Daily Links Archives: January, 2026
Money Fund Yields Inch Down to 3.51%
Money fund yields (7-day, annualized, simple, net) decreased by 2 bps to 3.51% on average during the week ended Friday, January 16 (as measured by our Crane 100 Money Fund Index), after decreasing 5 bps the week prior. Fund yields should inch lower in coming days as they digest the last of the Fed's Dec. 10 25 bps rate cut. Yields were 3.58% on 12/31/25, 3.78% on 11/30, 3.90% on 10/31, 3.94% on 9/30, 4.11% on 8/31, 4.12% on 7/31, 4.13% on 6/30, 4.14% on 3/31/25 and 4.28% on average on 12/31/24. MMFs averaged 4.75% on 9/30/24, 5.10% on 6/28/24, 5.14% on 3/31/24 and 5.20% on 12/31/23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 681), shows a 7-day yield of 3.41%, down 2 bps in the week through Friday. Prime Inst money fund yields were down 1 bp at 3.62% in the latest week. Government Inst MFs were down 2 bps at 3.51%. Treasury Inst MFs were down 1 bp at 3.46%. Treasury Retail MFs currently yield 3.24%, Government Retail MFs yield 3.22% and Prime Retail MFs yield 3.42%, Tax-exempt MF 7-day yields were down 36 bps to 1.03%. Money market mutual fund assets rose by $5.7 billion on Tuesday (1/6), hitting a new record high of $8.165 trillion after breaking the $8.1 trillion barrier for the first time ever on 12/26, according to our Money Fund Intelligence Daily. Assets have fallen $59.0 billion in the week through Friday and they've decreased by $24.7 billion in January month-to-date (through 1/16). MMF assets increased by $126.3 billion in December, $132.8 billion in November, $142.1 billion in October, $105.2 billion in September and $132.0 billion in August. They rose by $63.7 billion in July, $6.7 billion in June and $100.9 billion in May. But MMFs decreased $24.4 billion in April. Assets increased by $2.8 billion in March, $94.2 billion in February, and $52.8 billion last January. Weighted average maturities were at 39 days for the Crane MFA and 41 days the Crane 100 Money Fund Index. According to Tuesday's Money Fund Intelligence Daily, with data as of Friday (1/16), 158 money funds (out of 791 total) yield under 3.0% with $195.1 billion in assets, or 2.4%; 633 funds yield between 3.00% and 3.99% ($7.889 trillion, or 97.6%); and now zero funds yield over 4.0%. Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.30%, after falling 1 basis point four weeks prior. The latest Brokerage Sweep Intelligence, with data as of January 16, shows one change over the past week. RW Baird increased rates to 1.04% for accounts between $1K and $999K, to 1.61% for accounts of $1M to $1.9M and to 2.08% for accounts of $5M and greater. Four of the 10 major brokerages tracked by our BSI offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch, Morgan Stanley and Schwab.
