the largest year-over-year decrease in deposits of 31.1% to $304.79 billion, according to S&P Global which attributed the decline mostly to outflows from brokerage accounts.'"
We write in our Cash Spirits High article, "Crane Data recently hosted its 9th annual European Money Fund Symposium in Edinburgh, Scotland, which featured two days of discussions on offshore money funds denominated in USD, EUR and GBP. Veronica Iommi, Secretary General of IMMFA, the Institutional Money Market Funds Association, presented on 'The State of MMFs in Europe,' and told the audience, 'Let's take a look at the current money market fund landscape.... Total money market fund assets under management in Europe at the end of June were €1.5 trillion euro equivalent, according to the ECB.... The industry is growing very strongly. In fact, it's almost doubled in the last 10 years.'"
It continues: "She explains, 'Approximately 40% ... of the market is predominantly VNAV funds, and these are mostly euro-denominated French, Standard funds. The other 60% consist of IMMFA funds (Short-Term, AAA-rated) and they're shown by currency. U.S. dollar accounts for the largest share, followed by sterling and then euro.... So the two segments of the European markets [are] VNAV, domiciled and largely sold in France, and IMMFA funds, overwhelmingly stable NAV, now domiciled in Ireland and Luxembourg, and sold across Europe and globally.'"
Our "Worldwide MMFs" piece states, "ICI's 'Worldwide Regulated Open-Fund Assets and Flows, Second Quarter 2023' shows that money fund assets globally jumped by $257.9 billion, or 2.7%, in Q2'23 to $9.719 trillion. The increases were led by a sharp jump in money funds in U.S., while India, France, Mexico and Luxembourg also rose. Meanwhile, money funds in China and Ireland were lower. MMF assets worldwide increased by $1.237 trillion, or 14.6%, in the 12 months through 6/30/23, and money funds in the U.S. now represent 56.1% of worldwide assets."
It explains, "ICI's release says, 'Worldwide regulated open-end fund assets increased 3.1% to $65.07 trillion at the end of the second quarter of 2023, excluding funds of funds. Worldwide net cash inflow to all funds was $461 billion in the second quarter, compared with $667 billion of net inflows in the first quarter of 2023. The Investment Company Institute compiles worldwide regulated open-end fund statistics on behalf of the International Investment Funds Association (IIFA).... The collection for the second quarter of 2023 contains statistics from 46 jurisdictions."
MFI also includes the News brief, "Dreyfus Launches SPARK Shares. A press release, 'Dreyfus Launches SPARK Shares of Dreyfus Government Cash Management,' tells us, 'The share class allows clients to drive change with their liquidity investments by directing a donation to an eligible non-profit organization of their choice.'"
Another News brief, "MarketWatch: Inst to Join MMF Inflows. Their piece, says, 'Like Taylor Swift, assets in money-market funds keep setting records this year. But a key group of investors [institutions] isn't even leading the charge, said Deborah Cunningham, CIO, global liquidity markets at Federated Hermes.'"
A third News brief, "Morgan Stanley Liquidates Tax-Exempts," says, "Two recent Prospectus Supplements announced the liquidations of Morgan Stanley California Tax-Free Daily Income Trust and Morgan Stanley Tax-Free Daily Income Trust."
A sidebar, "Bloomberg: MFs Rake in Cash," says, "Bloomberg published, 'The Higher-for-Longer Interest-Rate Bonanza,' which is subtitled, 'With yields passing 5%, money-market funds rake in cash while banks fail to keep pace.' They tell us, 'With the US Federal Reserve keeping interest rates pinned around zero for most of the past 15 years, depositors grew resigned to earning virtually nothing on their cash.... A turning point came in the spring. Thanks to the Fed's inflation-fighting interest-rate hikes, people started to see they could earn 4% or more on their money.'"
Our October MFI XLS, with September 30 data, shows total assets increased $77.8 billion to a record $6.095 trillion, after increasing $104.2 billion in August, $21.0 billion in July, $20.3 billion in June, $152.7 billion in May, $56.5 billion in April, $345.1 billion in March, $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 last October.
Our broad Crane Money Fund Average 7-Day Yield was up 2 bps to 5.06%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 2 bps to 5.18% in September. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 5.34% and 5.25%, respectively. Charged Expenses averaged 0.37% 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 9/30/23.) The average WAM (weighted average maturity) for the Crane MFA was 27 days (up 3 days from previous month) and the Crane 100 WAM was also up 3 at 26 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
