News Archives: June, 2025
ICI published its latest monthly "Trends in Mutual Fund Investing - May 2025" and "Month-End Portfolio Holdings of Taxable Money Funds" on Friday. ICI's monthly Trends shows money fund totals increasing $84.7 billion, or 1.2%, in May to $6.996 trillion. MMFs have increased by $916.7 billion, or 15.1%, over the past 12 months (through 5/31/25). Money funds' May asset increase follows a decrease of $63.8 billion in April, $10.9 billion in March, an increase of $99.0 billion in February, $31.9 billion in January and $139.3 billion in December. They rose $171.5 billion in November, $117.4 billion in October and $158.6 billion in September. Bond fund assets increased $10.9 billion to $5.137 trillion, and bond ETF assets increased to $1.92 trillion in May 2025. (Note: Thanks once more to those who attended our Money Fund Symposium in Boston last week! Attendees and Crane Data Subscribers may access the recordings and MFS Conference Materials here.)
The monthly release states, "The combined assets of the nation's mutual funds increased by $934.77 billion, or 3.3 percent, to $28.91 trillion in May, according to the Investment Company Institute's official survey of the mutual fund industry. In the survey, mutual fund companies report actual assets, sales, and redemptions to ICI.... Bond funds had an inflow of $21.19 billion in May, compared with an outflow of $65.64 billion in April.... Money market funds had an inflow of $69.26 billion in May, compared with an outflow of $79.14 billion in April. In May funds offered primarily to institutions had an inflow of $61.77 billion and funds offered primarily to individuals had an inflow of $7.49 billion."
The Institute's latest statistics show that Taxable MMFs and Tax Exempt MMFs were both higher from last month. Taxable MMFs increased by $84.6 billion in May to $6.855 trillion. Tax-Exempt MMFs increased $0.1 billion to $140.8 billion. Taxable MMF assets increased year-over-year by $905.4 billion (15.2%), and Tax-Exempt funds rose by $11.3 billion over the past year (8.7%). Bond fund assets increased by $10.9 billion (after decreasing by $58.3 billion in April) to $5.137 trillion; they've increased by $305.2 billion (6.3%) over the past year.
Money funds represent 24.2% of all mutual fund assets (down 0.5% from the previous month), while bond funds account for 17.8%, according to ICI. The total number of money market funds was 263, unchanged from the prior month and down from 276 a year ago. Taxable money funds numbered 222 funds, and tax-exempt money funds numbered 41 funds.
ICI's "Month-End Portfolio Holdings" confirms a jump in Repo and a drop in Treasuries last month. Repurchase Agreements once again became the largest composition segment two months prior, this past month increasing $53.4 billion, or 2.0%, to $2.713 trillion, or 39.6% of holdings. Repo holdings have increased $366.8 billion, or 15.6%, over the past year. (See our June 11 News, "June Money Fund Portfolio Holdings: Repo Jumps to 40%, T-Bills Flat.”)
Treasury holdings in Taxable money funds fell down to the second largest composition segment two months prior; this past month they decreased $8.8 billion, or -0.3%, to $2.538 trillion, or 37.0% of holdings. Treasury securities have increased by $254.5 billion, or 11.1%, over the past 12 months. U.S. Government Agency securities were the third largest segment; they increased $387 million, or 0.0%, to $907.6 billion, or 13.2% of holdings. Agency holdings have increased by $205.8 billion, or 29.3%, over the past 12 months.
Certificates of Deposit (CDs) were in fourth place, up $6.8 billion, or 2.2%, to $315.3 billion (4.6% of assets). CDs decreased $45.4 billion, or -12.6%, over one year. Commercial Paper was in fifth place; they increased by $9.1 billion, or 3.1%, to $300.3 billion (4.4% of assets). CP held by money funds rose by $50.6 billion, or 20.3%, over 12 months. Other holdings increased to $21.1 billion (0.3% of assets), while Notes (including Corporate and Bank) decreased to $28.8 billion (0.4% of assets).
The Number of Accounts Outstanding in ICI's series for taxable money funds increased to 79.323 million, while the Number of Funds was unchanged at 222. Over the past 12 months, the number of accounts rose by 10.259 million and the number of funds decreased by 9. The Average Maturity of Portfolios was 38 days, up 4 days from April. Over the past 12 months, WAMs of Taxable money are up 2 days.
A recent "JPM Mid-Week US Short Duration Update" featured, "Takeaways from the 2025 Money Fund Symposium." They write, "Over 600 money market participants attended the 17th annual Crane Money Fund Symposium this week in Boston. Here are our key takeaways from the event. 1. Cash is king, with MMF AUMs remaining elevated. Over the past few years, inflows into MMFs have been driven by a combination of safety, liquidity needs, and competitive yields. This trend is unlikely to change anytime soon, given the high degree of uncertainty and the likelihood that policy rates will remain restrictive, leaving cash plentiful in the front end. Most market participants remain optimistic about cash for this year, with expectations that MMF AUMs will continue to trend higher, particularly as we head into 2H where MMFs tend to experience inflows." (Note: Thanks to those who attended our Money Fund Symposium in Boston earlier this week! Attendees and Crane Data Subscribers may access the recordings and MFS Conference Materials here.)
JPM's update continues, "2. Money markets are in a significant phase of transformation given tokenization. Stablecoins and tokenized assets represent innovations with the potential to reshape the cash ecosystem, much like ETFs transformed the mutual funds space. Tokenization allows the industry to upgrade the rails by which it moves value, reducing friction, lowering costs, while improving efficiency. For stablecoins, clear, consistent regulatory guardrails are needed to support broader adoption. Current stablecoin legislation calls for reserve guidelines that are even more restrictive than SEC Rule 2a-7."
It states, "3. Stablecoin adoption will take time... Market participants were generally skeptical that the stablecoin market could reach $2tn anytime soon, though acknowledged that upcoming legislation will bolster growth. Still, the infrastructure/ecosystem for stablecoins remains underdeveloped; it's unclear how the various stablecoins could coexist; and market participants have yet to fully grasp how to incorporate stablecoins into their businesses."
JPM also says, "4. [Stablecoins will be] providing only marginal incremental demand for Treasuries in the near-term. While Treasury Secretary Bessent has leaned on stablecoins as a source of significant demand for Treasuries, and in particular T-bills, most market participants believe that it will only provide a marginal incremental demand for T-bills. It is good messaging as the US government needs to determine how to fund the wider budget deficit, but it is not entirely realistic. The primary source of liquidity for T-bills continues to reside with traditional MMFs."
They tell us, "5. Bring on the T-bills. MMFs were universally in agreement that they would welcome more T-bills, once the debt ceiling is resolved and Treasury issues more T-bills to rebuild the TGA. Repo rates will rise as a result, and the soft funding markets we have seen over the past few months will turn. The Fed is closely monitoring funding markets for signs of stress, including money market rates, reserve levels, and both bank and non-bank balance sheets, while also gathering feedback from market participants."
JPM comments, "In this context, the Standing Repo Facility remains a crucial backstop, with regular participation in small-value operations seen as a prudent preparation for potential stresses in the funding markets. In response to concerns surrounding the X-date, MMFs are actively avoiding T-bills maturing around the projected X-date (August–September). This cautious positioning has led to shorter WAMs and increased reliance on repo to maintain high levels of liquidity."
They add, "6. No recession this year. Across the various panelist discussions, most market participants do not expect a recession this year, though they continued to emphasize the high degree of uncertainty in the current environment. While inflation is gradually easing, risks remain elevated due to ongoing trade tensions and geopolitical instability in the Middle East. The Fed continues to adopt a data dependent approach, carefully balancing inflation, growth, and labor risks while thus avoiding premature rate adjustments."
Finally, J.P. Morgan states, "7. USCP outstandings on the rise. Total U.S. CP outstandings have climbed to $1.4tn, marking a 20% increase year-to-date and reaching the highest level since 2009. This growth has been led primarily by non-financial CP, driven by a shift away from term financing, seasonal funding needs, macroeconomic uncertainty, M&A-related activity, and increased issuance from energy firms. Concurrently, the ABCP sector has expanded, mainly due to independent-sponsored programs, while bank-sponsored multi-seller programs have remained flat. Banks are increasingly turning to ABCP for balance sheet efficiency and capital relief, with an upward trend in issuance expected to continue. Bank CP and CDs have also witnessed growth, with outstandings up 14% year-to-date. This growth reflects banks' broader use of flexible funding tools, including CP, CDs, and time deposits. While CD issuance is expected to continue climbing, CP levels may stabilize around current levels."
In other news, ICI published its latest weekly "Money Market Fund Assets" report on Thursday. The weekly series shows money fund assets rising $7.6 billion to $7.023 trillion, after rising $8.5 billion the week prior. Money fund assets remain just below record levels; they've increased by $719.1 billion (or 11.4%) since the Fed last cut rates on 9/18/24 and have increased by $1.045 trillion (or 17.5%) since 4/24/24. MMF assets are up by $919 billion, or 15.1%, over the past 52 weeks (through 6/25/25), with Institutional MMFs up $476 billion, or 13.1% and Retail MMFs up $443 billion, or 18.1%. Year-to-date, MMF assets are up by just $172 billion, or 2.5%, with Institutional MMFs up $11 billion, or 0.3% and Retail MMFs up $162 billion, or 5.9%.
ICI's weekly release says, "Total money market fund assets increased by $7.64 billion to $7.02 trillion for the eight-day period ended Wednesday, June 25.... Among taxable money market funds, government funds increased by $3.97 billion and prime funds increased by $2.90 billion. Tax-exempt money market funds increased by $780 million." ICI's stats show Institutional MMFs increasing $2.5 billion and Retail MMFs increasing $5.2 billion in the latest week. Total Government MMF assets, including Treasury funds, were $5.719 trillion (81.4% of all money funds), while Total Prime MMFs were $1.163 trillion (16.6%). Tax Exempt MMFs totaled $140.0 billion (2.0%).
It explains, "Assets of retail money market funds increased by $5.17 billion to $2.90 trillion. Among retail funds, government money market fund assets increased by $2.19 billion to $1.82 trillion, prime money market fund assets increased by $1.71 billion to $946.19 billion, and tax-exempt fund assets increased by $1.27 billion to $127.81 billion." Retail assets account for well over a third of total assets, or 41.2%, and Government Retail assets make up 62.9% of all Retail MMFs.
They add, "Assets of institutional money market funds increased by $2.47 billion to $4.13 trillion. Among institutional funds, government money market fund assets increased by $1.78 billion to $3.90 trillion, prime money market fund assets increased by $1.18 billion to $217.16 billion, and tax-exempt fund assets decreased by $493 million to $12.18 billion." Institutional assets accounted for 58.8% of all MMF assets, with Government Institutional assets making up 94.4% of all institutional MMF totals.
According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have increased by $4.9 billion in June (through 6/25/25) to $7.405 trillion, after assets hit a record high of $7.406 trillion on June 3. Assets jumped by $100.9 billion in May, fell by $24.4 billion in April, they rose $2.8 trillion in March, $94.2 billion in February, $52.8 billion in January, $110.9 billion in December, $200.5 trillion in November, $97.5 billion in October, $149.8 billion in September, $109.7 billion in August, $16.6 billion in July, and $15.7 billion last June. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $330 billion lower than Crane's asset series.
In a recent "Talking Investment Management" podcast titled, "Tokenization and Stablecoins: What Fund Managers Need to Know," Stradley Ronon partners Jamie Gershkow and Jesse Kanach "explore the fast-evolving world of tokenization and what it means for investors, fund sponsors and financial institutions." They "explore how blockchain is reshaping traditional investment instruments, such as money market funds, and enabling new innovations, such as stablecoins and interest-bearing digital assets." Gershkow tells us, "[In] today's episode, we'll discuss the rise of tokenization, which has gained significant traction in the asset management industry.... Jesse, let's start with the basics. When we say tokenization, can you break down what we mean and why tokenization is gaining momentum?" (Note: Thanks to those who attended our Money Fund Symposium in Boston earlier this week! Attendees and Crane Data Subscribers may access the recordings and MFS Conference Materials here.)
Kanach replies, "Starting way, way back, we've seen the evolution of holding assets physically like the old school treasure chest or the safe or the bank vault. Then over time, evidenced on paper like those embossed stock certificates that were passed around for hundreds of years up through the 1960s on into the computer age. The book entry, electronic books and records that we all looked to online now, and next you'll see blockchain and cryptographic developments often referred to as tokenization, where the evidence of ownership and transfer of your asset through near instantaneous unforgeable, self-verifiable mechanisms with your remaining and change holdings updated right away. So now, tokens are more than just an update of paper or electronic record keeping."
He explains, "One of these assets that's of critical importance to the US and even global markets is the US dollar, specifically either a $1 bill or an instrument that represents a $1 unit. So now it's been over four decades since $1 per share money market mutual funds were developed in the U.S., followed by some hefty regulation for good reason. So now I know I need to turn here to Jamie. You counsel and study money market funds. You're at the forefront of the regulatory developments impacting them, and now we've seen an uptick in interest around tokenized money market funds. What about the way these products are structured ... makes them attractive for tokenization?"
Gershkow replies, "Let's talk first about traditional money market funds. These are funds that invest in high-quality short-term debt instruments and, more specifically, the large majority of U.S. registered money market funds are government money market funds, which allows them to use theoretical cost method evaluation to maintain a stable dollar per share. These funds are popular cash management vehicles for a variety of reasons, including the stability of the $1 price per share while being able to earn some yield on your cash. In the meantime, all within a fund wrapper that is generally considered fairly low risk, tokenized money market funds or tokenized share classes of money market funds take that product and all of those features and benefits and essentially put it in a different file format whereby fund shares and investor ownership in the funds are represented by digital tokens on blockchain networks."
She continues, "Put another way, these are your traditional money market funds that have digitized fund ownership on different blockchain networks. The underlying assets held by the money fund don't differ from traditional money market funds, meaning these aren't the types of funds that are investing in crypto or anything like that. It is just that the digitized fund ownership is on different blockchain networks. So why money market funds for tokenization? I think these give investors a way to access the benefits of money market funds, coupled with the advantages and efficiencies of blockchain technology. They retain the low-risk benefits of a traditional money market fund with some really interesting use cases as cash management vehicles. We've seen different varieties of these products with different features that continue to evolve and innovate. One of these interesting features, for example, is peer-to-peer transfer, which is the ability to transfer fund shares from one shareholder wallet to another shareholder wallet within or between different approved blockchain networks."
Gershkow comments, "So, as an oversimplified example ... I could transfer my money market fund shares to your wallet, processed immediately at any time on any day. Tokenization and the use of blockchain have also allowed for the development of methods to distribute intraday yield based on the period of time each person holds transferred shares during an NAV cycle.... This all comes alongside the more general rise in decentralized finance, including stablecoins, for example. So now that we've discussed money market funds, let's shift over to stablecoins. Many have probably seen that stablecoin legislation is pending in Congress, and some have compared stablecoins to tokenized money market funds. But there are distinct differences."
Kanach says, "A stablecoin is a transferable token that represents a value of $1 or some other number. I'll just talk about $1 for this purpose; they're meant for token transactions or other instant digital transactions, basically, payments of some kind. They can be extremely efficient. And using a $1 coin rather than volatile Bitcoin or Ether, for example, can be reassuring by comparison. Wiring money is a bit like sort of printing an email that you receive and then mailing it back in an envelope. It does a job, but it's a lot less efficient. It doesn't track your records of having sent it. There's less assurance that the transaction has gone through or less immediacy. So that said, the efficiency of the transfer, which is indisputable, must be looked at alongside the question of why is the stablecoin worth a dollar?"
He tells us, "The stablecoin can say it is, a community can agree it is, but something needs to back it. And Jamie, you discussed regulated money market funds, which are backed by specific types of assets. There really is a tried and true methodology to maintaining a $1 price. The regulators and the markets have really tested this through many stress test-type market events. But based on all the lessons learned, it's way more complicated than, for example, just live streaming a shelf full of cash to prove the backing is there. Now, even assuming the stablecoins' $1 value will be respected perpetually, why place your hard-earned assets in a stablecoin?"
Kanach comments, "Every financial institution puts its cash to work ASAP. You hear about sweeping cash into interest-bearing accounts each day or at the end of each day and parking actual idle cash maybe in your pocketbook, your wallet or a cash register. That's about the only time someone would normally want to hold idle cash. And it's not just an interesting practice. There are class action lawsuits in the news as we speak, claiming that money managers didn't sweep their clients' idle cash into high-yielding accounts. So for stablecoins, there's not only the risk of holding the $1 asset, there's even a risk of loss.... So normally it's the oldest rule in finance that a person looks to be compensated for risk."