BNY Mellon Q4 Earnings Call Quotes
BNY Mellon (BK) reported 4th quarter earnings last week (see the earnings call transcript here, and CEO Robin Vince comments, "BNY has a rich 241-year history of innovation, from issuing the first loan to the U.S. government to becoming the first U.S. GSIB to offer digital asset custody. Our focus on innovating new products and solutions is centered on building trusted market infrastructure for the long term and serving our clients in new and evolving ways, including increasing delivery of new capabilities connecting the traditional and digital asset worlds. This past quarter, for example, we launched the Dreyfus Stablecoin Reserves Fund, a government money market fund designed to support stablecoin issuers and institutional participants to manage eligible reserve assets, providing BNY's cash and liquidity solutions expertise to the growing digital payments ecosystem. Our recently announced tokenized AAA CLO strategy in partnership with Securitize brings high-rated structured credit product onto the blockchain, with BNY serving as sub-advisor and custodian of the underlying assets. And just last week, we announced that we have taken the first step in our strategy to tokenize deposits by enabling the on-chain mirrored representation of client deposit balances on our digital assets platform." He also says, "Investment management and performance fees were down 2%, reflecting the mix of AUM flows and lower performance fees, partially offset by higher market values and the weaker dollar. Net interest income was up 15%, primarily driven by the reinvestment of maturing investment securities at higher yields and balance sheet growth, partially offset by deposit margin compression.... Average deposit balances increased by 4% sequentially, reflecting 4% growth in interest-bearing and 1% growth in non-interest-bearing deposits. Average interest-earning assets were up 3% quarter over quarter. Cash and reverse repo balances increased by 4%, loans increased by 5%, and investment securities portfolio balances increased by 2%." During the Q&A, BNY was asked about "your newly launched tokenized deposit capabilities and ... institutional demand for the offering." Vince responds, "We're in the business of moving, storing, and managing money. So we think we're particularly well-positioned to connect the traditional and the digital rails to really be able to enable clients. Our roadmap has really been, right from the beginning, focus on the innovation, be able to bring the capabilities online, that first with digital asset custody, stablecoin enablement. You just mentioned the tokenized deposits.... A client might want to open up a new share class in parallel to their traditional share classes. Maybe they want to open up a tokenized share class, we can do that as well. It really is these two things working in concert that we think unlocks new possibilities. We see the value of the improved efficiency, reducing friction that is real value here. When you click in, stablecoins and tokenized deposits are just two examples of all of that. Stablecoins providing the on-chain settlement currency, which is very necessary and is, frankly, because their stable value probably better than some of the other alternatives."
ICI: MMF Assets Fall to $7.73 Trillion
The Investment Company Institute's latest weekly "Money Market Fund Assets" report shows money fund assets falling by $74.7 billion to $7.729 trillion, after increasing by $70.8 billion the previous week to a record $7.804 trillion. Assets have risen in 14 of the last 17 weeks and 22 of the past 26 weeks. MMF assets are up by $868 billion, or 12.6%, over the past 52 weeks (through 1/14/26), with Institutional MMFs up $545 billion, or 13.3% and Retail MMFs up $323 billion, or 11.7%. Year-to-date, MMF assets are also up by $879 billion, or 12.8%, with Institutional MMFs up $533 billion, or 13.0% and Retail MMFs up $346 billion, or 12.6%. ICI's weekly release says, "Total money market fund assets decreased by $74.74 billion to $7.73 trillion for the week ended Wednesday, January 14, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $72.13 billion and prime funds increased by $1.52 billion. Tax-exempt money market funds decreased by $4.13 billion." ICI's stats show Institutional MMFs decreasing $55.8 billion and Retail MMFs decreasing $19.0 billion in the latest week. Total Government MMF assets, including Treasury funds, were $6.346 trillion (82.1% of all money funds), while Total Prime MMFs were $1.234 trillion (16.0%). Tax Exempt MMFs totaled $149.4 billion (1.9%). It explains, "Assets of retail money market funds decreased by $18.95 billion to $3.08 trillion. Among retail funds, government money market fund assets decreased by $12.65 billion to $1.95 trillion, prime money market fund assets decreased by $1.98 billion to $1.00 trillion, and tax-exempt fund assets decreased by $4.32 billion to $135.18 billion." Retail assets account for 39.9% of the total, and Government Retail assets make up 63.1% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $55.79 billion to $4.65 trillion. Among institutional funds, government money market fund assets decreased by $59.49 billion to $4.40 trillion, prime money market fund assets increased by $3.51 billion to $233.30 billion, and tax-exempt fund assets increased by $192 million to $14.26 billion." Institutional assets accounted for 60.1% of all MMF assets, with Government Institutional assets making up 94.7% of all institutional MMF totals. According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have decreased by $5.1 billion to $8.104 trillion month-to-date in January (as of 1/14); they hit a record high of $8.165 trillion on 1/6. Assets increased by $126.3 billion in December, $132.8 billion in November, $142.1 billion in October, $105.2 billion in September and $132.0 billion in August. They rose $63.7 billion in July, $6.7 billion in June and $100.9 billion in May. MMFs fell by $24.4 billion in April, but rose $2.8 trillion in March, $94.2 billion in February and $52.8 billion last January. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're almost $400 billion lower than Crane's asset series.
