​

Reuters writes "​U.​S. cash funds primed to recover waived fees". The article says, "Several companies in the money market fund industry, which has waived several billion dollars of fees over the past two years, are primed to recapture lost revenue from investors at a future date. In a recent disclosure, for example, discount brokerage Charles Schwab Corp said it could potentially recover $​878.​2 million in previously waived fees from investors in a number of its money market funds. The fee recapture, as disclosed in an updated filing with the Securities and Exchange Commission, could take place over a three-​year period that ends in 2014. Peter Crane, president of Crane Data LLC, a company that tracks the money market industry, said he has noticed that several funds have mentioned the ability to recapture waived fees in recent prospectus updates and supplements. He also said these funds have warned investors of this "recoupment risk." In a near-​zero interest rate environment, the funds are not in position to recapture previously waived fees just yet. But as one industry executive put it, funds are drawing a line in the sand to let investors know that fee recapture is coming." Reuters explained, "Crane said fee recapture won'​t be an issue until the U.​S. Federal Reserve raises its Fed Funds rate to 0.​50 percent, which could be anywhere from mid-​2013 to early in 2014, or even beyond. Even then, he said a Fed Funds rate of 25 basis points to 50 basis points would only unwind fee waivers. He said money funds are waiving about half of their fees currently, charging 0.​18 percent of average assets, compared with 0.​36 percent a couple of years ago. Money market funds waived an estimated $​4.​5 billion in expenses in 2010, or more than three times the amount waived in 2006, according to Investment Company Institute, a mutual fund industry trade group." See also, Crane Data'​s Nov. 15 News "​MMFs Prepare to Recapture Fee Waivers; Warn of Recoupment Risk".

​

Crane Data'​s Peter Crane appeared on Bloomberg TV late yesterday afternoon. He discusses the safety of money funds, potential regulatory changes, European concerns and the history of "​breaking the buck." Bloomberg writes, "Peter Crane, president of Crane Data LLC, talks about the risks involved in investing in money market funds. Crane also discusses regulation of the funds. He speaks with Lisa Murphy and Adam Johnson on Bloomberg Television'​s "​Street Smart." Click here to link to the video.

Press Release Archive