On new regulations, Kanach says, "Once the legislation and rules take effect, on the one hand, we can expect the role of stablecoins for payments to really surge. But that said, I'll mention that the legislation may be at odds with the newish concept of interest-bearing stablecoins since the permitted activities under the legislation or at least some of the legislation, are very narrowly defined. So keep your eyes open for developments for those. And Jamie, you may have thoughts on interest-bearing stablecoins in general."
Gershkow answers, "So let's dive in and talk about some of these regulatory considerations. One thing I'll note generally when I say money market funds in this discussion is that we've been talking about US money market funds registered under the 1940 Act. However, there are a handful of other liquidity vehicles that have been tokenized that are colloquially referred to as money market funds, but may not necessarily refer to us registered money market funds and are instead private liquidity pools not registered under the '40 Act that are limited to being offered to certain types of institutional qualified investors."
She explains, "A tokenized fund is an SEC-registered mutual fund registered under all of the same rules that exist in the US sold by prospectus. So, these tokenized products go through the regular SEC registration process that your more traditional mutual funds or money market funds would go through. But of course, there are special considerations to think through here. For example, does the issuance of tokens result in the issuance of separate securities? What happens if there's an outage on a blockchain that could impact the fund and its ability to meet redemptions? Are there any novel features of the funds that may require no-action relief or exemptive relief from the SEC? Are there different or enhanced KYC or ... procedures that are appropriate? These are some of the things that we’ve been thinking through as these products come to market."
Kanach adds, "That's an interesting transition to how these registered funds, SEC registered 1940 Act funds, operate as exchange-traded funds, or ETFs, in a normal stablecoin. Maintaining a $1 price could be tough. But if there was an ETF that that intended to maintain a stable price, there is a by now longstanding mechanism for arbitraging through creation and redemption of the ETF shares with authorized participants that are generally large investment banks, dealers and other large institutional parties, that really maintain, for many ETFs, the net asset value and for these funds could maintain a $1 stable value. `The funds that don't operate in the US as full-fledged ETFs may have additional challenges in maintaining the $1 price. Stablecoins that really seek to operate as non-funds and as non-issuers of securities also have additional issues to consider."
Finally, Gershkow comments, "I know broadly speaking, I think this is only picking up more momentum, and we're seeing the world of traditional finance and decentralized finance converge. And I think we're gonna continue to see increased tokenization of real-world assets, generally not just money market funds, but further democratizing access to these assets, more broadly speaking."
We wrote last week on the "2025 AFP Liquidity Survey." (See our June 20 News, "AFP 2025 Liquidity Survey: MMFs Inch Higher; Deposits, T-Bills Lower.") Today, we continue our excerpts from the annual survey of corporate investors' cash habits. Discussing "Current Allocations of Short-Term Investments," AFP says, "Companies maintain their investments in relatively few vehicles. Organizations invest in an average 2.57 vehicles for their cash and short-term investments -- slightly lower than the 2.7 average reported in 2024. Most organizations continue to allocate a large share of their short-term investment balances -- an average of 80% -- in safe and liquid investment vehicles: bank deposits, money market funds (MMFs) and Treasury securities. This result is three percentage points lower than the 83% reported in 2024. The typical organization currently maintains 46% of its short-term investments in bank deposits. This allocation is one percentage point lower than last year (2024) but is 9 percentage points lower than the 55% reported in 2022, and lower than both the 52% reported in 2021 and the 51% in 2020. This year's (2025) allocation is similar to percentages reported in 2019 (46%)." (Note: Thanks to those who attended our Money Fund Symposium in Boston! Attendees and Crane Data Subscribers may access the MFS Conference Materials here.)
AFP writes, "Current allocations in Government/Treasury money market mutual funds at 20.4% is an increase of 0.6 percentage points from the figure reported in 2024. The allocation is highest for publicly held companies -- at 26.1% -- than for other organizations. Investment allocations to Treasury securities (including bills, notes and bonds) are 8.7%, lower than the 12.4% reported in 2024.... Overall, as deposits remained stable, allocations to Government/Treasury money funds, commercial paper, Prime/diversified money market mutual funds increased, while allocations in Treasury securities decreased."
They say, "Shifting away from direct purchases of Treasury-related securities may signal a desire to diversify allocations through more streamlined investment approaches. This shift could be driven by efforts to automate treasury processes, reducing costs and freeing up time for other strategic initiatives. These shifts in investment vehicles signal that organizations continue to be cautious and are leaning towards allocating their investments in those vehicles which offer stability and safety."
A section on "Money Market Funds," tells us, "Various drivers play a role in the selection of money market funds. The three factors that play the most important role are fund ratings, yield and stable NAV. Sixty-nine percent of treasury and finance professionals cite fund ratings as a primary driver (among the top three drivers), while 68% cite yield and 72% cite fees as having a significant role when selecting a mutual fund. One of the significant shifts seen in the 2024 AFP Liquidity Survey results was the market's transition away from Prime funds which have a floating NAV. Stable NAV ranks as the third most influential factor in this year's survey, mirroring the trend seen in 2023 when the SEC announced liquidity fees, which took effect in 2025."
It continues, "Thirty-eight percent of respondents expect that, with the advent of real-time payments, the money market industry will provide 24/7 liquidity -- lower than the 40% who expressed this view in the 2024 survey. Thirty-three percent of respondents are unsure if real-time payments operating in a 24/7 environment will require the money market industry to provide 24/7 liquidity. Confidence in the money market industry's ability to provide 24/7 liquidity has declined compared to previous years surveys, particularly due to the challenges of implementing swing pricing for NAVs, which proved too complex for widespread adoption. Dependence on real-time liquidity will likely require underlying payment rails capable of supporting instant transfers of securities and dollar flows -- capabilities that are not yet fully developed."
They write, "Nearly 90% of respondents report that their organizations would select real-time money market funds and 73% would choose real-time investment sweeps if those options fit within the parameters of their companies investment policies. Real-time earnings credit rates and real-time investment options to 'follow the sun' are less likely preferred choices for organizations when selecting investment vehicles (cited by 53% and 18% of respondents, respectively). A larger share of respondents from organizations that are net investors than those that are net borrowers select a real-time money market fund as an investment vehicle of choice (93% compared to 86%)."
AFP's survey adds, "Money market funds and investment sweeps are currently offered. Adding real-time capabilities, though new, might be easier to understand than real-time earnings credit rates, and might operate as efficiently as real-time investment options in following the sun. Currently there is greater uncertainty as to the timing to achieve real-time liquidity. There will be reliance on the Federal Reserve to provide the underlying infrastructure to help the market be prepared."
It states, "Thirty-eight percent of corporate practitioners report an increase in their organizations' cash holdings within the U.S. in the past 12 months (through March 2025). The share of those respondents reporting a decrease in their companies' cash holdings within the U.S increased by three percentage points -- to 16% in this year's survey. Sixty-five percent of respondents say that in the past 12 months their organizations investments outside the U.S. were unchanged, while 20% report an increase in cash and short-term balances. Nearly two-thirds of organizations hold some amount of cash outside of the U.S."
AFP states, "Most organizations continue to allocate a large share of their short-term investment balances -- an average of 80% -- in safe and liquid investment vehicles: bank deposits, money market funds (MMFs) and Treasury securities. The typical organization currently maintains 46% of its short-term investments in bank deposits."
They add, "Banks continue to be major depositories for companies' U.S.-based cash and short-term investment holdings. This year's survey results show that the percentage of cash and short-term investments being held currently at banks at 46% is very similar to the 47% reported in 2024. Most respondents, 84%, consider their organizations' overall relationship with their banks to be a significant determinant in bank selection, while 52% of financial professionals say that the credit quality of a bank is a deciding factor."
Finally, the survey says, "The three factors that play the most important role in the selection of money market funds are fund ratings, yield and stable NAV. Thirty-eight percent of respondents expect that with the advent of real-time payments, the money market industry will provide 24/7 liquidity, while 33% of respondents are unsure if real-time payments operating in a 24/7 environment will require the money market industry to provide 24/7 liquidity. This year's survey findings suggest that business leaders continue to be cautious but exhibit signs of tepid optimism when making decisions regarding managing their organization's cash and short-term investments."
The U.S. Securities and Exchange Commission published its latest monthly "Money Market Fund Statistics" summary late last week, which shows that total money fund assets rose by $94.4 billion in May 2025 to a record high $7.468 trillion, after hitting the previous record $7.391 trillion two months prior. The SEC shows Prime MMFs increased $11.7 billion in May to $1.270 trillion, Govt & Treasury funds increased $82.3 billion to $6.051 trillion and Tax Exempt funds increased $0.3 billion to $147.3 billion. Taxable yields continued to decline in May after previous decreases in April, March, February and January. The SEC's Division of Investment Management summarizes monthly Form N-MFP data and includes asset totals and averages for yields, liquidity levels, WAMs, WALs, holdings, and other money market fund trends. We review their latest numbers below. (Our MFI XLS monthly shows money fund assets jumping $96.6 billion in May 2025, to a new record of $7.414 trillion. In June month-to-date through 6/18, total money fund assets have decreased by $33.0 billion to $7.367 trillion, according to Crane Data's separate, and slightly smaller, MFI Daily series.) (Note: Thanks to those attending our Money Fund Symposium in Boston! We hope you're enjoying the show.... Attendees and Crane Data Subscribers may access the MFS Conference Materials here.)
May's asset increase follows a decrease of $17.0 billion in April, a rise of $2.8 billion in March, $101.8 billion in February, $47.9 billion in January, $113.2 billion in December, $197.8 billion in November, $93.3 billion in October, $166.6 billion in September, $97.8 billion in August, $19.5 billion in July, $21.3 billion in June, and $89.7 billion last May. Over the 12 months through 5/31/25, total MMF assets have increased by $939.5 billion, or 14.4%, according to the SEC's series.
The SEC's stats show that of the $7.468 trillion in assets, $1.270 trillion was in Prime funds, up $11.7 billion in May. Prime assets were up $2.4 billion in April, $22.1 billion in March, $15.4 billion in February, $27.4 billion in January, $4.0 billion in December, $12.9 billion in November, $16.4 billion in October, but down $5.6 billion in September and $25.1 billion in August. They fell $11.5 billion in July and $204.6 billion in June. But assets rose $19.7 billion last May. Prime funds represented 17.0% of total assets at the end of May. They've decreased by $134.4 billion, or -9.6%, over the past 12 months. (Note that the SEC's series includes a number of internal money funds not tracked by ICI, though Crane Data includes most of these assets in its collections.)
Government & Treasury funds totaled $6.051 trillion, or 81.0% of assets. They increased $82.3 billion in May, decreased $24.7 billion in April, $21.8 billion in March, increased $85.6 billion in February, $23.1 billion in January, $109.5 billion in December, $181.5 billion in November, $73.2 billion in October, $171.2 billion in September, $121.9 billion in August, $31.3 billion in July, $229.2 billion in June, and $65.5 billion last May. Govt & Treasury MMFs are up $1.062 trillion over 12 months, or 21.3%. Tax Exempt Funds increased $0.3 billion to $147.3 billion, or 2.0% of all assets. The number of money funds was 276 in May, down 1 from the previous month and down 13 funds from a year earlier.
Yields for Taxable MMFs continued to decline in May, while Tax Exempt MMFs yields also fell. The Weighted Average Gross 7-Day Yield for Prime Institutional Funds on May 31 was 4.46%, down 1 bp from the prior month. The Weighted Average Gross 7-Day Yield for Prime Retail MMFs was 4.47%, down 2 bps from the previous month. Gross yields were 4.36% for Government Funds, down 2 bps from last month. Gross yields for Treasury Funds were down 2 bps at 4.34%. Gross Yields for Tax Exempt Institutional MMFs were down 93 basis points to 2.38% in May. Gross Yields for Tax Exempt Retail funds were down 84 bps to 2.51%.
The Weighted Average 7-Day Net Yield for Prime Institutional MMFs was 4.36%, down 1 bp from the previous month and down 101 bps from 5/31/24. The Average Net Yield for Prime Retail Funds was 4.20%, down 2 bps from the previous month and down 102 bps since 5/31/24. Net yields were 4.15% for Government Funds, down 1 bp from last month. Net yields for Treasury Funds were down 1 bp from the previous month at 4.13%. Net Yields for Tax Exempt Institutional MMFs were down 92 bps from April to 2.28%. Net Yields for Tax Exempt Retail funds were down 84 bps at 2.28% in May. (Note: These averages are asset-weighted.)
WALs and WAMs were higher in May. The average Weighted Average Life, or WAL, was 53.9 days (up 2.0 days) for Prime Institutional funds, and 46.7 days for Prime Retail funds (up 1.4 days). Government fund WALs averaged 91.1 days (up 1.7 days) while Treasury fund WALs averaged 97.6 days (up 5.0 days). Tax Exempt Institutional fund WALs were 5.0 days (up 1.0 days), and Tax Exempt Retail MMF WALs averaged 28.2 days (up 1.7 days).
The Weighted Average Maturity, or WAM, was 28.7 days (up 3.6 days from the previous month) for Prime Institutional funds, 25.2 days (up 2.5 days from the previous month) for Prime Retail funds, 38.8 days (up 5.3 days from previous month) for Government funds, and 44.6 days (up 5.6 days from previous month) for Treasury funds. Tax Exempt Inst WAMs were up 1.0 days at 5.0 days, while Tax Exempt Retail WAMs were up 1.7 days from previous month at 27.3 days.
Total Daily Liquid Assets for Prime Institutional funds were 53.0% in May (down 1.4% from the previous month), and DLA for Prime Retail funds was 45.1% (down 2.8% from previous month) as a percent of total assets. The average DLA was 62.8% for Govt MMFs and 93.8% for Treasury MMFs. Total Weekly Liquid Assets was 65.2% (down 1.5% from the previous month) for Prime Institutional MMFs, and 61.4% (down 0.6% from the previous month) for Prime Retail funds. Average WLA was 76.5% for Govt MMFs and 99.3% for Treasury MMFs.
Note that the SEC made a number of changes to their monthly release several months ago, so we're no longer publishing a number of tables. A press release titled, "SEC Publishes New Data and Analysis About Registered Investment Companies and Money Market Funds," states, "The Securities and Exchange Commission ... published new data and analysis in a pair of reports that provide the investing public with updated key information about registered investment companies and money market funds. 'It is important that the Commission publicly shares the information it collects in a clear and transparent way,' says Acting Chairman Mark Uyeda. 'These two reports will provide the public with key information about the approximately $41.5 trillion investors trust to funds and the approximately $7.39 trillion invested in money market funds.'"
The SEC says, "Money Market Fund Statistics is an enhanced version of the money market funds report generated by the Division of Investment Management. This report contains additional statistical analysis and enhancements, as well as certain metrics based on Form N-MFP data. The modifications to the report are designed to further facilitate the public's ability to efficiently review, digest, and use aggregate information about the money market fund industry by including summaries of more money market fund data, including information about internal affiliated funds, portfolio investments, flows, and industry concentration. The report extends the downloadable historical statistical series of data back to 2010."
Tim Husson, who leads the SEC's Division of Investment Management's Analytics Office, adds, "Forms N-MFP and N-CEN provide insights into key areas of the investment company industry. The reports reflect our continued dedication to enhance the public's use of important information about the industry."
The Investment Company Institute published, "Worldwide Regulated Open-Fund Assets and Flows, First Quarter 2025," Tuesday, which shows that money fund assets globally rose by $246.3 billion, or 2.1%, in Q1'25 to a record $11.845 trillion. (The totals would have been $12.117 trillion if Australia and New Zealand had been included.) Increases were led by a sharp jump in money funds in U.S. and Luxembourg, while Ireland and Brazil also rose. Meanwhile, money funds in China and Turkey were lower. MMF assets worldwide increased by $1.404 trillion, or 13.4%, in the 12 months through 3/31/25, and money funds in the U.S. now represent 60.1% of worldwide assets. European money fund asset totals surpassed Asian money fund totals for the first time since Q4'2017. We review the latest Worldwide MMF totals, below. (Note: For those attending our Money Fund Symposium, welcome to Boston! Attendees and Crane Data Subscribers may access the MFS Conference Materials here.)
ICI's release says, "Worldwide regulated open-end fund assets, excluding assets in funds of funds, increased 0.8 percent to $74.45 trillion at the end of the first quarter of 2025. Worldwide net cash inflows to all funds were $578 billion in the first quarter, compared with $1.3 trillion of net inflows in the fourth quarter of 2024. 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 first quarter of 2025 contains statistics from 43 jurisdictions."