PFII on CA, NY, NH and PA LGIPs
The Public Funds Investment Institute (PFII) writes on "LGIPs: New Pools and Manager Changes." They explain, "In October 2024 we wrote about local government investment pools changing managers. It's unusual but not unheard of in the LGIP business. Sometimes an LGIP simply replaces a manager and sometimes local governments band together to create a new fund to bring in a manager or expand competition in a state. We've seen both recently." The PFII writes, "California: CalFIT (California Fixed Income Trust) is a new LGIP that began offering a stable value portfolio in the fall. It invests in government and high grade corporate and bank obligations and is managed by Chandler Asset Management, a California based firm that entered the LGIP business in 2024 when it replaced Public Trust Advisors as manager of the FL SAFE LGIP in Florida. As of December 31, 2025, CalFIT reported $331 million in assets. California has a long-established state-sponsored and three other local-sponsored LGIPs. Large states are well able to support multiple LGIPs. California joins Florida and Texas in this regard." The piece continues, "New York: The EPIC Fund, (Empire Public Investment Cooperative Fund of New York) is in creation. It is sponsored by the Association of Towns and will be managed by US Bank's PFM Asset Management organization. S&P Global issued a rating for the new fund (AAAm) in December. The rating describes the fund as seeking to maintain a stable asset value by investing only in U.S. government obligations, repurchase agreements and collateralized bank deposits. Other New York LGIPs are managed by Dreyfus, a division of BNY, and PTMA Financial Solutions.... New Hampshire: The State-sponsored Public Deposit Investment Pool replaced PFM Asset Management with PTMA Investment Advisors (a successor by merger to Public Trust Advisors and PMA Advisors) after it issued a request for proposals in May 2025 for investment management, record keeping administration and custody services. The fund also replaced US Bank as custodian with UMB Bank. PFM Asset Management had managed the fund since 2015. The fund offers a prime-type stable value portfolio. It reported $679 million in assets in September 2025." Finally, the add, "Pennsylvania: The state sponsored Invest LGIP outsourced its investment management late in 2025 to Federated Hermes, Inc. For the first 20 plus years of existence Invest was managed and distributed by state Treasury staff. It is the smallest of three LGIPs in the state with $1.4 billion in assets (as of October 2025) invested in prime portfolios managed with the objective of maintaining a stable value. It offers a Daily Pool for local governments and a Community Pool for nonprofit organizations."
Western Adds Tokenized MMF Class
A press release titled, "Franklin Templeton Prepares Institutional Money Market Funds for Tokenized Finance," and subtitled, "Franklin Templeton retrofits two Western Asset funds for GENIUS Act compliance and blockchain-based distribution," tells us, "Franklin Templeton ... announced that two institutional money market funds managed by its affiliate Western Asset Management are now eligible for use in two major segments of the evolving market for tokenized money market funds: one supporting stablecoin issuers in the regulated stablecoin reserves under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, and the other acting as a distribution product across blockchain-enabled platforms. These changes underscore Franklin Templeton's focus on leveraging blockchain-based technologies to enhance traditional investment vehicles." Matt Jones, Franklin Templeton's Head of Institutional Liquidity, comments, "The Western Asset Liquidity business has long focused on helping clients move forward without choosing between innovation and managing risk. Being early only