It explains, "The growth of total regulated open-end fund assets reported in US dollars, increased due to US dollar depreciation over the first quarter of 2025. For example, on a US dollar–denominated basis, fund assets in Europe increased by 2.9 percent in the first quarter, compared with a decrease of 1.2 percent on a euro-denominated basis."
ICI's quarterly continues, "Globally, equity fund assets decreased, on a US dollar–denominated basis, by 1.7 percent to $35.09 trillion at the end of the first quarter of 2025. At the same time, Bond fund assets increased by 3.8 percent to $14.30 trillion; balanced/mixed fund assets increased by 1.9 percent to $7.43 trillion, and money market fund assets increased by 2.1 percent to $11.84 trillion."
The release also tells us, "At the end of the first quarter of 2025, 47% of worldwide regulated open-end fund assets were held in equity funds. The asset share of bond funds was 19% and the asset share of balanced/mixed funds was 10%. Money market fund assets represented 16% of the worldwide total. By region, 57% of worldwide assets were in the Americas in the first quarter of 2025, 32% were in Europe, and 11% were in Africa and the Asia-Pacific regions."
ICI adds, "Net sales of regulated open-end funds worldwide were $578 billion in the first quarter of 2025.... Globally, bond funds posted an inflow of $222 billion in the first quarter of 2025, after recording an inflow of $315 billion in the fourth quarter.... Money market funds worldwide experienced an inflow of $157 billion in the first quarter of 2025 after registering an inflow of $582 billion in the fourth quarter of 2024."
According to Crane Data's analysis of ICI's "Worldwide" fund data, the U.S. sustained its position as the largest money fund market in Q1'25 with $6.975 trillion, or 60.1% of all global MMF assets. U.S. MMF assets increased by $122.4 billion (1.8%) in Q1'25 and have increased by $1.055 trillion (17.8%) in the 12 months through March 31, 2025. China remained in second place among countries overall. China saw assets decrease $28.0 billion (-1.5%) in Q1 to $1.836 trillion (15.8% of worldwide assets). Over the 12 months through March 31, 2025, Chinese MMF assets have increased by $248.0 billion, or 15.6%.
Ireland remained third among country rankings, ending Q1 with $952.3 billion (8.2% of worldwide assets). Irish MMFs were up $38.2B for the quarter, or 4.2%, and up $146.0B, or 18.1%, over the last 12 months. Luxembourg remained in fourth place with $687.4 billion (5.9% of worldwide assets). Assets there increased $47.1 billion, or 7.4%, in Q1, and were up $116.7 billion, or 20.4%, over one year. France was in fifth place with $464.9B, or 4.0% of the total, up $14.2 billion in Q1 (3.1%) and up $5.1B (1.1%) over 12 months.
Australia was listed (by us) in sixth place with $268.7 billion, or 2.3% of worldwide assets. Its MMF data was unavailable for 2024 and Q1 2025, so we kept the 2023 Q4 numbers. Mexico was in 7th place with $134.0 billion (1.2%); assets there increased $8.4 billion (6.7%) in Q1 and increased by $9.3 billion (7.4%) over 12 months. Korea was the 8th ranked country and saw MMF assets increase $15.7 billion, or 13.7%, in Q1'25 to $130.4 billion (1.1% of the total); they've decreased $2.9 billion (-2.2%) for the year. Brazil was in 9th place, as assets increased $17.9 billion, or 16.6%, to $125.9 billion (1.1% of total assets) in Q1. They've increased $935 million (0.7%) over the previous 12 months. ICI's statistics show Japan was listed in 10th place with $95.9B, or 0.8% of total assets, down $1.2 billion (-1.2%) for the quarter.
India was in 11th place, decreasing $2.8 billion, or -3.4%, to $78.4 billion (0.7% of total assets) in Q1 and increasing $15.7 billion (25.0%) over the previous 12 months. Canada ($66.7B, up $7.3 billion and up $8.9B over the quarter and year, respectively) ranked 12th ahead of Switzerland. ($47.1B, up $5.1B and up $8.5B). Argentina ($36.5B, up $4.9B and up $19.3B) and Chile ($34.6B, up $1.8B and up $1.4B), rank 14th and 15th, respectively. United Kingdom, Chinese Taipei, Spain, South Africa and Turkey round out the 20 largest countries with money market mutual funds.
ICI's quarterly series shows money fund assets in the Americas total $7.376 trillion, up $162.8 billion in Q1. Asian MMFs decreased by $16.9 billion to $2.181 trillion, and Europe saw its money funds rise $99.2 billion in Q1'25 to $2.264 trillion. Africa saw its money funds increased $1.1 billion to $23.5 billion.
Note that Ireland and Luxembourg's totals are primarily "offshore" money funds marketed to global multinationals, while most of the other countries in the survey have mainly domestic money fund offerings. Contact us if you'd like our latest "Largest Money Market Funds Markets Worldwide" spreadsheet, based on ICI's data. (Let us know too if you'd like to see our latest Money Fund Intelligence International product, which tracks "offshore" money market funds domiciled in Europe and outside the U.S.)
The Association for Financial Professionals, a group representing corporate treasurers, published its "2025 AFP Liquidity Survey" earlier this week. (See AFP's press release.) The cover letter says, "Invesco is once again proud to partner with the Association for Financial Professionals (AFP) to sponsor the 20th annual AFP Liquidity Survey Report. This marks the sixth year that Invesco has sponsored this industry-leading exploration into current and emerging corporate cash management trends." Invesco's Laurie Brignac explains, “As highlighted in this year's AFP survey, the U.S. economy continued to grow in 2024, inflation remained above the Federal Reserve's 2% target. and the Federal Open Market Committee (FOMC) took a pause after marginally loosening policy rates. Adding challenge and uncertainty, a new administration took center stage in the U.S. with an aggressive agenda including tariffs which increased market volatility at about the same time this annual AFP survey was in the field." (Note too: For those attending Money Fund Symposium next week (June 23-25) in Boston, we look forward to seeing you! Attendees and subscribers may access the conference materials via our "Money Fund Symposium 2025 Download Center.")
AFP's Introduction tells us, "To understand current and emerging trends in organizations' cash and short-term investment holdings, as well as investment policies and strategies in the current economic environment, the Association for Financial Professionals (AFP) conducted its 20th annual AFP Liquidity Survey in March 2025. The survey generated 254 responses, which are the basis of this report. AFP thanks Invesco for underwriting the 2025 AFP Liquidity Survey."
Discussing "Change in Cash and Short-Term Balances Over the Past 12 Months: U.S. and Non-U.S. Cash Holdings," the AFP says, "Thirty-eight percent of corporate practitioners report an increase in their organizations' cash holdings within the U.S. in the past 12 months (through March 2025) -- 6 percentage points lower than the 44% reported in the 2024 AFP Liquidity Survey Report. The share of those respondents reporting a decrease in their companies' cash holdings within the U.S increased by three percentage points -- from 13% in last year's survey to 16% in the current survey. These findings suggest organizations are holding onto their cash balances, although to a lesser extent than last year, or using those balances to support underlying business needs. Forty-six percent of respondents report that there was no significant change in their companies' cash and short-term balances within the U.S. over the past 12 months, similar to the 43% reported last year."
They write, "The distribution of organizations' cash and short-term balances outside the U.S. closely resembles the result in last year's survey. Sixty-five percent of respondents indicate that in the past 12 months their organizations' investments outside the U.S. were unchanged -- slightly higher than the 61% reported last year. Twenty percent report an increase in cash and short-term balances, lower than the 24% reported in last year's survey, while 15% of organizations decreased cash and short-term balances outside the U.S., identical to the figure in last year's report."
AFP's report continues, "Organizations are using similar strategies for both domestic and international cash holdings. Business leaders are taking a mixed approach. Survey results suggest the rate of holding onto cash balances is lower than last year; this could be due either to lower cash generation or because organizations reinvested in their companies due to a more favorable economic outlook last year. Cash holdings will be addressed in greater depth in the next section of the report."
The survey tells us, "Changes in cash holdings are driven by various factors. Seventy-four percent of respondents report that increased operating cash flow has had either a significant impact or some impact on the increase in their organizations' cash holdings in the past 12 months -- an 8-percentage-point decrease from the 82% in last year's survey. Other drivers contributing to increased cash holdings at organizations (each cited by 47% of respondents) include decreased capital expenditures, increased debt outstanding/ accessed best markets/securitization/factoring/supply-chain finance and paid back/retired debt/movement of debt/freed up cash flow. Forty-six percent of respondents note domestic political/regulatory risks (e.g., U.S. trade policy) a reason for the increase in their organizations' cash holdings, a 6-percentage-point increase from last year. This could be a consequence of the perceived optimism that the Trump administration policies would be more business-friendly, or a cash build-up due to uncertainty with the administration's plan for tariffs at the time the survey was being conducted."
It continues, "Additional drivers that have impacted the increase in organizations' cash holdings: Sale of company, business division; Business outlook, market uncertainty, market volatility. Fifty-eight percent of survey respondents report that inflationary impacts have had either a significant impact or some impact on the decrease in their organizations cash holdings in the past 12 months (ending in March 2025). Fifty-four percent indicate that increased capital expenditure has had either a significant impact or some impact on the decrease in cash holdings during the same time period. Other drivers contributing to decreased cash holdings at organizations include paid back/retired debt (cited by 47% of survey respondents) and decreased operating cash flow (44%)."
The survey says, "At the time the survey was in the field, survey respondents were exhibiting signs of tepid optimism: 54% of respondents cite increased capital expenditures as a reason for cash decreases, similar to the 52% who held this view in 2024. Additionally, 58% of respondents believe that the impact of inflationary pressures will decrease cash holdings, a figure unchanged from last year. The new administration had yet to roll out any trade policies or issue concrete directives, and persistent inflation continued (and continues) to be on practitioners' radars."
It comments, "Slightly less than half of respondents (47%) anticipates that their organizations' current cash and short-term investment holdings will remain the same during the second and third quarters of 2025 (i.e., April 2025 through September 2025). Thirty-two percent of respondents expect that their companies' current cash and short-term investment holdings will increase, while 21% predict a decrease in the second and third quarters of 2025. High interest rates, impending tariffs, a volatile stock market and tremendous uncertainty in the economy are likely driving organizations to build their cash and short-term investment holdings."
A section titled, "Current Allocations of Short-Term Investments," tells us, "Companies maintain their investments in relatively few vehicles. Organizations invest in an average 2.57 vehicles for their cash and short-term investments -- slightly lower than the 2.7 average reported in 2024. Most organizations continue to allocate a large share of their short-term investment balances -- an average of 80% -- in safe and liquid investment vehicles: bank deposits, money market funds (MMFs) and Treasury securities. This result is three percentage points lower than the 83% reported in 2024. The typical organization currently maintains 46% of its short-term investments in bank deposits. This allocation is one percentage point lower than last year (2024) but is 9 percentage points lower than the 55% reported in 2022, and lower than both the 52% reported in 2021 and the 51% in 2020. This year's (2025) allocation is similar to percentages reported in 2019 (46%)."
It continues, "Current allocations in Government/Treasury money market mutual funds at 20.4% is an increase of 0.6 percentage points from the figure reported in 2024. The allocation is highest for publicly held companies -- at 26.1% -- than for other organizations. Investment allocations to Treasury securities (including bills, notes and bonds) are 8.7%, lower than the 12.4% reported in 2024. This allocation is more common for companies with annual revenue less than $1 billion, and for those that are net investors and investment grade than for other organizations. Overall, as deposits remained stable, allocations to Government/Treasury money funds, commercial paper, Prime/diversified money market mutual funds increased, while allocations in Treasury securities decreased."
Finally, AFP adds, "Shifting away from direct purchases of Treasury-related securities may signal a desire to diversify allocations through more streamlined investment approaches. This shift could be driven by efforts to automate treasury processes, reducing costs and freeing up time for other strategic initiatives. These shifts in investment vehicles signal that organizations continue to be cautious and are leaning towards allocating their investments in those vehicles which offer stability and safety."
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 June 13) includes Holdings information from 61 money funds (up 14 from two weeks ago), or $3.535 trillion (up from $2.913 trillion) of the $7.346 trillion in total money fund assets (or 48.1%) 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 June 11 News, "June Money Fund Portfolio Holdings: Repo Jumps to 40%, T-Bills Flat.") (Note too: For those attending our upcoming Money Fund Symposium, which is June 23-25, 2025 in Boston, we look forward to seeing you! Attendees and subscribers may access the conference materials via our "Money Fund Symposium 2025 Download Center.")
Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.491 trillion (up from $1.316 trillion two weeks ago), or 42.2%; Repurchase Agreements (Repo) totaling $1.368 trillion (up from $1.076 trillion two weeks ago), or 38.7%, and Government Agency securities totaling $331.9 billion (up from $275.3 billion), or 9.4%. Commercial Paper (CP) totaled $143.4 billion (up from two weeks ago at $116.1 billion), or 4.1%. Certificates of Deposit (CDs) totaled $79.5 billion (up from $51.5 billion two weeks ago), or 2.2%. The Other category accounted for $84.2 billion or 2.4%, while VRDNs accounted for $37.4 billion, or 1.1%.
The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.491 trillion (42.2% of total holdings), Fixed Income Clearing Corp with $423.2B (12.0%), the Federal Home Loan Bank with $209.6 billion (5.9%), JP Morgan with $120.0B (3.4%), RBC with $96.3B (2.7%), BNP Paribas with $85.3B (2.4%), Citi with $82.8B (2.3%), Federal Farm Credit Bank with $81.0B (2.3%), Barclays PLC with $57.4B (1.6%) and Wells Fargo with $56.5B (1.6%).
The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($288.2B), JPMorgan 100% US Treas MMkt ($254.4B), Goldman Sachs FS Govt ($234.5B), Fidelity Inv MM: Govt Port ($234.4B), BlackRock Lq FedFund ($175.6B), Morgan Stanley Inst Liq Govt ($164.9B), State Street Inst US Govt ($157.8B), Fidelity Inv MM: MM Port ($154.5B), BlackRock Lq Treas Tr ($146.9B) and Dreyfus Govt Cash Mgmt ($130.3B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
In related news, ICI also released its latest monthly "Money Market Fund Holdings" summary recently, which reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds. It tells us, "The Investment Company Institute (ICI) reports that, as of the final Friday in May, prime money market funds held 43.7 percent of their portfolios in daily liquid assets and 60.3 percent in weekly liquid assets, while government money market funds held 74.8 percent of their portfolios in daily liquid assets and 85.9 percent in weekly liquid assets." Prime DLA was down from 45.7% in April, and Prime WLA was down from 61.2%. Govt MMFs' DLA fell from 75.1% and Govt WLA was down from 86.0% for the previous month.
ICI explains, "At the end of May, prime funds had a weighted average maturity (WAM) of 28 days and a weighted average life (WAL) of 51 days. Average WAMs and WALs are asset-weighted. Government money market funds had a WAM of 41 days and a WAL of 95 days." Prime WAMs were 3 days longer and WALs were 1 day longer from the previous month. Govt WAMs were 5 days longer and WALs were 2 days longer from April.
Regarding Holdings by Region of Issuer, the release tells us, "Prime money market funds' holdings attributable to the Americas rose from $609.01 billion in April to $614.34 billion in May. Government money market funds' holdings attributable to the Americas rose from $5,122.76 billion in April to $5,152.47 billion in May." The Prime Money Market Funds by Region of Issuer table shows Americas-related holdings at $614.3 billion, or 54.5%; Asia and Pacific at $173.4 billion, or 15.4%; Europe at $310.0 billion, or 27.5%; and, Other (including Supranational) at $29.5 billion, or 2.6%. The Government Money Market Funds by Region of Issuer table shows Americas at $5.152 trillion, or 90.4%; Asia and Pacific at $128.0 billion, or 2.2%; Europe at $391.2 billion, 6.9%, and Other (Including Supranational) at $25.8 billion, or 0.5%.
Finally, see The Wall Street Journal's, "How Stablecoins Can Be Destabilizing," which says, "Stablecoins' going mainstream wouldn't take all of banks' deposits away. Just some of the better ones. The Senate looks set to soon pass the so-called Genius Act, which will set guidelines for issuers of stablecoins -- digital tokens that are fully backed by fiat currencies such as dollars. One big debate over the wisdom of giving stablecoins a regulatory framework centers around how they would affect the current banking system if they were to hugely expand in size."
The piece comments, "Strictly speaking, stablecoins don't take funds out of the banking system. One way or another, these dollars will usually end up back in banks. What banks wind up with, though, could be something very different: the kinds of big, uninsured deposits that make some people nervous. When a U.S.-dollar stablecoin is created, the issuer receives U.S. dollars that they put in reserve. Under proposed guidelines of versions of the Genius Act, stablecoin issuers can hold reserves in bank accounts. They can also buy things such as U.S. Treasurys, which moves cash to the accounts of the sellers of those assets. They can even essentially lend cash to banks, as part of so-called repurchase agreement transactions, as money-market funds often do."
The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (a.k.a. "Flow of Funds") late last week, and among the 4 tables it includes on money market mutual funds, the First Quarter 2025 edition shows that Total MMF Assets increased by $155 billion to $7.398 trillion in Q1'25. The Household Sector, by far the largest investor segment with $4.837 trillion, saw the biggest asset increase in Q1, followed by Nonfinancial Corporate Businesses. The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also showed noticeable increases for the Other Financial Business (formerly Funding Corps) and Rest of the World categories in Q1 2025. (Note: For those attending our upcoming Money Fund Symposium, which is June 23-25, 2025 in Boston, we look forward to seeing you next week! Attendees and subscribers may access the conference materials via our "Money Fund Symposium 2025 Download Center.")
Rest of World, State & Local Governments, Exchange-traded funds, State & Local Govt Retirement and Nonfin Noncorporate Business categories saw small asset increases in Q1, while the Mutual funds, Private Pension Funds, Property-Casualty Insurance and Life Insurance Companies categories saw the only asset decreases last quarter. Over the past 12 months, the Household Sector, Nonfinancial Corporate Business, Other Financial Business and Rest of World categories showed the biggest asset increases, while Mutual funds and Private Pension Funds saw the biggest asset decreases.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $155 billion, or 2.1%, in the first quarter to $7.398 trillion. The largest segment, the Household sector, totals $4.837 trillion, or 65.4% of assets. The Household Sector increased by $119 billion, or 2.5%, in the quarter. Over the past 12 months through March 31, 2025, Household assets were up $732 billion, or 17.8%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $980 billion, or 13.2% of the total. Assets here increased by $18 billion in the quarter, or 1.8%, and they've increased by $107 billion, or 12.2%, over the past year. Other Financial Business was the third-largest investor segment with $530 billion, or 7.2% of money fund shares. This category jumped $19 billion, or 3.8%, in the latest quarter. Other Financial Business, which we believe includes Securities Lending, has increased by $90 billion, or 20.3%, over the previous 12 months.
The Rest of World moved up to fourth place in market share among investor segments with 2.9%, or $218 billion, The fifth-largest segment, Mutual Funds (a recent addition to the tables), held $201 billion (2.7%). Private Pension Funds was the 6th largest category with 2.6% of money fund assets ($192 billion); it was down $600 million for the quarter and down $4 billion, or -2.1% over the last 12 months. while Nonfinancial Noncorporate Business held $143 billion (1.9%), Life Insurance Companies held $101 billion (1.4%), State & Local Governments held $83 billion (1.1%), Property-Casualty Insurance held $51 billion (0.7%), Exchange-traded Funds held $38 billion (0.5%), and State & Local Govt Retirement held $25 billion (0.3%) according to the Fed's Z.1 breakout.
The Fed's "Flow of Funds" Table L.121 shows "Money Market Mutual Funds" largely invested in “Security Repurchase Agreements” with $2.821 trillion, or 38.1% and "Debt Securities," or Credit Market Instruments, with $4.253 trillion, or 57.5% of the total. Debt securities includes: Open market paper ($324 billion, or 4.4%; we assume this is CP), Treasury securities ($2.881 trillion, or 38.9%), Agency and GSE-backed securities ($902 billion, or 12.2%), Municipal securities ($138 billion, or 1.9%) and Corporate and foreign bonds ($8 billion, or 0.1%).
Another large MMF position in the Fed's series includes `Time and savings deposits ($320 billion, or 4.3%). Money funds also hold minor positions in Miscellaneous assets ($3 billion, or 0.0%) and Foreign deposits ($1 billion, 0.0%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $50 billion.
During Q1, Debt Securities were down $74 billion. This subtotal included: Open Market Paper (up $24 billion), Treasury Securities (down $114 billion), Agency- and GSE-backed Securities (up $16 billion), Corporate and Foreign Bonds (up $200 million) and Municipal Securities (down $200 million). In the first quarter of 2025, Security Repurchase Agreements were up $201 billion, Foreign Deposits were down $3 billion, Time and Savings Deposits were up by $56 billion, and Miscellaneous Assets were down $25 billion.
Over the 12 months through 3/31/25, Debt Securities were up $511 billion, which included Open Market Paper (up $8B), Treasury Securities (up $317B), Agencies (up $174B), Municipal Securities (up $10B), and Corporate and Foreign Bonds (up $2B). Foreign Deposits (down $4 billion), Time and Savings Deposits were down $18B, Securities repurchase agreements were up $440 billion and Miscellaneous Assets were up $29B.
The L.121 table shows `Stable NAV money market funds with $7,054 billion, or 95.4% of the total (up $149.2B or 2.2% in Q1 and up $1.275 trillion or 22.1% over 1-year), and Floating NAV money market funds with $344 billion, or 4.6% (up $5.5B or 1.6% in Q1 and down $318B or -48.0% over 1-year). Government money market funds total $6.000 trillion, or 81.1% (up $89.2B or 1.5% in Q1 and up $1.086 trillion or 22.1% over 1-year), Prime money market funds total $1.256 trillion, or 17.0% (up $64.8B or 5.4% in Q1 and down $143B or -10.2% over 1-year) and Tax-exempt money market funds $142B, or 1.9% (up $0.6B or 0.4% in Q1 and up $13B or 10.4% last year).
Note that the Federal Reserve made some changes to its Z.1 tables several years ago. Describing a "Money market funds sector data source change," the report says, "The money market mutual funds (MMF) sector (tables F.121 and L.121) has been revised beginning 2010:Q4 to reflect a change in data source to Securities and Exchange Commission Form NMFP. The level of assets and shares outstanding of the sector have increased due to the inclusion of private placement MMFs in the source data. Changes in the level due to changes in the data source in 2010:Q4 are recorded as other volume changes in the Financial Accounts."
On "Mutual funds sector holdings of money market funds," Z.1 tells us, "The mutual funds sector (tables F.122 and L.122) has been revised beginning 2010:Q4 to reflect holdings of money market funds not previously reported on the tables. In addition, holdings of repurchase agreements, commercial paper, corporate bonds, and miscellaneous assets have been revised. Additional and revised holdings are estimated using data from Morningstar and Investment Company Institute.... The exchange-traded funds sector (tables F.124 and L.124) has been revised beginning 2010:Q4 to reflect holdings of money market funds not previously reported on the tables."
Crane Data's latest Money Fund Intelligence International shows that assets in European or "offshore" money market mutual funds inched lower over the past 30 days to $1.502 trillion, after hitting a record high $1.518 trillion two months prior, while yields were lower. Assets for USD and EUR MMFs rose while GBP MMFs fell over the past month. Like U.S. money fund assets, European MMFs repeatedly hit record highs in 2023, 2024 and early in 2025 but have paused in recent weeks. These U.S.-style money funds, domiciled in Ireland or Luxembourg and denominated in US Dollars, Pound Sterling and Euros, decreased by $3.4 billion over the 30 days through 6/12. The totals are up $69.7 billion (4.9%) year-to-date for 2025, they were up $235.3 billion (19.7%) for 2024 and up $166.9 billion (16.2%) for the year 2023. (Note that currency moves in the U.S. dollar cause Euro and Sterling totals to shift when they're translated back into totals in U.S. dollars. See our latest MFI International for more on the "offshore" money fund marketplace. These funds are only available to qualified, non-U.S. investors and are almost entirely institutional.)
Offshore US Dollar money funds increased $1.5 billion over the last 30 days and are up $40.5 billion YTD to $784.2 billion; they increased $94.1 billion in 2024. Euro funds increased E1.4 billion over the past month. YTD, they're up E17.7 billion to E335.5 billion, for 2024, they increased by E82.9 billion. GBP money funds decreased L5.0 billion over 30 days, and they're up L16.1 billion YTD at L270.7B, for 2024, they rose L19.3 billion. U.S. Dollar (USD) money funds (260) account for over half (52.2%) of the "European" money fund total, while Euro (EUR) money funds (181) make up 24.4% and Pound Sterling (GBP) funds (172) total 23.4%. We summarize our latest "offshore" money fund statistics and our Money Fund Intelligence International Portfolio Holdings (which went out to subscribers Friday), below.
Offshore USD MMFs yield 4.22% (7-Day) on average (as of 6/12/25), down 1 basis point from a month earlier. Yields averaged 4.20% on 12/30/22 and 0.03% on 12/31/21. EUR MMFs, which left negative yield territory in the second half of 2022, yield 2.09% on average, down 8 bps from a month ago and up from 1.48% on 12/30/22 and -0.80% on 12/31/21. Meanwhile, GBP MMFs broke above the 5.0% barrier 22 months ago, but they broke back below 5.0% 11 months ago. They now yield 4.21%, down 8 bps from a month ago, but up from 3.17% on 12/30/22. Sterling yields were 0.01% on 12/31/21.
Crane's June MFI International Portfolio Holdings, with data as of 5/31/25, show that European-domiciled US Dollar MMFs, on average, consist of 28% in Commercial Paper (CP), 16% in Certificates of Deposit (CDs), 24% in Repo, 18% in Treasury securities, 13% in Other securities (primarily Time Deposits) and 1% in Government Agency securities. USD funds have on average 39.7% of their portfolios maturing Overnight, 6.1% maturing in 2-7 Days, 16.0% maturing in 8-30 Days, 8.5% maturing in 31-60 Days, 7.9% maturing in 61-90 Days, 14.2% maturing in 91-180 Days and 7.7% maturing beyond 181 Days. USD holdings are affiliated with the following countries: the US (36.9%), France (11.5%), Canada (10.3%), Japan (8.6%), Australia (5.3%), Germany (4.4%), Sweden (3.8%), the Netherlands (3.6%), the U.K. (3.5%) and Finland (2.8%).
The 10 Largest Issuers to "offshore" USD money funds include: the US Treasury with $141.1 billion (17.8% of total assets), Fixed Income Clearing Corp with $39.0B (4.9%), JP Morgan with $28.7B (3.6%), RBC with $25.9B (3.3%), Credit Agricole with $22.4B (2.8%), Nordea Bank with $20.5B (2.6%), BNP Paribas with $17.6B (2.2%), Barclays PLC with $16.7B (2.1%), Mizuho Corporate Bank Ltd with $15.8B (2.0%) and Sumitomo Mitsui Banking Corp with $15.5B (1.9%).
Euro MMFs tracked by Crane Data contain, on average 35% in CP, 24% in CDs, 17% in Other (primarily Time Deposits), 22% in Repo, 2% in Treasuries and 0% in Agency securities. EUR funds have on average 42.9% of their portfolios maturing Overnight, 8.4% maturing in 2-7 Days, 10.4% maturing in 8-30 Days, 10.4% maturing in 31-60 Days, 8.5% maturing in 61-90 Days, 12.3% maturing in 91-180 Days and 7.1% maturing beyond 181 Days. EUR MMF holdings are affiliated with the following countries: France (28.0%), Japan (11.3%), the U.S. (10.4%), Canada (9.5%), Germany (7.0%), the U.K. (5.6%), the Netherlands (5.3%), Australia (3.7%), Spain (3.1%) and Sweden (3.0%).
The 10 Largest Issuers to "offshore" EUR money funds include: Credit Agricole with E16.3B (5.5%), BNP Paribas with E14.5B (4.9%), JP Morgan with E14.0B (4.7%), Societe Generale with E12.0B (4.0%), DZ Bank AG with E9.7B (3.3%), Sumitomo Mitsui Banking Corp with E9.6B (3.2%), Republic of France with E8.4B (2.8%), Agence Central de Organismes de Securite Sociale with E8.2B (2.8%), ING Bank with E8.2B (2.8%) and Bank of Nova Scotia with E7.4B (2.5%).
The GBP funds tracked by MFI International contain, on average (as of 5/31/25): 38% in CDs, 17% in CP, 23% in Other (Time Deposits), 20% in Repo, 2% in Treasury and 0% in Agency. Sterling funds have on average 36.6% of their portfolios maturing Overnight, 6.6% maturing in 2-7 Days, 8.2% maturing in 8-30 Days, 11.6% maturing in 31-60 Days, 13.0% maturing in 61-90 Days, 15.4% maturing in 91-180 Days and 8.5% maturing beyond 181 Days. GBP MMF holdings are affiliated with the following countries: France (15.3%), Japan (14.0%), Canada (12.8%), the U.K. (12.0%), Australia (10.3%), the U.S. (10.2%), the Netherlands (4.6%), Singapore (3.7%), Germany (3.0%) and Abu Dhabi (2.6%).
The 10 Largest Issuers to "offshore" GBP money funds include: UK Treasury with L16.4B (6.5%), RBC with L11.9B (4.7%), BNP Paribas with L11.8B (4.7%), Mizuho Corporate Bank Ltd with L10.1 (4.0%), National Australia Bank Ltd with L9.2B (3.7%), JP Morgan with L8.7B (3.4%), Sumitomo Mitsui Banking Corp with L8.0B (3.2%), Toronto-Dominion Bank with L7.8B (3.1%), Commonwealth Bank of Australia with L7.5B (3.0%), and Mitsubishi UFJ Financial Group Inc with L7.4B (2.9%).
The June issue of our Bond Fund Intelligence, which was sent to subscribers Friday morning, features the stories, "Franklin Converts Putnam Muni Funds to ETFs; Vanguard," which covers Franklin Templeton converting 10 Putnam Municipal Bond Mutual Funds to ETFs, and "JPM: Low-Duration BFs See Inflows; Vanguard Core Bond," which looks at JPM's recent Mid-Week US Short Duration Update. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns were mixed in May while yields were lower. We excerpt from the new issue below. (Contact us if you'd like to see our latest Bond Fund Intelligence and BFI XLS spreadsheet, or our Bond Fund Portfolio Holdings data.)
BFI's lead article states, "A press release titled, 'Franklin Templeton to Convert 10 Putnam Municipal Bond Mutual Funds to ETFs,' tells us, 'Franklin Templeton ... announced plans to convert 10 Putnam municipal bond mutual funds into exchange-traded funds (ETFs), marking a significant expansion of its municipal bond ETF lineup following the acquisition of Putnam Investments in January 2024. The conversions are expected to be completed between the fourth quarter of 2025 and the first quarter of 2026.'"
It continues, "The funds selected, which will become part of the Franklin Templeton ETF platform, include: Putnam California Tax Exempt Income Fund; Putnam Massachusetts Tax Exempt Income Fund; Putnam Minnesota Tax Exempt Income Fund; Putnam New Jersey Tax Exempt Income Fund; Putnam New York Tax Exempt Income Fund; Putnam Ohio Tax Exempt Income Fund; Putnam Pennsylvania Tax Exempt Income Fund; Putnam Short-Term Municipal Income Fund; Putnam Tax Exempt Income Fund; and, Putnam Tax-Free High Yield Fund."
Our "JPM" article states, "J.P. Morgan recently published a 'JPM Mid-Week US Short Duration Update,' titled, 'April showers low-duration bond funds with inflows.' It states, 'Low-duration bond funds posted another solid month of inflows in April, pulling in $13bn and bringing total AUMs across the funds we track to $868bn. This marks the fourth straight month of net inflows, with year-to-date totals reaching $43bn, a roughly 5% increase since the start of the year.'"
It continues, "They write, 'Most strategies across the low-duration space saw inflows during the month..., but short-term government funds stood out. These funds took in $3.6bn in April alone, accounting for 58% of their YTD inflows. So far in 2025, short-term government funds have garnered $6.2bn, already surpassing full year inflows in comparison to any of the past six years outside of 2020.'"