matters if you do it responsibly, and these updates prove how we can help institutions adopt tokenized infrastructure with products they already know." The release explains, "The updates apply to two existing traditional Rule 2a-7 government money market funds and are intended for Western Asset Management to continue meeting the needs of its institutional clients and distribution partners as the market for delivery of digital products evolves. These changes will enable institutional investors to use both funds more effectively across two major applications: stable reserve management and blockchain-enabled intermediary distribution.... The Western Asset Institutional Treasury Obligations Fund has been updated to align with the reserve requirements of the GENIUS Act ... and now invests exclusively in U.S. Treasuries with maturities of 93 days or less. The change positions the fund to support stablecoin reserve management as institutional adoption accelerates. With the stablecoin market surpassing $310 billion in total supply and projecting to reach approximately 2 trillion by 2030, demand is growing for regulated, high-quality liquidity across digital payment, settlement, and collateral platforms." The release adds, "The Western Asset Institutional Treasury Reserves Fund introduced a new Digital Institutional Share Class ($DIGXX) designed for distribution through blockchain-enabled intermediary platforms. The update allows approved intermediaries to leverage blockchain technology for recording and transferring fund share ownership. This provides faster settlement, 24/7 transactions, and easier integration with digital collateral and cash management systems, while the fund itself remains a traditional, SEC-registered money market fund. As interest in tokenized funds grows, this approach reflects how asset managers are adapting fund distribution to meet institutional demand for regulated products that work within digital market infrastructure." For more on Tokenized MMFs, see these Crane Data News stories: "Boston Fed Paper Examines Vulnerabilities of MM ETFs, Tokenized MMFs" (1/7/26), "More from Irish Funds' Tokenization Paper; Decrypt Explains Stablecoins" (12/29/25), "JPMAM Liquidity Insight: Tokenization Transforming Money Market Funds" (12/24/25), "Amundi Tokenises Shares of EUR MMF" (12/22/25), "JP Morgan Launches Tokenized MMF, My OnChain Net Yield Fund (MONY)" (12/17/25), "Bank for International Settlements Primer on Tokenized Money Funds" (12/2/25), "TD Securities Writes on Stablecoins, Tokenized Money Funds, Digital" (11/5/25), "NY Fed Blog Says Money Funds Dominate Tokenization To Date; Stability?" (9/25/25), "IMMFA on Tokenization of MMFs in Europe; Tether USDT; Fidelity Digital" (9/22/25), and "BNY's LiquidityDirect Portal Announces Plans to Tokenize Money Funds" (7/24/25).
Crane 100 MF Index Falls to 3.53%
Money fund yields (7-day, annualized, simple, net) decreased by 5 bps to 3.53% on average during the week ended Friday, January 9 (as measured by our Crane 100 Money Fund Index), after increasing 1 bp the week prior. Fund yields should inch lower in coming days as they digest the last of the Fed's Dec. 10 25 bps rate cut. Yields were 3.58% on 12/31/25, 3.78% on 11/30, 3.90% on 10/31, 3.94% on 9/30, 4.11% on 8/31, 4.12% on 7/31, 4.13% on 6/30, 4.14% on 3/31/25 and 4.28% on average on 12/31/24. MMFs averaged 4.75% on 9/30/24, 5.10% on 6/28/24, 5.14% on 3/31/24 and 5.20% on 12/31/23. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 679), shows a 7-day yield of 3.43%, down 5 bps in the week through Friday. Prime Inst money fund yields were down 6 bps at 3.64% in the latest week. Government Inst MFs were down 6 bps at 3.53%. Treasury Inst MFs were down 5 bps at 3.48%. Treasury Retail MFs currently yield 3.25%, Government Retail MFs yield 3.24% and Prime Retail MFs yield 3.44%, Tax-exempt MF 7-day yields were down 101 bps to 1.39%. Money market mutual fund assets rose by $5.7 billion on Tuesday (1/6), hitting a new record high of $8.165 trillion after breaking the $8.1 trillion barrier for the first time ever on 12/26, according to our Money Fund Intelligence Daily. Assets have fallen $8.2 billion in the week through Friday and they've jumped by $34.2 billion in January month-to-date (through 1/9). MMF assets increased by $126.3 billion in December, $132.8 billion in November, $142.1 billion in October, $105.2 billion in September and $132.0 billion in August. They rose by $63.7 billion in July, $6.7 billion in June and $100.9 billion in May. But MMFs decreased $24.4 billion in April. Assets increased by $2.8 billion in March, $94.2 billion in February, and $52.8 billion last January. Weighted average maturities were at 39 days for the Crane MFA and 40 days the Crane 100 Money Fund Index. According to Monday's Money Fund Intelligence Daily, with data as of Friday (1/9), 156 money funds (out of 789 total) yield under 3.0% with $198.3 billion in assets, or 2.4%; 633 funds yield between 3.00% and 3.99% ($7.945 trillion, or 97.6%); and now zero funds yield over 4.0%. Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.30%, after falling 1 basis point three weeks prior. The latest Brokerage Sweep Intelligence, with data as of January 9, shows one change over the past week. Ameriprise Financial Services lowered rates to 0.03% for accounts between $1K and $249K, to 0.08% for accounts of $250K to $499K, to 0.1% for accounts of $500K to $999K, to 1.0% for accounts of $1M to $4.9M and to 1.49% for accounts of $5M and greater. Four of the 10 major brokerages tracked by our BSI offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch, Morgan Stanley and Schwab.
Daily Upside on Money Funds in '26
The Daily Upside posted an article titled, "Money Market Funds Attracted $935B Last Year. Expect Half That in 2026." It states, "Money market funds attracted $935 billion in new assets last year, surpassing 2024 totals and defying the belief that Federal Reserve rate cuts would trigger mass outflows, according to Morgan Stanley research. The firm expects continued growth in 2026, though at a slower pace, with another $500 billion in inflows projected to push total assets past $8.6 trillion by year-end. Money market funds are expected to remain a core tool for many advisors even if interest rates drift lower. However, financial planners are staying flexible and considering other investing options, too." The piece continues, "Money market funds -- which invest in low-risk, short-term debt -- surged in popularity as the Fed began hiking rates in 2022. That rate cycle peaked in mid-2023, with the benchmark reaching between 5.25% and 5.5%. Morgan Stanley analysts found that in 2025: Retail investors accounted for 34% of total money-market inflows, while institutional investors made up 64%; Money market fund yields have topped 3% only twice over the past two decades. For roughly half that period, yields were effectively zero as the Fed held rates at the lower bound." They write, "Even after multiple rate cuts, the federal funds rate currently sits between 3.5% and 3.75%, keeping money market funds attractive for yield-hungry clients. As of Monday, the 7-day yields for the Vanguard Federal Money Market Fund and the Fidelity Government Money Market Fund were 3.69% and 3.43%, respectively. The Crane 100 Money Fund Index from Crane Data stood at 3.58%. 'Yields are still attractive [compared] to where they’ve been for the past 20 to 30 years,' said Pete Crane, president of Crane Data, adding that rates on bank deposit products -- including checking accounts, savings accounts and certificate of deposits -- remain far less competitive. 'The worst money fund is going to outperform the best bank deposit over time by a tremendous amount.'"