Our first News brief, "Returns Flat, Yields Inch Lower in May." says, "Bond fund returns were mixed in May after rising in April. Our BFI Total Index rose 0.10% over 1-month and rose 5.40% over 12 months. (Money funds rose 4.66% over 1-year as measured by our Crane 100 Index.) The BFI 100 decreased 0.08% in May and rose 5.99% over 12 mos. Our BFI Conservative Ultra-Short Index was up 0.35% over 1-month and 5.14% for 1-year; Ultra-Shorts rose 0.31% and 5.46%. Short-Term returned 0.15% and 6.35%, and Intm-Term fell 0.47% in May and 5.84% over 12 mos. BFI’s Long-Term Index was down 0.53% and up 5.20%. High Yield returned 1.45% in May and 7.47% over 12 mos."
A second News brief, "'Vanguard Launches a New Actively Managed Bond ETF' says a press release. It explains, 'Vanguard ... launched Vanguard Multi-Sector Income Bond ETF (VGMS), an actively managed fixed income ETF overseen by Vanguard Fixed Income Group.'"
Our next News brief, "'Franklin Templeton to Shutter Two Unpopular Bond ETFs' Writes ETF.com. They write, 'Franklin Templeton will liquidate two actively managed bond exchange-traded funds this summer, shuttering the Western Asset Short Duration Income ETF (WINC) and the Western Asset Total Return ETF (WBND) after they failed to gain investor traction.'"
A BFI sidebar, "Payden US Govt Turns 30," tells us, "A press release, 'Payden U.S. Government Fund Turns 30,' states, 'Payden & Rygel is proud to celebrate the 30-year anniversary of the Payden U.S. Government Fund (PYUSX), a bond fund that invests in U.S. Treasuries, government agency debentures and agency mortgage-backed securities with an average portfolio maturity of less than five years.'"
Finally, another sidebar, "Barron's: Bond ETFs to Buy," says, "Barron's writes, 'Bond ETFs to Buy in a World of Trump-Induced Volatility,' which tells us, 'May was bad enough for Treasury bonds that many income investors were likely tempted to rush to the safety of their mattress. That is never a great idea. There are still plenty of high-yielding bond options that offer a measure of safety and yield that should allow investors to have to have their income and sleep at night, too.'"
The Registration Statement for Stablecoin issuer Circle Internet Group, which went public earlier this month, contains a number of discussions of stablecoins and tokenized money market funds. We quote from a number of these below. Discussing "Our role in driving stablecoin adoption," they write, "We have built one of the largest and most widely used stablecoin networks. At the foundation of the Circle stablecoin network are our payment stablecoins, USDC -- which, according to CoinMarketCap, is the second largest stablecoin as measured by the amount of stablecoins in circulation with a 24% share of the stablecoin market as of December 31, 2024 -- and EURC -- which, according to CoinGecko, is the largest euro-denominated stablecoin as measured by the amount of stablecoins in circulation as of March 28, 2025." (Note: Crane Data shows Circle Reserve Fund Inst (USDXX), the main collateral behind USDC, with $52.7 billion in assets yielding 4.23% on 6/10.)
Circle tells us, "USDC and EURC are liquid, stable, and digitally native forms of U.S. dollars and euros, respectively, built on an open protocol and a regulatorily compliant platform. Each maintains 24/7, borderless, and near-instant value transfer capabilities. USDC and EURC are redeemable on a one-for-one basis for U.S. dollars and euros, respectively, directly from us by Circle Mint customers ... as well as by end-users that are not Circle Mint customers in our role as the redeemer of last resort.... In addition, all end-users can sell or exchange USDC and EURC in the secondary market. USDC and EURC and the overall Circle stablecoin network are further discussed under '`Our platform, products, and ecosystem.'"
They comment, "Circle Tokenized Funds are regulated yield-bearing investments for collateral use in capital markets. We believe that certain major trading firms have moved, and will increasingly move away from, using stablecoins as collateral in favor of TMMFs. However, other TMMF issuers may be limited in their ability to provide significant instantaneous redeemability for equivalent underlying assets. We believe that the ability of a well-regulated stablecoin such as USDC to provide near-instantaneous redemption can offer a substantial advantage for this emerging trend of using TMMFs as collateral for margin trading on various digital asset trading platforms, maximizing capital efficiency in the flows between settlement assets and collateral and at the same time, reducing counterparty execution risk. Moreover, TMMF issuers typically operate on a single blockchain or have limited interoperability across different blockchain platforms."
Circle's prospectus says, "To serve this objective, on January 21, 2025, we acquired Hashnote and its TMMF, USYC, which is a tokenized product offered in reliance upon an exemption to the registration requirements of the Securities Act. USYC serves as an onchain representation of the shares in Hashnote International Short Duration Yield Fund Ltd. ('SDYF') and is intended primarily for use as collateral on digital asset trading platforms. Unlike payment stablecoins that offer no yield, TMMFs like USYC offer yield to the token holders that is generated from its invested assets consisting primarily of reverse repurchase agreements on U.S. government and government-backed securities and short-term U.S. Treasury securities. According to RWA.xyz, USYC is the largest onchain TMMF in terms of assets under management, with approximately $1.6 billion in assets under management as of December 31, 2024."
It states, "On February 13, 2025, we received approval to issue USYC and offer Circle Mint accounts out of Bermuda under our existing Digital Assets Business Act ('DABA') License granted by the Bermuda Monetary Authority ('BMA'). We plan to integrate USYC into the Circle stablecoin network, offering eligible customers the ability to move between the non-yield bearing Circle payment stablecoins and USYC at the settlement speed of the blockchain."
Discussing "Circle Reserve Management," they write, "Sound reserve management (ensuring liquidity and preservation of reserve assets) is central to our operations. The Circle stablecoin network benefits from the strength, operating resiliency, and risk management capabilities of the leading financial institutions that are part of our reserve management infrastructure. We hold reserves in a manner designed to ensure liquidity and preservation of reserve assets.... [W]e (i) limit Circle stablecoin reserves to highly liquid financial instruments, (ii) hold reserves in accounts that are titled FBO holders of USDC and EURC, respectively, and (iii) do not lend, borrow against, or encumber the reserves."
Circle explains, "As of December 31, 2024, we held approximately 85% of USDC reserves in the Circle Reserve Fund, a government money market fund pursuant to Rule 2a-7 under the Investment Company Act of 1940, as amended (the '1940 Act') managed by BlackRock, one of the world's largest asset managers, and available only to us. The assets within the Circle Reserve Fund are held in the custody of The Bank of New York Mellon ('BNY'), one of the largest asset custodians in the world.... The remaining portion of USDC reserves (typically 10-20%) are held as cash in accounts that are titled FBO holders of USDC, primarily with banks designated by the Financial Stability Board as global systemically important banks ('GSIBs').... A small fraction of USDC reserves is held as cash within several additional banks, which facilitate the flow of funds from reserves to Circle Mint customers. Currently, all EURC reserves are held only in cash."
They add, "Core to our reserve management infrastructure is reporting and independent assurance. Since the launch of USDC in September 2018 and EURC in June 2022, we have provided full transparency into assets comprising Circle stablecoin reserves, first on a monthly basis (on our website), then on a weekly basis (also on our website), and now, in the case of the Circle Reserve Fund, on a daily basis (on BlackRock's website). Furthermore, since USDC's launch, we have provided the public with independent, third-party monthly assurance over the value and composition of these assets from a leading public accounting firm (currently, a Big Four firm), whose reports are available for both USDC and EURC on our website."
Circle warns, "Our current or future competitors may develop products or services that are similar to our products and services or that achieve greater market acceptance than our products and services, which could attract end-users and customers away from our products and services. For example, we are seeing a rapidly evolving market structure in digital asset trading markets, and certain major trading firms are moving towards TMMFs as a form of collateral. Particularly in the current high interest rate environment, the option to invest in TMMFs or other yield-bearing digital assets has become increasingly attractive relative to holding non-yield bearing stablecoins.... Therefore, as TMMFs become more readily accessible and widely integrated on blockchains as a form of collateral in margin trading, we expect to continue to see a shift toward the use of TMMFs or other yield-bearing digital assets, which could adversely affect the competitiveness and usage of USDC and EURC in this type of use case."
They write, "With significant growth in the stablecoin market and an increasing understanding that it represents one of the largest potential new markets for financial and payments infrastructures, we expect to continue to see intense competition. In addition, the emergence of yield-bearing digital assets represents an additional source of competition, particularly in light of the current high interest rate environment, which has amplified the opportunity cost of holding stablecoins relative to other yield-bearing digital assets."
Circle's prospectus also says, "As an example of such an adverse impact, the amount of USDT in circulation (the largest stablecoin by stablecoins in circulation, issued by Tether) increased while the amount of USDC in circulation declined for nearly a one year period from late 2022 to late 2023, which we believe reflects the different use cases and underlying competitive dynamics for the two stablecoins. New categories of products that provide novel and attractive features, such as yield-bearing digital assets (including TMMFs), could also gain market acceptance at any time, which may compete with Circle stablecoins and cannibalize our market share, particularly if we fail to anticipate such market shifts or are slow to enter into these nascent markets."
They state, "In addition, we intend to issue TMMFs, including USYC, through our acquisition of Hashnote. The issuance of TMMFs represents a new facet of our business, and there is no guarantee that we will be successful. USYC may not gain traction relative to existing TMMFs and new TMMFs that compete with USYC may enter the market at any time. In addition, the success of USYC may adversely affect the competitiveness of USDC and EURC as margin collateral, as trading participants naturally gravitate towards yield-bearing digital assets in this particular type of use case. Our entry into this market may also impact our marketing strategy, and we may not be able to anticipate how our customers, shareholders, and the market will perceive and respond to any such shift. The pursuit of new product offerings may also divert management's attention and redirect the flow of resources away from USDC and EURC. The risks associated with issuing a TMMF in general, and the specific risks of incorporating them into our existing business model, could hinder our ability to successfully implement our business plans and achieve our strategic objectives."
They tell us, "Privately issued stablecoins may be subject to the risk of significant and concentrated redemption requests, even when they are fully reserved with high quality liquid assets such as cash and short-dated U.S. government obligations. If we experience significant and concentrated redemption requests with respect to one or more Circle stablecoins, we may need to liquidate a significant portion of Circle stablecoin reserve assets to meet such requests. In extreme cases, the market for the short-dated U.S. government obligations held by the Circle Reserve Fund might not be sufficiently liquid for BlackRock to liquidate them in a way that allows us to meet redemption demands in a timely manner."
Circle adds, "Market participants have increasingly shown concern about the sufficiency and liquidity of reserves for dollar-denominated stablecoins such as USDT and USDC, including due to issues in the traditional financial markets. For example, in March 2023, we announced that we had initiated transfers of the more than $3 billion of deposits from Silicon Valley Bank ('SVB') to other banks, but those transfers failed to settle before the Federal Deposit Insurance Corporation (the 'FDIC') placed the bank into receivership. Although all of these funds were ultimately made available and transferred to new banks, concerns related to Circle's access to these funds caused USDC to experience a temporary price dislocation on certain secondary trading markets during the period when banks were closed and until the resulting backlog of redemption requests had been cleared, and the amount of USDC in circulation decreased thereafter."
Finally, they comment, "In addition, given the foundational role that stablecoins play in global digital asset markets, stablecoin growth has been tied closely to growth in digital asset markets. As a result, systemic risks that manifest themselves in the digital asset markets may lead to higher-than-normal redemption requests on Circle stablecoins, which could lead to significant and concentrated redemption requests with respect to one or more Circle stablecoins. The collapse of TerraUSD and LUNA in May 2022 underscored the risks associated with algorithmic tokens, which are continuing to play out as trading firms and retail and institutional lenders are facing liquidation and insolvency in the aftermath, as reflected in the Voyager Digital Ltd. and Celsius Network LLC insolvency proceedings, among others.... The introduction of a government-issued digital currency could eliminate or reduce the need or demand for private-sector issued stablecoins, or significantly limit their utility. National governments around the world could introduce CBDCs, which could in turn limit the size of the market opportunity for USDC, EURC, and other potential future Circle stablecoins."
Crane Data's June Money Fund Portfolio Holdings, with data as of May 31, 2025, show that holdings of Repo jumped last month while Treasuries declined. Money market securities held by Taxable U.S. money funds (tracked by Crane Data) increased by $72.0 billion to $7.271 trillion in May, after decreasing by $73.8 billion in April and increasing $45.6 billion in March. Assets rose by $53.7 billion in February, $84.1 billion in January, and $88.0 billion in December. They rose by $190.8 billion in November, $82.8 billion in October and $233.8 billion in September. Repo, the largest segment, increased $63.3 billion in May. Treasuries, the second largest portfolio composition segment, decreased by $2.1 billion. Agencies were the third largest segment, and CP remained fourth, ahead of CDs, Other/Time Deposits and VRDNs. Below, we review our Money Fund Portfolio Holdings statistics. (Visit our Content center to download, or contact us to request our latest Portfolio Holdings reports.)
Among taxable money funds, Repurchase Agreements (repo) increased $63.3 billion (2.2%) to $2.906 trillion, or 40.0% of holdings, in May, after increasing $31.4 billion in April, $92.7 billion in March and $173.9 billion in February. Treasury securities decreased $2.1 billion (-0.1%) to $2.706 trillion, or 37.2% of holdings, after decreasing $168.3 billion in April, $83.3 billion in March and $118.3 billion in February. Government Agency Debt was up $4.8 billion, or 0.5%, to $976.4 billion, or 13.4% of holdings. Agencies increased $75.1 billion in April and $16.1 billion in March, but decreased $6.5 billion in February. Repo, Treasuries and Agency holdings now total $6.588 trillion, representing a massive 90.6% of all taxable holdings.
Money fund holdings of CP and CDs rose in May, while Other (Time Deposits) fell. Commercial Paper (CP) increased $8.7 billion (2.9%) to $311.5 billion, or 4.3% of holdings. CP holdings decreased $9.6 billion in April, but increased $7.6 billion in March and $4.4 billion in February. Certificates of Deposit (CDs) increased $4.2 billion (2.1%) to $202.7 billion, or 2.8% of taxable assets. CDs increased $4.0 billion in April and $4.1 billion in March, but decreased $5.0 billion in February. Other holdings, primarily Time Deposits, decreased $6.8 billion (-4.2%) to $153.8 billion, or 2.1% of holdings, after decreasing $6.6 billion in April, increasing $8.2 billion in March, and increasing $5.0 billion in February. VRDNs decreased to $14.8 billion, or 0.2% of assets. (Note: This total is VRDNs for taxable funds only. We will post our Tax Exempt MMF holdings separately Wednesday around noon.)
Prime money fund assets tracked by Crane Data increased to $1.248 trillion, or 17.2% of taxable money funds' $7.271 trillion total. Among Prime money funds, CDs represent 16.2% (up from 16.0% a month ago), while Commercial Paper accounted for 25.0% (up from 24.4% a month ago). The CP totals are comprised of: Financial Company CP, which makes up 15.2% of total holdings, Asset-Backed CP, which accounts for 7.5%, and Non-Financial Company CP, which makes up 2.3%. Prime funds also hold 0.4% in US Govt Agency Debt, 5.4% in US Treasury Debt, 21.3% in US Treasury Repo, 0.8% in Other Instruments, 9.6% in Non-Negotiable Time Deposits, 8.1% in Other Repo, 12.1% in US Government Agency Repo and 0.9% in VRDNs.
Government money fund portfolios totaled $3.920 trillion (53.9% of all MMF assets), up from $3.913 trillion in April, while Treasury money fund assets totaled another $2.102 trillion (28.9%), up from $2.042 trillion the prior month. Government money fund portfolios were made up of 24.8% US Govt Agency Debt, 19.5% US Government Agency Repo, 27.7% US Treasury Debt, 27.5% in US Treasury Repo, 0.4% in Other Instruments. Treasury money funds were comprised of 73.8% US Treasury Debt and 26.1% in US Treasury Repo. Government and Treasury funds combined now total $6.022 trillion, or 82.8% of all taxable money fund assets.
European-affiliated holdings (including repo) increased by $27.0 billion in May to $806.4 billion; their share of holdings rose to 11.1% from last month's 10.8%. Eurozone-affiliated holdings increased to $553.6 billion from last month's $531.4 billion; they account for 7.6% of overall taxable money fund holdings. Asia & Pacific related holdings fell to $300.4 billion (4.1% of the total) from last month's $306.5 billion. Americas related holdings rose to $6.154 trillion from last month's $6.103 trillion; they now represent 84.7% of holdings.
The overall taxable fund Repo totals were made up of: US Treasury Repurchase Agreements (up $8.7 billion, or 0.5%, to $1.890 trillion, or 26.0% of assets); US Government Agency Repurchase Agreements (up $48.7 billion, or 5.6%, to $914.0 billion, or 12.6% of total holdings), and Other Repurchase Agreements (up $5.9 billion, or 6.1%, from last month to $101.4 billion, or 1.4% of holdings). The Commercial Paper totals were comprised of Financial Company Commercial Paper (up $4.4 billion to $189.4 billion, or 2.6% of assets), Asset Backed Commercial Paper (up $2.2 billion at $93.0 billion, or 1.3%), and Non-Financial Company Commercial Paper (up $2.0 billion to $29.0 billion, or 0.4%).
The 20 largest Issuers to taxable money market funds as of May 31, 2025, include: the US Treasury ($2.706T, 37.2%), Fixed Income Clearing Corp ($935.3, 12.9%), Federal Home Loan Bank ($734.9B, 10.1%), the Federal Reserve Bank of New York ($281.8B, or 3.9%), JP Morgan ($265.6B, 3.7%), RBC ($219.6B, 3.0%), Citi ($190.9B, 2.6%), BNP Paribas ($171.6B, 2.4%), Federal Farm Credit Bank ($166.2B, 2.3%), Bank of America ($117.3B, 1.6%), Barclays ($115.8B, 1.6%), Wells Fargo ($91.8B, 1.3%), Sumitomo Mitsui Banking Corp ($77.5B, 1.1%), Credit Agricole ($75.0B, 1.0%), Goldman Sachs ($73.6B, 1.0%), Mitsubishi UFJ Financial Group ($67.6B, 0.9%), Canadian Imperial Bank of Commerce ($58.8B, 0.8%), Societe Generale ($55.8B, 0.8%), Toronto-Dominion Bank ($49.0B, 0.7%) and Bank of Montreal ($46.8B, 0.6%).
In the repo space, the 10 largest Repo counterparties (dealers) with the amount of repo outstanding and market share (among the money funds we track) include: Fixed Income Clearing Corp ($912.0B, 31.4%), the Federal Reserve Bank of New York ($281.8B, 9.7%), JP Morgan ($252.0B, 8.7%), Citi ($178.0B, 6.1%), RBC ($177.8B, 6.1%), BNP Paribas ($160.1B, 5.5%), Barclays ($98.1B, 3.4%), Bank of America ($93.9B, 3.2%), Wells Fargo ($90.9B, 3.1%), and Goldman Sachs ($72.8B, 2.5%).
The largest users of the $281.8 billion in Fed RRP include: Fidelity Cash Central Fund ($43.0), Fidelity Govt Money Market ($31.9B), Fidelity Sec Lending Cash Central Fund ($24.6B), Vanguard Federal Money Mkt Fund ($19.9B), Fidelity Inv MM: Govt Port ($17.2B), Fidelity Inv MM: Treas Port ($16.4B), Vanguard Market Liquidity Fund ($14.9B), Fidelity Money Market ($8.9B), American Funds Central Cash ($8.3B) and Fidelity Treasury Fund ($8.1B).
The 10 largest issuers of "credit" -- CDs, CP and Other securities (including Time Deposits and Notes) combined -- include: RBC ($41.8B, 7.0%), Toronto-Dominion Bank ($29.8B, 5.0%), Bank of America ($23.4B, 3.9%), Mitsubishi UFJ Financial Group Inc ($23.4B, 3.9%), Fixed Income Clearing Corp ($23.3B, 3.9%), ING Bank ($22.2B, 3.7%), Australia & New Zealand Banking Group Ltd ($22.1B, 3.7%), Skandinaviska Enskilda Banken AB ($21.0B, 3.5%), Canadian Imperial Bank of Commerce ($21.0B, 3.5%) and Mizuho Corporate Bank Ltd ($20.4B, 3.4%).
The 10 largest CD issuers include: Sumitomo Mitsui Banking Corp ($15.4B, 7.6%), Mitsubishi UFJ Financial Group Inc ($15.4B, 7.6%), Bank of America ($15.3B, 7.5%), Credit Agricole ($14.3B, 7.1%), Sumitomo Mitsui Trust Bank ($14.1B, 7.0%), Toronto-Dominion Bank ($12.1B, 6.0%), Mizuho Corporate Bank Ltd ($10.3B, 5.1%), Canadian Imperial Bank of Commerce ($9.9B, 4.9%), Mitsubishi UFJ Trust and Banking Corporation ($8.8B, 4.3%) and Truist Financial Corp. ($7.8B, 3.8%).
The 10 largest CP issuers (we include affiliated ABCP programs) include: RBC ($23.7B, 8.3%), Toron-to-Dominion Bank ($17.6B, 6.2%), Bank of Montreal ($14.5B, 5.1%), JP Morgan ($13.7B, 4.8%), Barclays PLC ($11.5B, 4.0%), National Bank of Canada ($9.9B, 3.5%), Landesbank Baden-Wurttemberg ($9.8B, 3.4%), Australia & New Zealand Banking Group Ltd ($8.2B, 2.9%), Mitsubishi UFJ Financial Group Inc ($8.0B, 2.8%) and Bank of Nova Scotia ($8.0B, 2.8%).
The largest increases among Issuers include: RBC (up $72.8B to $219.6B), the Federal Reserve Bank of New York (up $67.4B to $281.8B), Citi (up $9.3B to $190.9B), BNP Paribas (up $7.6B to $171.6B), Barclays PLC (up $6.6B to $115.8B), Wells Fargo (up $6.0B to $91.8B), Truist Financial Corp. (up $5.0B to $11.6B), Sumitomo Mitsui Banking Corp (up $4.2B to $77.5B), Federal Home Loan Mortgage Corp (up $4.1B to $42.5B) and Bank of Nova Scotia (up $4.0B to $32.7B).
The largest decreases among Issuers of money market securities (including Repo) in May were shown by: Fixed Income Clearing Corp (down $66.3B to $935.3B), Bank of America (down $20.9B to $117.3B), JP Morgan (down $14.5B to $265.6B), Goldman Sachs (down $8.0B to $73.6B), Mitsubishi UFJ Financial Group Inc (down $7.3B to $67.6B), Nomura (down $5.8B to $26.1B), DNB ASA (down $2.3B to $9.3B), the US Treasury (down $2.1B to $2.706T), Australia & New Zealand Banking Group Ltd (down $2.0B to $33.5B) and Svenska Handelsbanken (down $1.4B to $8.0B).
The United States remained the largest segment of country-affiliations; it represents 78.9% of holdings, or $5.733 trillion. Canada (5.8%, $420.9B) was in second place, while France (4.8%, $346.8B) was No. 3. Japan (3.8%, $272.4B) occupied fourth place. The United Kingdom (2.7%, $197.7B) remained in fifth place. Germany (0.8%, $54.9B) was in sixth place, followed by Netherlands (0.7%, $53.7B), Australia (0.7%, $53.3B), Spain (0.5%, $39.1B), and Sweden (0.5%, $35.7B). (Note: Crane Data attributes Treasury and Government repo to the dealer's parent country of origin, though money funds themselves "look-through" and consider these U.S. government securities. All money market securities must be U.S. dollar-denominated.)
As of May 31, 2025, Taxable money funds held 50.2% (down from 52.5%) of their assets in securities maturing Overnight, and another 11.5% maturing in 2-7 days (up from 9.6%). Thus, 61.8% in total matures in 1-7 days. Another 9.1% matures in 8-30 days, while 10.4% matures in 31-60 days. Note that over three-quarters, or 81.2% of securities, mature in 60 days or less, the dividing line for use of amortized cost accounting under SEC regulations. The next bucket, 61-90 days, holds 4.2% of taxable securities, while 9.0% matures in 91-180 days, and just 5.6% matures beyond 181 days.
Crane Data's latest monthly Money Fund Portfolio Holdings statistics will be sent out Tuesday, and we'll be writing our regular monthly update on the new June data for Wednesday's News. But we also already uploaded a separate and broader Portfolio Holdings data set based on the SEC's Form N-MFP filings on Monday. (We continue to merge the two series, and the N-MFP version is now available via our Portfolio Holdings file listings to Money Fund Wisdom subscribers.) Our new N-MFP summary, with data as of May 31, includes holdings information from 1003 money funds (up 11 from last month), representing assets of $7.425 trillion (down from $7.367 trillion a month ago). Prime MMFs rose to $1.139 trillion (up from $1.137 trillion), or 15.3% of the total. We review the new N-MFP data, and we also look at our revised MMF expense data, which shows charged expenses were mostly flat and money fund revenues rose to $19.9 billion (annualized) in May.
Our latest Form N-MFP Summary for All Funds (taxable and tax-exempt) shows Treasuries and Repurchase Agreements (Repo) remain the largest types of portfolio holdings in money market funds. Treasury holdings in money market funds now total $2.699 trillion (down from $2.714 trillion), or 36.4% of all assets, while Repo holdings rose to $2.912 trillion (up from $2.849 billion), or 39.2% of all holdings. Government Agency securities total $982.8 billion (up from $978.9 billion), or 13.2%. Holdings of Treasuries, Government agencies and Repo (almost all of which is backed by Treasuries and agencies) combined total $6.594 trillion, or a massive 88.8% of all holdings.
The Other category (primarily Time Deposits) totals $163.1 billion (down from $170.0 billion), or 2.2%, and Commercial paper (CP) totals $321.6 billion (up from $313.2 billion), or 4.3% of all holdings. Certificates of Deposit (CDs) total $202.6 billion (up from $198.4 billion), 2.7%, and VRDNs account for $143.5 billion (up from $142.9 billion), or 1.9% of money fund securities.
Broken out into the SEC's more detailed categories, the CP totals were comprised of: $189.4 billion, or 2.6%, in Financial Company Commercial Paper; $93.0 billion or 1.3%, in Asset Backed Commercial Paper; and, $39.2 billion, or 0.5%, in Non-Financial Company Commercial Paper. The Repo totals were made up of: U.S. Treasury Repo ($1.908 trillion, or 25.7%), U.S. Govt Agency Repo ($899.3B, or 12.1%) and Other Repo ($104.4B, or 1.4%).
The N-MFP Holdings summary for the Prime Money Market Funds shows: CP holdings of $278.5 billion (up from $272.3 billion), or 24.4%; Repo holdings of $487.2 billion (up from $486.0 billion), or 42.8%; Treasury holdings of $65.4 billion (down from $73.6 billion), or 5.7%; CD holdings of $175.5 billion (up from $172.1 billion), or 15.4%; Other (primarily Time Deposits) holdings of $116.4 billion (up from $116.3 billion), or 10.2%; Government Agency holdings of $5.4 billion (down from $5.8 billion), or 0.5% and VRDN holdings of $10.7 billion (up from $10.7 billion), or 0.9%.
The SEC's more detailed categories show CP in Prime MMFs made up of: $170.6 billion (up from $166.5 billion), or 15.0%, in Financial Company Commercial Paper; $82.4 billion (up from $80.5 billion), or 7.2%, in Asset Backed Commercial Paper; and $25.6 billion (up from $25.4 billion), or 2.2%, in Non-Financial Company Commercial Paper. The Repo totals include: U.S. Treasury Repo ($250.4 billion, or 22.0%), U.S. Govt Agency Repo ($146.8 billion, or 12.9%), and Other Repo ($89.9 billion, or 7.9%).
In related news, money fund charged expense ratios (Exp%) were mostly flat in May. Our Crane 100 Money Fund Index and Crane Money Fund Average were 0.27% and 0.37%, respectively, as of May 31, 2025. Crane Data revises its monthly expense data and gross yield information after the SEC updates its latest Form N-MFP data the morning of the 6th business day of the new month. (They posted this info Monday morning, so we revised our monthly MFI XLS spreadsheet and historical craneindexes.xlsx averages file to reflect the latest expenses, gross yields, portfolio composition and maturity breakout.) Visit our "Content" page for the latest files.
Our Crane 100 Money Fund Index, a simple average of the 100 largest taxable money funds, shows an average charged expense ratio of 0.27%, unchanged from last month's level (also 19 bps higher than 12/31/21's 0.08%). The Crane Money Fund Average, a simple average of all taxable MMFs, showed a charged expense ratio of 0.37% as of May 31, 2025, unchanged from the month prior and slightly below the 0.40% at year-end 2019.
Prime Inst MFs expense ratios (annualized) average 0.23% (unchanged from last month), Government Inst MFs expenses average 0.25% (down 1 bp from last month), Treasury Inst MFs expenses average 0.28% (unchanged from last month). Treasury Retail MFs expenses currently sit at 0.52%, (unchanged from last month), Government Retail MFs expenses yield 0.54% (unchanged from last month). Prime Retail MF expenses averaged 0.49% (unchanged from last month). Tax-exempt expenses were unchanged at 0.40% on average.
Gross 7-day yields were slightly lower during the month ended May 31, 2025. The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 728), shows a 7-day gross yield of 4.38%, down 1 bp from the prior month. The Crane Money Fund Average was 1.72% at the end of 2019, 0.15% at the end of 2020 and 0.09% at the end of 2021. Our Crane 100's 7-day gross yield was also down 2 bps, ending the month at 4.38%.
According to our revised MFI XLS and Crane Index numbers, we now estimate that annualized revenue for all money funds is a record high $19.854 billion (as of 5/31/25). Our estimated annualized revenue totals increased from $19.551B last month and also higher than $19.659B seen two months ago. Revenue levels are more than six times larger than May's 2021's record-low $2.927B level. Charged expenses and gross yields are driven by a number of variables, but revenues should continue their climb higher as inflows resume to money funds following a pause around April 15.
Crane Data's latest monthly Money Fund Market Share rankings show assets mostly higher among the largest U.S. money fund complexes in May after being lower in April. Assets increased in March, February, January, December, November, October, September, August, July, and June 2024. Money market fund assets rose by $90.4 billion, or 1.2%, last month to a record $7.407 trillion. Total MMF assets have increased by $77.6 billion, or 1.1%, over the past 3 months, and they've increased by $932.9 billion, or 14.4%, over the past 12 months. The largest increases among the 25 largest managers last month were seen by BlackRock, JPMorgan, Vanguard, First American and Federated Hermes, which grew assets by $16.1 billion, $15.8B, $14.5B, $9.6B and $9.1B, respectively. Declines in May were seen by Goldman Sachs, HSBC, AllianceBernstein, PGIM and Morgan Stanley, which decreased by $6.4 billion, $4.0B, $1.9B, $1.5B and $949M, respectively. Our domestic U.S. "Family" rankings are available in our MFI XLS product, our global rankings are available in our MFI International product. The combined "Family & Global Rankings" are available to Money Fund Wisdom subscribers. We review the latest market share totals, and look at money fund yields, which were flat to slightly lower in May.
Over the past year through May 31, 2025, Fidelity (up $211.2B, or 16.1%), Schwab (up $118.1B, or 22.4%), JPMorgan (up $116.9B, or 17.7%), BlackRock (up $112.5B, or 21.5%) and Vanguard (up $95.9B, or 16.0%) were the `largest gainers. Vanguard, American Funds, Fidelity, BlackRock and Schwab had the largest asset increases over the past 3 months, rising by $35.8B, $29.2B, $24.9B, $22.9B and $20.4B, respectively. The largest declines over 12 months were seen by: RBC (down $3.7B), Columbia (down $2.5B), PGIM (down $2.1B) and AllianceBernstein (down $21M). The largest declines over 3 months included: Goldman Sachs (down $29.1B), Morgan Stanley (down $18.0B), SSGA (down $8.3B) and JPMorgan (down $8.2B).
Our latest domestic U.S. Money Fund Family Rankings show that Fidelity Investments remains the largest money fund manager with $1.525 trillion, or 20.6% of all assets. Fidelity was up $4.7B in May, up $24.9 billion over 3 mos., and up $211.2B over 12 months. JPMorgan ranked second with $777.8 billion, or 10.5% market share (up $15.8B, down $8.2B and up $116.9B for the past 1-month, 3-mos. and 12-mos., respectively). Vanguard ranked in third place with $694.9 billion, or 9.4% of assets (up $14.5B, up $35.8B and up $95.9B). Schwab ranked fourth with $645.4 billion, or 8.7% market share (up $7.9B, up $20.4B and up $118.1B), while BlackRock was the fifth largest MMF manager with $634.5 billion, or 8.6% of assets (up $16.1B, up $22.9B and up $112.5B for the past 1-month, 3-mos. and 12-mos.).
Federated Hermes was in sixth place with $480.7 billion, or 6.5% (up $9.1B, down $4.9B and up $29.6B), while Goldman Sachs was in seventh place with $426.0 billion, or 5.8% of assets (down $6.4B, down $29.1B and up $34.5B). Dreyfus ($292.0B, or 3.9%) was in eighth place (up $269M, down $2.1B and up $19.9B), followed by Morgan Stanley ($281.7B, or 3.8%; down $949M, down $18.0B and up $35.9B). SSGA was in 10th place ($246.9B, or 3.3%; up $4.5B, down 8.3B and up $33.8B).