ICI: MMF Assets Break $7.8 Trillion
The Investment Company Institute's latest weekly "Money Market Fund Assets" report shows money fund assets surging by $70.8 billion to a record $7.804 trillion, after increasing by $59.9 billion the previous week. Assets have risen in 14 of the last 16 weeks and 22 of the past 25 weeks. MMF assets are up by $888 billion, or 12.8%, over the past 52 weeks (through 1/7/26), with Institutional MMFs up $545 billion, or 13.1% and Retail MMFs up $342 billion, or 12.4%. Year-to-date, MMF assets are also up by $954 billion, or 13.9%, with Institutional MMFs up $589 billion, or 14.3% and Retail MMFs up $365 billion, or 13.3%. ICI's weekly release says, "Total money market fund assets increased by $70.80 billion to $7.80 trillion for the eight-day period ended Wednesday, January 7, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $53.70 billion and prime funds increased by $13.78 billion. Tax-exempt money market funds increased by $3.32 billion." ICI's stats show Institutional MMFs increasing $48.3 billion and Retail MMFs increasing $22.5 billion in the latest week. Total Government MMF assets, including Treasury funds, were $6.418 trillion (82.2% of all money funds), while Total Prime MMFs were $1.233 trillion (15.8%). Tax Exempt MMFs totaled $153.6 billion (2.0%). It explains, "Assets of retail money market funds increased by $22.46 billion to $3.10 trillion. Among retail funds, government money market fund assets increased by $14.72 billion to $1.96 trillion, prime money market fund assets increased by $6.06 billion to $1.00 trillion, and tax-exempt fund assets increased by $1.69 billion to $139.50 billion." Retail assets account for 39.7% of the total, and Government Retail assets make up 63.2% of all Retail MMFs. They add, "Assets of institutional money market funds increased by $48.33 billion to $4.70 trillion. Among institutional funds, government money market fund assets increased by $38.98 billion to $4.46 trillion, prime money market fund assets increased by $7.72 billion to $229.79 billion, and tax-exempt fund assets increased by $1.63 billion to $14.06 billion." Institutional assets accounted for 60.3% of all MMF assets, with Government Institutional assets making up 94.8% of all institutional MMF totals. According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have increased by $53.3 billion to $8.162 trillion month-to-date in December (as of 1/7); they hit a record high of $8.165 trillion on 1/6. Assets increased by $126.3 billion in December, $132.8 billion in November, $142.1 billion in October, $105.2 billion in September and $132.0 billion in August. They rose $63.7 billion in July, $6.7 billion in June and $100.9 billion in May. MMFs fell by $24.4 billion in April, but rose $2.8 trillion in March, $94.2 billion in February and $52.8 billion last January. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're almost $400 billion lower than Crane's asset series.
ProShares Genius Money Market ETF
ProShares filed to launch the "ProShares Genius Money Market ETF," a combination of a money market ETF and a stablecoin reserve fund. The filing says, "ProShares Genius Money Market ETF (the 'Fund') seeks current income consistent with liquidity and preservation of capital.... The Fund intends to operate as a 'government money market fund' pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended, and as a permissible reserve investment for payment stablecoin issuers under the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 ('Genius Act'). As a result, it is subject to related restrictions on its portfolio composition, including that the Fund invests 100% of its assets in (i) cash, (ii) U.S. Treasury bills, notes or bonds, and (iii) overnight repurchase agreements." The filing explains, "Although the Fund will seek to continue to qualify as a 'government money market fund,' it will not seek to maintain a stable net asset value ('NAV') per share using the amortized cost or penny rounding method of valuation. Instead, the Fund will calculate its NAV per share based on the market value of its investments. In addition, unlike a traditional money market fund, the Fund operates as an exchange traded fund ('ETF'). As an ETF, the Fund's shares will be traded on [tbd] and will generally fluctuate in accordance with changes in its NAV per share as well as the relative supply of, and demand for, shares on [tbd]. You could lose money by investing in the Fund. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor is not required to reimburse the Fund for losses, and you should not expect that the sponsor will provide financial support to the Fund at any time, including during periods of market stress." It adds, "Shares of the Fund are expected to be held primarily by one or more stablecoin issuers as part of the reserve assets backing their outstanding payment stablecoins. Stablecoins are a type of digital asset designed to maintain a stable value, typically by pegging their value to a fiat currency such as the U.S. dollar. The activities of these issuers may create redemption pressure that could negatively impact the value of the Fund. In particular, during periods of market stress, regulatory uncertainty, or volatility in the digital asset ecosystem, the Fund may experience rapid or unexpected redemption requests. These redemptions could adversely affect the Fund's liquidity, yield, and ability to maintain a stable net asset value, particularly during broader market dislocations."
Weekly Money Fund Portfolio Holdings
Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of January 2) incldes Holdings information from 62 money funds (down 12 from 2 weeks ago), or $4.154 trillion (down from $4.581 trillion) of the $8.151 trillion in total money fund assets (or 60.0%) tracked by Crane Data. (Note: Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our December 10 News, "Dec. Money Fund Portfolio Holdings: Assets, Treasuries and Repo Surge.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $2.035 trillion (down from $2.188 trillion two weeks ago), or 49.0%; Repurchase Agreements (Repo) totaling $1.450 trillion (down from $1.600 trillion two weeks ago), or 34.9%, and Government Agency securities totaling $368.0 billion (down from $406.3 billion two weeks ago), or 8.9%. Commercial Paper (CP) totaled $146.0 billion (down from $177.4 billion two weeks ago), or 3.5%. Certificates of Deposit (CDs) totaled $78.3 billion (down from $89.4 billion two weeks ago), or 1.9%. The Other category accounted for $34.6 billion or 0.8%, while VRDNs accounted for $42.1 billion or 1.0%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $2.035 trillion, Fixed Income Clearing Corp with $555.5B, the Federal Home Loan Bank with $210.2B, JP Morgan with $138.2B, RBC with $109.1B, Federal Farm Credit Bank with $93.8B, Citi with $89.6B, BNP Paribas with $85.8B, Wells Fargo with $77.0B and Bank of America with $46.3B. The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($336.8B), JPMorgan 100% US Treas MMkt ($296.4B), Goldman Sachs FS Govt ($276.4B), Fidelity Inv MM: Govt Port ($275.4B), BlackRock Lq FedFund ($202.8B), State Street Inst US Govt ($200.4B), Morgan Stanley Inst Liq Govt ($198.0B), BlackRock Lq Treas Tr ($177.9B), Fidelity Inv MM: MM Port ($167.1B) and Dreyfus Govt Cash Mgmt ($163.7B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
MS Says Money Funds to Keep Growing
Barron's writes, "Money-Market Fund Assets Are at a Record and Poised to Keep Growing. Here’s Why." They tell us, "Money-market funds pulled in $935 billion in new assets last year, pushing total assets above $8 trillion and surpassing their haul in 2024, according to new research from Morgan Stanley. The low-risk savings vehicles are poised to maintain steady asset growth in 2026, despite expectations for more Federal Reserve rate cuts ahead." The piece continues, "Morgan Stanley analysts anticipate money-market funds could attract another $500 billion in assets this year because their yields remain attractive to both retail and institutional investors. The Crane 100 Money Fund Index had an average 3.58% annualized 7-day yield as of Jan. 3. Some funds offer above-average rates, such as Vanguard Federal Money Market Fund's 3.70%. That is down from a high of more than 5% in 2023, but well above the near-zero rates money funds earned for years before the Federal Reserve started raising rates in 2022." The article also says, "Morgan Stanley forecasts that assets in money-market funds could exceed $8.6 trillion by the end of 2026. Money-market fund yields have only been higher than 3% at two points over the past two decades, according to a Dec. 5 Morgan Stanley research note. 'Their high degree of safety and liquidity continue to make money-market funds an attractive investment alternative to bank deposits,' the analysts wrote." It adds, "Flows into money-market funds have persisted even as many investors embraced risky investments last year.... Morgan Stanley analysts estimated Dec. 5 that at the end of 2026, money-market fund investors would earn $275 billion in income over the previous 12 months. They believe most investors will reinvest the income in money-market funds, rather than put it in equities."