The 11th through 20th-largest U.S. money fund managers (in order) include: Allspring ($212.1B, or 2.9%), Northern ($179.9B, or 2.4%), American Funds ($178.5B, or 2.4%), First American ($175.7B, or 2.4%), Invesco ($168.4B, or 2.3%), UBS ($115.8B, or 1.6%), T. Rowe Price ($54.9B, or 0.7%), DWS ($43.8B, or 0.6%), HSBC ($43.8B, or 0.6%) and Western ($33.7B, or 0.5%). Crane Data currently tracks 61 U.S. MMF managers, unchanged from last month.
When European and "offshore" money fund assets -- those domiciled in places like Ireland, Luxembourg and the Cayman Islands -- are included, the top 10 managers are the same as the domestic list, except: BlackRock moves up to the No. 3 spot, Vanguard moves down to No. 4 and Schwab moves down to the No. 5 spot. Goldman Sachs moves up to the No. 6 spot, while Federated Hermes moves down to the No. 7 spot and Morgan Stanley moves up to the No. 8 spot, while Dreyfus moves down to the No. 9 spot. Global Money Fund Manager Rankings include the combined market share assets of our MFI XLS (domestic U.S.) and our MFI International ("offshore") products.
The largest Global money market fund families include: Fidelity ($1.546 trillion), JP Morgan ($1.055 trillion), BlackRock ($963.6B), Vanguard ($694.9B) and Schwab ($645.4B). Goldman Sachs ($581.7B) was in sixth, Federated Hermes ($493.0B) was seventh, followed by Morgan Stanley ($383.3B), Dreyfus/BNY ($317.3B) and SSGA ($299.1B), which round out the top 10. These totals include "offshore" U.S. Dollar money funds, as well as Euro and Pound Sterling (GBP) funds converted into U.S. dollar totals.
The June issue of our Money Fund Intelligence and MFI XLS, with data as of 5/31/25, shows that yields were lower in May across all the Crane Money Fund Indexes. The Crane Money Fund Average, which includes all taxable funds covered by Crane Data (currently 728), was 4.01% (down 1 bp) for the 7-Day Yield (annualized, net) Average, the 30-Day Yield was down 2 bps to 4.01%. The MFA's Gross 7-Day Yield was at 4.38% (down 1 bps), and the Gross 30-Day Yield was down 2 bps at 4.38%. (Gross yields will be revised once we download the SEC's Form N-MFP data for 5/31/25 on Monday.)
Our Crane 100 Money Fund Index shows an average 7-Day (Net) Yield of 4.11% (down 2 bps) and an average 30-Day Yield at 4.11% (down 2 bps). The Crane 100 shows a Gross 7-Day Yield of 4.38% (down 2 bps), and a Gross 30-Day Yield of 4.38% (down 2 bps). Our Prime Institutional MF Index (7-day) yielded 4.25% (down 2 bps) as of May 31. The Crane Govt Inst Index was at 4.11% (down 2 bps) and the Treasury Inst Index was at 4.07% (down 1 bp). Thus, the spread between Prime funds and Treasury funds is 18 basis points, and the spread between Prime funds and Govt funds is 14 basis points. The Crane Prime Retail Index yielded 3.98% (down 2 bps), while the Govt Retail Index was 3.82% (down 2 bps), the Treasury Retail Index was 3.83% (down 1 bp from the month prior). The Crane Tax Exempt MF Index yielded 2.12% (down 85 bps) at the end of May.
Gross 7-Day Yields for these indexes to end May were: Prime Inst 4.48% (down 1 bp), Govt Inst 4.37% (down 1 bp), Treasury Inst 4.35% (down 1 bp), Prime Retail 4.47% (down 2 bps), Govt Retail 4.37% (down 1 bp) and Treasury Retail 4.35% (down 1 bp). The Crane Tax Exempt Index fell to 2.52% (down 85 bps). The Crane 100 MF Index returned on average 0.35% over 1-month, 1.04% over 3-months, 1.64% YTD, 4.66% over the past 1-year, 4.34% over 3-years annualized), 2.60% over 5-years, and 1.79% over 10-years.
The total number of funds, including taxable and tax-exempt, was unchanged in May at 841. There are currently 728 taxable funds, unchanged from the previous month, and 113 tax-exempt money funds (unchanged from last month). (Contact us if you'd like to see our latest MFI XLS, Crane Indexes or Market Share report.)
The June issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Friday morning, features the articles: "Shift from Treasuries to Repo Continues; FICC Repo Hits $1T," which discusses recent portfolio composition shifts in the MMF space; "Fed, EU Focus on Treasuries, Money Markets, NBFIs," which looks at bank regulators renewed interest in MMFs and non-banks; and, "Fitch: Liquidity LGIPs Rise to Over $430B; S&P Q1 Update" which reviews recent news on local government investment pools. We also sent out our MFI XLS spreadsheet Friday a.m., and we've updated our Money Fund Wisdom database with 5/31/25 data. Our June Money Fund Portfolio Holdings are scheduled to ship on Tuesday, June 10, and our June Bond Fund Intelligence is scheduled to go out on Friday, June 13. (Note: Register ASAP for our upcoming Crane's Money Fund Symposium, which is in just over 2 weeks -- June 23-25 -- in Boston!)
MFI's "Shift from Treasuries" article says, "The U.S. Treasury's Office of Financial Research (OFR) published a blog piece titled, 'OFR's MMF Monitor Shows Reduced Federal Reserve ON RRP Use.' It states, 'In Q1 2025, U.S. money market funds (MMFs) experienced strong cash inflows from retail and institutional investors that pushed assets to $7.4 trillion by quarter-end, according to OFR's U.S. Money Market Fund Monitor data. Investors sought relative safety from broader market volatility and benefited from the yield advantage generally offered by MMFs over alternative investment products.'"
It continues, "They write, 'MMFs also lowered their exposure to U.S. Treasury securities and increased their repurchase agreement (repo) allocation to over $2.8 trillion.... The change primarily reflected high repo rates and a net decrease in U.S. Treasury issuance. The U.S. Department of the Treasury is conserving its borrowing authority until the federal debt limit is raised or suspended.'"
We write in our "Fed, EU Focus article, "After a period of silence, bank regulators appear to be focusing once more upon money market funds and other non-bank players in the financial markets. Federal Reserve Bank of Dallas President Lorie Logan recently hosted a panel on 'The Increasing Role of Nonbank Institutions in the Treasury and Money Markets' at the Federal Reserve Bank of Atlanta 2025 Financial Markets Conference. The panel featured Lou Crandall of Wrightson ICAP, Deirdre Dunn of Citigroup Global Markets and chair of the Treasury Borrowing Advisory Committee, and Nate Wuerffel of BNY."
It states, "Logan comments, 'Our topic this afternoon is a timely one: the role of nonbank financial institutions (NBFIs) in Treasury and money markets.... The Treasury market and money markets sit at the very core of the financial system. The Treasury market finances the U.S. government, provides a safe and liquid asset relied on by investors worldwide, and creates a benchmark for broader long-term interest rates. Money markets establish overnight risk-free interest rates that are building blocks for all other asset prices, they keep credit flowing through the economy by financing a wide range of assets, and they are where the Fed implements the stance of monetary policy. And these markets are tightly linked because one of the main money markets is the repo market, where Treasury securities are financed.'"
Our "LGIP" piece says, "Fitch Ratings published 'U.S. Local Government Investment Pools Monitor: 1Q25,' which states, 'Fitch Ratings' two local government investment pool (LGIP) indices reported an aggregate asset increase in the first quarter of 2025 (1Q25) driven by Liquidity LGIPs, consistent with seasonal flow trends. Total assets for the Fitch Liquidity LGIP Index and the Fitch Short-Term LGIP Index reached $655.5 billion at quarter end, marking increases of $9.3 billion qoq and $40.5 billion yoy.' (Fitch's tables shows the Liquidity LGIP total at just $430.7 billion and the Short-Term LGIP total at $224.8 billion.)"
The article continues, "It says, 'The Fitch Liquidity LGIP Index rose by 2.3% qoq while the Fitch Short-Term LGIP Index fell by 0.2% qoq. These changes contrast with an average increase of 6.2% and average decrease of 1.8%, respectively, during the first quarter over the past three years.'"
MFI also includes the News brief, "Assets Hit Record $7.4 Trillion." It states, "Our MFI Daily asset series hit a record $7.406 trillion on June 3 (then dipped 6/4). Our MFI XLS monthly series hit a record $7.408 trillion in May. ICI's smaller weekly series shows assets retaking $7.0 trillion in the latest week." (See today's Link of the Day.)
Another News brief, "SEC Webinar Cites Money Funds," says, "Former Director of the SEC's Division of Investment Management Joel Goldberg cited money funds' survival from regulatory extinction in the early 1970's as the most important development in fund regulations. Barry Barbash also reviewed money funds' troubles during the Great Financial Crisis, and the webinar discussed tokenized MMFs."
A third News brief titled, "Portfolio Holdings: FICC Repo Hits $1T, T-Bills Drop," tells us, "Our May Money Fund Portfolio Holdings, with data as of April 30, 2025, show that holdings of Repo jumped last month while Treasuries declined. Repo, now the largest segment, increased $31.4 billion in April. Treasuries, now the second largest portfolio composition segment, decreased by $168.3 billion. Agencies were the third largest segment, CP remained fourth, ahead of CDs, Other/Time Deposits and VRDNs."
A sidebar, "Stradley Reviews MMF Regs," says, "Stradley Ronon Partner Jamie Gershkow and Associate Geena Marzouca recently published, 'Are We Trying to Kill Institutional Prime Funds? -- Money Market Funds in a Post Reform Era.' It explains, 'At a meeting of the US Securities and Exchange Commission (SEC) adopting significant reforms to money market fund regulation, Commissioner Peirce posed a pointed question: Are we trying to kill institutional prime funds? [T]his article looks at whether Commissioner Peirce’s concern became reality and assesses the overall impact of the reforms on the money market fund industry. [It] reviews considerations related to the implementation of certain aspects of the reforms, including liquidity fees, share cancellation, increased liquidity requirements and stress testing, and board oversight of money funds under amended Rule 2a-7 of the Investment Company Act of 1940 (1940 Act).'"
Our June MFI XLS, with May 31 data, shows total assets jumped $90.3 billion to a record high $7.408 trillion, after decreasing $26.6 billion in April and $4.6 billion in March. Assets increased $90.4 billion in February, $47.9 billion in January and $113.0 billion in December. Assets jumped $196.1 billion in November, $89.9 billion in October, $155.2 billion in September, $105.6 billion in August, $19.7 billion in July and $11.8 billion last June.
Our broad Crane Money Fund Average 7-Day Yield was down 1 bp to 4.01%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was down 2 bps to 4.11% in May. On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 averaged 4.38% and 4.38%. Charged Expenses averaged 0.37% and 0.27% for the Crane MFA and the Crane 100. (We'll revise expenses once we upload the SEC's Form N-MFP data for 5/31/25 on Monday, 6/9.) The average WAM (weighted average maturity) for the Crane MFA was 37 days (up 3 days) and the Crane 100 WAM was up 5 days from the previous month at 39 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
Moody's Ratings just published, "Tokenized short-term funds could boost institutional adoption of digital assets," which tells us, "Tokenized money market funds (MMFs) and similar short-term, cash-like bond funds (collectively, tokenized short-term liquidity funds), are emerging as a critical component of the financial system that can serve as a bridge between traditional finance (TradFi) and decentralized finance (DeFi). These tokenized funds, a foundational asset management product, allow traditional institutional investors to move funds into digital financial products and allow digital finance investors to efficiently move money into traditional channels."
They explain, "In tokenized money market funds, fund shares are converted into digital tokens using blockchain technology. This gives traditional investors direct, non-intermediated access to digital finance markets through products backed by familiar and safe assets. Digital finance investors, meanwhile, can use tokenized money market funds to optimize their liquidity in a format that is easy to use and, unlike most stablecoins, allows them to earn a yield."
Moody's writes, "Demand from both digital finance and traditional markets could accelerate institutional adoption of digital assets and help asset managers increase their fee revenue and market share. However, although these short-term liquidity funds are low-risk assets that serve as a base liquidity management tool for brokerages and asset managers, they are not riskless. In addition to risks borne by all MMFs and similar short-term funds, such as credit, interest rate and liquidity risk, tokenized short-term liquidity funds have additional risks that stem from the novel technology."
The paper states, "Tokenized money market funds and similar short-term, cash-like bond funds (collectively, tokenized short-term liquidity funds) are a relatively new and fast growing product that can serve as a foundational liquidity management tool bridging both traditional finance and digital finance. These funds in essence operate like a traditional highly safe and liquid money market fund whose share registry uses a blockchain ledger to enable more transparency, flexibility and functionality. Often designed as US Treasury-backed money market funds, these vehicles are widely considered safe liquidity management assets that can serve as collateral. They also provide yield and can be a more efficient liquidity management vehicle than non-yield-bearing alternatives such as many stablecoins. The first tokenized short-term fund was launched in 2021 and these funds now total $5.7 billion in assets."
It tells us, "Unlike tokenized bank deposits, which remain liabilities of individual banks, tokenized short-term liquidity funds can offer the safety of holding a dollar's worth of US Treasury assets for each dollar of Net Asset Value (NAV). For digital investors, tokenized money market funds can also be used as yield-bearing collateral, unlike stablecoins, which mostly do not offer interest. A helpful analogy would be to think of stablecoins as digital cash, or a checking account, and tokenized money market funds as a savings account. In this sense, they can also be complementary as many tokenized money market funds use stablecoins to facilitate the instant redemption of funds."
Moody's adds, "Asset managers may see value in tokenized short-term liquidity funds as a gateway vehicle to offer clients who wish to effect transactions between digital assets and traditional finance. For many investors, moving funds from fiat currency to cryptocurrency is cumbersome. This is particularly true for investors whose holdings are subject to regulatory requirements, such as banks and insurance companies. For these investors, tokenized short-term liquidity funds, including tokenized money market funds, could provide a solution."
They state, "Tokenized short-term liquidity funds' use of blockchain technology can also offer potential operational efficiencies, cost savings and new functionalities not possible through traditional money market funds. For example, settlement on the blockchain can be much faster and simpler than would be the case for a traditional money market fund. Features such as know-your-customer (KYC) and anti-money-laundering screening could potentially be built into the management of the blockchain registry, offering compliance and regulatory benefits. On-chain record-keeping of shares and potentially other information could provide more transparency for shareholders and investors and improve risk management and operations. Potential use of smart contract features could also automate settlement processes and share transfer processes in a way that is not possible in traditional fund operations."
Finally, they write, "Although tokenization does not change the core credit risks of a money market fund or short-term bond fund -- risks such as price and liquidity risk in a sudden, severe market downturn, for example, are common to all such funds, whether or not they have a 'wrapper' of blockchain technology -- tokenization can introduce novel risks, and in particular operational risks arising from blockchain use. Such risks include, but are not limited to, network availability, scalability limitations and security vulnerabilities. An assessment of credit and sponsor quality serve as a foundation for analysis."
In other news, the latest "FDIC Quarterly Banking Profile Q1'25" says, "The Federal Deposit Insurance Corporation released its latest "FDIC Quarterly Banking Profile," which says "Domestic deposits rose for the third straight quarter and were up $180.9 billion (1 percent) from fourth quarter 2024. Savings deposits increased from the prior quarter, but declines in small time deposits partially offset the increase. Brokered deposits decreased for the fifth consecutive quarter and were down $14.9 billion (1.2 percent) from the prior quarter. Estimated insured deposits increased this quarter (up $110.5 billion, or 1 percent)."
It explains, "Community banks reported an increase in domestic deposits of 1.6 percent ($36.7 billion) during first quarter 2025. More than two-thirds of community banks (69.4 percent) reported an increase in deposit balances from the previous quarter. Community banks reported growth in estimated insured deposits (up $30.0 billion, or 1.9 percent) and in estimated uninsured domestic deposits (up $7.2 billion, or 1.0 percent). Quarterly growth in interest-bearing deposits (up $34.1 billion, or 1.9 percent) continued to surpass growth in noninterest-bearing deposits (up $2.7 billion, or 0.5 percent). Domestic deposits increased 5.2 percent ($116.8 billion) from one year earlier."