The Wall Street Journal writes "The $358 Billion Question for the New CEO of Berkshire Hathaway" The piece explains, "Greg Abel's time has come, and there's a $358 billion question on investors' minds: What will the new chief executive of Berkshire Hathaway do with all of that cash? As Warren Buffett's handpicked successor, Abel faces several challenges as he takes the reins today.... The most pressing issue is how to deploy Berkshire's record cash pile. The company has been a net seller of stocks for 12 straight quarters.... The resulting buildup of cash is a problem -- though perhaps a good one, as far as problems go -- that leaves Abel with both a menu of options and scrutiny from shareholders." The article states, "Abel declined to comment for this article. At the 2025 annual meeting in May, he said the cash pile is an 'enormous asset' that gives Berkshire a cushion if a market downturn occurs.... Buffett has long prided himself on maintaining a strong balance sheet with plenty saved up for a rainy day. During the financial crisis, he famously used Berkshire's financial strength to throw lifelines to companies including Goldman Sachs and General Electric. He has been waiting for other big opportunities. At the 2017 annual meeting, Buffett said: 'There's no way I can come back here three years from now and tell you that we hold $150 billion or so in cash or more, and we think we're doing something brilliant by doing it.' The cash pile kept growing. Berkshire's cash and equivalents increased to $358 billion by the end of September, after accounting for a payable for purchasing some short-term government debt. The risk to holding so much cash is that the return Berkshire can receive on such holdings could fall as the Federal Reserve lowers interest rates, some analysts have warned. On the other hand, they say, the cash is a protective armor for Berkshire's balance sheet."
Federated's Bartell Talks GBP MMFs
Federated Hermes (UK) posted a video update which asks, "How can Money Market Funds ensure liquidity as well as an attractive yield?" It's description states, "Joanne Bartell, Portfolio Manager for Liquidity, outlines why money market funds can potentially outperform traditional bank deposits, how combining trader and portfolio manager roles can boost investment decision making, as well as providing a perspective on the current cash management landscape." Moderator Tara Dougherty asks, "Flows have been pretty strong into money market funds as of late. If we focus on the sterling market for now, why do you think investors are choosing money market funds over bank deposits?" Bartell responds, "There are a number of advantages for clients investing in money market funds as opposed to just placing their cash into an overnight deposit with the bank. Money market funds aim to achieve a return over and above bank base rates. Money market funds tend to be able to do this by adding duration but still enabling investors to get access to the cash as same day liquidity. Historically, money market funds can be at premium with a yield, in a rate-cutting environment. For example, we're in the cutting environment with Bank of England. They may cut next month; they may cut in February. But when you see the Bank of England cut a rate or any central bank, the interest rate is immediately passed onto the customer via the bank ... they lower their interest rate immediately. With the composition of a money market portfolio, you'll find that our yield slightly lowers due to the composition and the extra duration that we can offer but still offering same-day liquidity." She adds, "The other thing is we're talking about yield, which is important, but capital preservation is our primary objective. This is our main focus. We only invest in high-quality, highly rated, good liquidity assets over a short duration period. We also have a very conservative credit list. So combine all of those factors, it basically reduces or alleviates some of that market volatility or our exposure to the market volatility that we’ve seen in past years." Bartell also tells us, "We have a dedicated money market credit team which is comprised of seven or eight analysts that purely work on money market credit. Every day we'll have a credit update -- we'll look at any credit overnight news, any rating agency changes -- so, we're always fully aware of where we are, and we'd never invest without being fully sure where we're going to be investing. We work within the parameters, and we manage to maintain a high yield using those parameters.... Each day, we monitor markets continuously, review economic data, any overnight news, any rating changes, any credit moves, and then we'll look at the yield curve -- so we'll look at maybe two points on the yield curve, depending on where we sit with the central bank's monetary policy -- and invest where we find value. This provides a bit of comfort to our client base." Finally, she adds, "We've got an investor base that we're very comfortable with. Our fund has no internal cash -- it's generally made up of investors. We have certain clients that move in the same way, so they have liabilities at the same point of the month, so we position our portfolio to work with them. We'll have excess liquidity, and we'll buy at these points where we find value. And obviously when we lose that cash, we know we're going to lose that cash.... We have inflows generally at the beginning of the month and outflows generally at the end of the month. But we're fully planned for that so we position our portfolio accordingly."