A separate press release, entitled, "FDIC-Insured Institutions Reported Return on Assets of 1.16 Percent and Net Income of $70.6 Billion in the First Quarter," comments, "Quarterly net income for the 4,022 community banks insured by the FDIC totaled $6.8 billion in the first quarter, an increase of $621.0 million (10 percent) from fourth quarter 2024. The community bank pretax ROA increased 11 basis points from last quarter to 1.18 percent. Higher net interest income (up $315.7 million, or 1.4 percent) and lower losses on the sale of securities (up $313.7 million, 54.8 percent) along with lower provision expenses (down $249.7 million, or 19 percent) and noninterest expenses (down $423.2 million, or 2.3 percent) more than offset lower noninterest income (down $476.6 million, or 9.1 percent)."
Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Wednesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of May 30) includes Holdings information from 47 money funds (down 22 from a week ago), or $2.913 trillion (down from $3.904 trillion) of the $7.400 trillion in total money fund assets (or 39.4%) 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 May 12 News, "May Money Fund Portfolio Holdings: FICC Repo Hits $1T, T-Bills Drop.")
Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.316 trillion (down from $1.728 trillion a week ago), or 45.2%; Repurchase Agreements (Repo) totaling $1.076 trillion (down from $1.411 trillion a week ago), or 36.9%, and Govern-ment Agency securities totaling $275.3 billion (down from $334.9 billion), or 9.4%. Commercial Paper (CP) totaled $116.1 billion (down from a week ago at $182.7 billion), or 4.0%. Certificates of Deposit (CDs) totaled $51.5 billion (down from $95.9 billion a week ago), or 1.8%. The Other category accounted for $44.6 billion or 1.5%, while VRDNs accounted for $33.8 billion, or 1.2%.
The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.316 trillion (45.2% of total holdings), Fixed Income Clearing Corp with $321.1B (11.0%), the Federal Home Loan Bank with $178.7 billion (6.1%), JP Morgan with $100.4B (3.4%), RBC with $75.0B (2.6%), BNP Paribas with $70.2B (2.4%), Citi with $66.6B (2.3%), Federal Farm Credit Bank with $65.5B (2.2%), the Federal Reserve Bank of New York with $60.9B (2.1%) and Bank of America with $41.2B (1.4%).
The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($281.7B), JPMorgan 100% US Treas MMkt ($255.1B), Goldman Sachs FS Govt ($249.1B), Fidelity Inv MM: Govt Port ($232.4B), Morgan Stanley Inst Liq Govt ($166.4B), State Street Inst US Govt ($156.0B), Fidelity Inv MM: MM Port ($152.6B), Dreyfus Govt Cash Mgmt ($123.9B), Allspring Govt MM ($117.2B) and First American Govt Oblg ($108.6B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
In other news, the BIS, or Bank for International Settlements, published a paper titled, "Stablecoins and safe asset prices." The Abstract says, "This paper examines the impact of dollar-backed stablecoin flows on short term US Treasury yields using daily data from 2021 to 2025. Estimates from instrumented local projection regressions suggest that a 2-standard deviation inflow into stablecoins lowers 3-month Treasury yields by 2-2.5 basis points within 10 days, with limited to no spillover effects on longer tenors. We also find evidence of asymmetric effects: stablecoin outflows raise yields by two to three times as much as inflows lower them. Decomposing the yield impact by issuer shows that USDT (Tether) has the largest contribution followed by USDC (Circle), consistent with their relative size. Our results highlight stablecoins' growing footprint in safe asset markets, with implications for monetary policy transmission, stablecoin reserve transparency, and financial stability."
The BIS writes, "Dollar-backed stablecoins have seen remarkable growth and are poised to reshape financial markets. As of March 2025, the combined assets under management of these cryptocurrencies promising par convertibility to the US dollar and backed by dollar-denominated assets exceeded $200 billion, surpassing the short-term US securities holdings of major foreign investors like China.... Stablecoin issuers, notably Tether (USDT) and Circle (USDC), back their tokens primarily with US Treasury bills (T-bills) and money market instruments, positioning them as significant players in short term debt markets. Indeed, dollar-backed stablecoins purchased nearly $40B of US T-bills in 2024, similar to the largest US government money market funds and larger than most foreign purchases.... While prior research focuses on stablecoins' role in cryptocurrency volatility (Griffin and Shams, 2020), their impact on commercial paper markets (Barthelemy et al., 2023) or their systemic risks (Bullmann et al., 2019), their interaction with traditional safe asset markets remains underexplored."
They explain, "This paper investigates whether stablecoin flows exert measurable demand pressures on US Treasury yields. We document two key findings. First, stablecoin flows compress short-term T-bill yields, with effects comparable to that of small-scale quantitative easing on long-term yields. In our most stringent specification, which aims to overcome endogeneity concerns by using a series of crypto shocks that affect stablecoin flows but not Treasury yields directly, we find that 5-day stablecoin inflows of $3.5B, or 2 standard deviations, lower 3-month T-bill yields by about 2-2.5 basis points (bps) within 10 days. Second, we decompose yield impacts into issuer-specific contributions to find that USDT has the largest contribution to T-bill yield compression, followed by USDC. We discuss the policy implications of our findings for monetary policy transmission, stablecoin reserve transparency, and financial stability."
The piece continues, "Our empirical analysis is based on daily data from January 2021 to March 2025. To construct a measure of stablecoin flows, we collect market capitalization data for the six largest dollar-backed stablecoins and aggregate them into a single number. We then use 5-day changes in aggregate stablecoin market capitalization as our proxy for inflows into stablecoins. We collect data on the US Treasury yield curve, as well as data on cryptocurrency prices (Bitcoin and Ether). We choose the 3-month Treasury bill yield as our outcome variable of interest as the largest stablecoins have either disclosed or publicly stated this tenor as their preferred habitat."
It concludes, "Stablecoins have already established themselves as significant players in Treasury markets, with measurable and significant effects on short-term yields. Their growth blurs the lines between cryptocurrency and traditional finance, demanding regulatory attention to reserve practices, potential implication for monetary policy transmission and financial stability risks. Future research could explore cross-border spillovers and interactions with money market funds, particularly during liquidity crises."
Another piece, "Stablecoins And The Banking System: Opportunity Or Threat?" tells us, "[C]rypto currencies may dominate the financial news today, but it is stablecoins that are subtly on track to transform banking. Stablecoins are simply the digital version of the cash in your wallet. Like cash, they don't earn interest, and they are pegged one-to-one to a currency, like a dollar. They have major advantages -- efficiency, accessibility, transparency, and security -- and can be exchanged back into your currency."
It states, "[M]ost people would be surprised to learn how indispensable stablecoins have become: The total value of stablecoins linked to the dollar has grown to $221 billion, with the average supply of stablecoins overall growing 28% per year. Tether, the world's largest stablecoin issuer, reported a net profit of $13 billion last year with just 80 employees. On their own, stablecoins would already be a top 20 U.S. bank." See also Bloomberg's "Stablecoin Regulation Could Shakeup US Financial System."
Money fund yields (7-day, annualized, simple, net) increased by two basis points to 4.12% on average during the week ended Friday, May 30 (as measured by our Crane 100 Money Fund Index), after declining by one basis point the previous week. Fund yields should stay relatively flat until the Fed moves rates again later this year. They've declined by 94 bps since the Fed first cut its Fed funds target rate by 50 bps on Sept. 18, 2024, and they've declined by 51 bps since the Fed last cut rates by 1/4 point on 11/7/24. Yields were 4.13% on 4/30/25, 4.14% on 3/31/25, 4.16% on 2/28/25, 4.19% on 1/31/25, 4.28% on average on 12/31/24, 4.45% on 11/30/24, 4.65% on 10/31, 4.75% on 9/30, 5.10% on 8/31, 5.13% on 7/31 and 6/28, 5.14% on 3/31 and 5.20% on 12/31/23. (Note: Register ASAP for our upcoming Crane's Money Fund Symposium, which is in just 3 weeks -- June 23-25 -- in Boston!)
The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 682), shows a 7-day yield of 4.02%, up 1 bp in the week through Friday. Prime Inst money fund yields were up 1 bp at 4.25% in the latest week. Government Inst MFs were up 1 bp at 4.12%. Treasury Inst MFs were up 1 bp at 4.07%. Treasury Retail MFs currently yield 3.83%, Government Retail MFs yield 3.82%, and Prime Retail MFs yield 4.01%, Tax-exempt MF 7-day yields were down 38 bps to 2.13%.
Assets of money market funds rose by $85.7 billion last week to a record $7.400 trillion, according to Crane Data's Money Fund Intelligence Daily. This is the first record for MMF assets since the previous high of $7.383 trillion set on April 3. For the month of May (MTD), MMF assets have increased by $100.9 billion, after decreasing $24.4 billion in April, increasing by $2.8 billion in March, $94.2 billion in February, $52.8 billion in January, $110.9 billion in December, $200.5 billion in November, $97.5 billion in October and $149.8 billion in September. Weighted average maturities were at 37 days for the Crane MFA and 39 days the Crane 100 Money Fund Index.
According to Monday's Money Fund Intelligence Daily, with data as of Friday (5/30), 115 money funds (out of 794 total) yield under 3.0% with $147.6 billion in assets, or 2.0%; 249 funds yield between 3.00% and 3.99% ($1.306 trillion, or 17.7%), 430 funds yield between 4.0% and 4.99% ($5.946 trillion, or 80.4%) and following the recent rate cut there continue to be zero funds yielding 5.0% or more.
Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.40%, after falling 1 bp two weeks prior. The latest Brokerage Sweep Intelligence, with data as of May 30, shows no changes over the past week. Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
In other news, Federated Hermes' MM CIO Deborah Cunningham writes, "The answer is, 'No'." She explains, "The question: Has Moody's downgrade of the US credit rating impacted money market funds? This is one of those instances when it is best to be direct. As soon as the news hit about Moody's recent downgrade of the US credit rating, we knew cash managers would be fielding questions about its impact on US money market funds. There are no ramifications: The rating agency has affirmed its Aaa-mf assessment of money funds is unaffected by the 'demotion.'"
The piece explains, "It's been some time since the other two major agencies lowered their US ratings -- the S&P in 2011 and Fitch in 2023 -- but it was almost instantly old news in our minds. The downgrades reflect the agencies' views on the federal government's inability to reduce its mammoth debt. By its nature, that is a long-term problem, meaning applicable to US Treasury bonds and notes. Bills, which have shorter maturities, are not subject to the same concern. And, among the three, most money market funds predominately or exclusively own bills."
It comments, "So, why doesn't a US downgrade impact a money fund rating? Well, it's all about time and methodology. Like the others, Moody's framework takes a holistic view of a fund, incorporating not only a credit assessment but also maturity and liquidity metrics, among other aspects. Although the downgrade may affect the credit-quality measure, the short-term nature of money fund holdings due to the maturity restrictions of Rule 2a-7 likely kept this impact modest. At the same time, the very high liquidity positions of these products remain robust, augmenting the overall stability profile of portfolios."
Cunningham says, "Critically, money fund risk management measures go several steps beyond simply choosing Treasury bills over notes and bonds. Generally speaking, the weighted average maturity of a fund's entire portfolio must be 60 days or less, it must hold a large amount of securities redeemable daily or weekly, and any asset it holds other than T-bills (such as Fannie Mae securities or commercial paper) must also be highly rated. In other words, Moody's and the like have not changed their opinion about the soundness of these financial products that operate in the short range of high-quality securities and that seek stability and preservation of capital. We think investors reach the same conclusion."
Finally, she adds, "President Trump has tested the bulwark protecting the Federal Reserve from political interference and found it as sturdy as ever. His insults of Chair Powell are one thing, but claiming he had the authority to fire him is another. That stance threatened the Fed's independent stature and was serious enough to earn a slapdown by the bond market. No one bullies like bondholders.... Thankfully, the Supreme Court stepped in. While it affirmed that the White House could dismiss the directors in question, it proactively shut the door on any similar attempt with the central bank: 'The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.'"
Dreyfus posted a brief titled, "Moody's Downgrade of US Long-Term Ratings," which states, "On May 16, Moody's Corporation downgraded the United States of America's long-term issuer and senior unsecured ratings to Aa1 from Aaa. Moody's released a statement on the downgrade, noting 'This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.'" (Note: Register ASAP for our upcoming Crane's Money Fund Symposium, which is in just 3 weeks -- June 23-25 -- in Boston!)
The Dreyfus piece continues, "With the downgrade, Moody's adjusted its outlook to 'stable.' 'The US economy is unique among the sovereigns we rate. It combines very large scale, high average incomes, strong growth potential and a track-record of innovation that supports productivity and GDP growth. While GDP growth is likely to slow in the short term as the economy adjusts to higher tariffs, we do not expect that the US' long-term growth will be significantly affected.'"
It says, "Moody's cut the US long-term issuer senior unsecured rating one level from Aaa to Aa1. There was no change to the short-term rating. All three rating agencies maintain the highest short-term rating at P-1 (Moody's), A-1+ (S&P) and F1+ (Fitch); This downgrade was roughly 18 months in the making, as Moody's lowered the US outlook from 'stable' to 'negative' in November 2023; Moody's was the last of the three major credit rating agencies to downgrade the US from its highest level. Fitch and S&P downgraded the US in 2023 and 2011, respectively."
Dreyfus comments, "Currently, all of the agencies' ratings are aligned at Aa1/AA+/AA+ with 'stable' outlooks; It is expected that certain issuers' ratings will follow the downgrade shortly, including direct rating impacts on US government-sponsored enterprises and agencies (who have direct credit linkages), and indirect impact on some US banks and insurers, infrastructure issuers, and state and local governments."
They add, "We do not expect any impact on Dreyfus Aaa/AAA money market fund (MMF) ratings as a result of the downgrade. We expect limited market reaction similar to the anticipated Fitch downgrade in 2023 as opposed to the S&P surprise action in 2011. We do not expect to see any MMF outflows on the back of the downgrade. We do not believe this will have any impact on MMF investments as it relates to changing haircuts in their respective collateral schedules. We believe Dreyfus is well positioned to meet our clients' investment needs with the depth and breadth of experience we bring to this asset class."
For more, see these Crane Data News stories: "Wells Fargo on Govt Debt Downgrade" (5/23/25); "Federated writes 'S&P Downgrade Immaterial to Money Market Funds" (8/9/11); "Standard Poor's Says AAAm Money Funds Unaffected by US Downgrade" (8/9/11); and, "ICI on S&P Downgrade, Reviews Flows During Debt Ceiling Debate" (8/8/11).
In other news, J.P. Morgan writes in a "JPM Mid-Week US Short Duration Update" that, "April showers low-duration bond funds with inflows." They state, "Low-duration bond funds posted another solid month of inflows in April, pulling in $13bn and bringing total AUMs across the funds we track to $868bn. This marks the fourth straight month of net inflows, with year-to-date totals reaching $43bn, a roughly 5% increase since the start of the year."
The update tells us, "Most strategies across the low-duration space saw inflows during the month, but short-term government funds stood out. These funds took in $3.6bn in April alone, accounting for 58% of their YTD inflows. So far in 2025, short-term government funds have garnered $6.2bn, already surpassing full year inflows in comparison to any of the past six years outside of 2020."
JPM continues, "Performance likely contributed to the increased flows into low-duration funds in April. In fact, during the month, the 2-year Treasury yield fell by 29bp, ending at 3.62%, which pushed the 1m/2y curve to -62bp, compared to -33bp on March 31, as markets aggressively repriced in anticipation of additional policy rate cuts throughout the year.... Notably, short-term government strategies with effective durations of 1.5-3.5 years generally outperformed comparable strategies, including other short-term funds, ultra-short funds, and MMFs. This outperformance is particularly evident over the 1 month and 3-month periods."
They state, "On the positioning side, the trend toward Treasury securities has also moved higher so far this year. Based on our estimates, low-duration funds have increased their Treasury holdings by $11bn YTD, bringing total exposure to $214bn as of April month-end.... Allocations to ABS also rose by $10bn over the same period. Additionally, low duration funds continued to maintain around $35bn in CP/CD holdings, with a modest $1bn increase year to date."
Finally, the article adds, "While the macro backdrop remains uncertain, with concerns ranging from fiscal dynamics to policy expectations and trade tensions, we expect low-duration funds to continue attracting steady inflows through the year. Should inflows across these funds persist, especially if short-term and ultra-short government funds maintain their momentum, this could also add incremental demand for front-end Treasuries on the margin."
