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As we wrote about earlier this week, Crane Data recently hosted its 8th annual European Money Fund Symposium in Paris, France, which featured two days of discussions on offshore money funds denominated in USD, EUR and GBP. Today, we quote from the Senior Portfolio Manager Perspectives panel, which featured Federated Hermes' Deborah Cunningham, BlackRock's Geeta Sharma and HSBC Asset Management's Florent Vassord. Asked about supply, Cunningham tells us, "You've seen [the CP] sector growing by double digits, especially since March when the Fed began raising rates. CDs are another popular investment choice, and then ultimately across both sectors, any kind of floating rate paper that you can buy. Whether it's bill floaters, agency floaters, any type of CP floaters, bank floaters, MTNs that are floating rate and issuance, those in a rising rate environment are extremely beneficial." (Note: Thanks again to those who attended and supported European MFS! Mark your calendars for next year's event in Edinburgh, Scotland, Sept. 25-26, 2023.)

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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 Sept. 30) includes Holdings information from 33 money funds (down 22 from a week ago), which represent $925.8 billion (down from $1.498 trillion) of the $5.036 trillion (18.4%) in total money fund assets tracked by Crane Data. Though some have expressed concerns about Credit Suisse-related credits, money funds continue to hold the name as of Sept. 30, though the total has been reduced to just $1.2 billion. (Our Weekly MFPH are e-mail only and aren't available on the website.)

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Today, we excerpt from the second half of the "ICI Global & EFAMA Talk Regulatory Issues" session from last week's European Money Fund Symposium in Paris, France. (See Monday's News, "ICI Global's Pedroni at European MFS: No EU Reforms in Near-Term; US?") EFAMA's Deputy Director for Regulatory Policy Federico Cupelli comments, "In terms of who we represent in the money market fund space, it's important to know that our members are very much managing all types of MMFs. We have certainly two camps, the LVNAV and the VNAV, well-represented within our money market fund task force. I am very happy to say that really on all of these proposals that we will be discussing here today, there is a very good consensus on the way forward. In the past, this has not always been the case, as some in the room remember. However, I think that this time around we are far more aligned, at least on these broad policy topics that have been kicked up since March 2020."

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Last week, Crane Data hosted its 8th annual European Money Fund Symposium in Paris, France. The record 160+ attendees discussed rising yields in USD, EUR and GBP MMFs, the potential for more regulatory reforms in Europe and in the U.S., and turmoil in the sterling money markets, among other things. Day 2 of the event began with a session entitled, "ICI Global & EFAMA Talk Regulatory Issues," which featured updates from ICI Global's Michael Pedroni and EFAMA's Federico Cupelli. We excerpt from Pedroni's segment below. (Note: Thanks again to our European MFS speakers, sponsors and attendees! Watch for more quotes in coming days and in our upcoming October Money Fund Intelligence newsletter.)

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The Investment Company Institute released its latest weekly "Money Market Fund Assets" report, as well as its monthly "Trends in Mutual Fund Investing" and "Month-End Portfolio Holdings of Taxable Money Funds" for August 2022 Thursday. Their weekly update shows money fund assets rose again in the latest week after a big jump last week (but declines in 6 of the past 8 weeks before that). (Note: Thanks once more to the speakers, sponsors and attendees at our European Money Fund Symposium in Paris earlier this week! Watch for excerpts and quotes from the event in our October Money Fund Intelligence newsletter in coming days, and let us know if you'd like to see the conference binder.)

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Moody's Investors Service just published a report entitled "French MMFs' H1 asset contraction exceeds that of European peers," which explains, "French money market funds (MMF) lost about 12% of their assets under management (AUM) in the first half of 2022, more than their European peers. This reflects investor withdrawals in response to rising inflation and to satisfy margin calls triggered by Ukraine-related energy market turbulence. The average asset quality of French MMFs has improved as geopolitical tensions have encouraged investment in low-risk assets. However, French players still hold a higher proportion of lower-rated securities than rated European peers, mostly domiciled in Ireland and Luxembourg. The French MMF market remains highly heterogeneous, consisting of a handful of dominant players and a large number of smaller entities with varying risk appetite." (Note: Thanks again to those who attended our European Money Fund Symposium in Paris! Watch for excerpts and quotes from the event in our October Money Fund Intelligence newsletter.)

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A paper written earlier this year entitled, "A Lending Network under Stress: A Structural Analysis of the Money Market Funds Industry," studies funding supply shocks in the money markets. Author `Paula Beltran from UCLA explains, "In this paper, I study the transmission of an aggregate funding supply shock in a lending network and quantitatively assess the implications for the allocative efficiency of funding provision of the US Money Markets Funds Industry. I build a tractable model that features banks and funds that bargain over the terms of trade subject to an incomplete network of existing counterparties and bilateral bargaining. I discipline the model using data on the funds' portfolio." (Note: Thanks to those who attended our European Money Fund Symposium, in Paris! We hope you enjoy Day 2, and safe travels home. Thanks to our speakers and sponsors! Watch for excerpts and quotes from the event in our daily news next week and in our October Money Fund Intelligence newsletter.)

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State Street Global Advisors published a new "Monthly Cash Review" update entitled, "Ask April," which explains, "Portfolio Strategist William Goldthwait sits down with April Borawski, Portfolio Manager, to discuss the latest trends in money markets." (Note: For those attending our European Money Fund Symposium, welcome to Paris! We look forward to 2 days of presentations and discussions on "offshore", European and global money market funds, and watch for excerpts and quotes from the event in our daily news next week and in our October Money Fund Intelligence newsletter.)

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The Investment Company Institute published, "Worldwide Regulated Open-Fund Assets and Flows, Second Quarter 2022," which shows that money fund assets globally fell by $153.5 billion, or -1.8%, in Q2'22 to $8.482 trillion. The decreases were led by drops in money funds in the U.S., Ireland and Luxembourg. Meanwhile, money funds in China and Australia increased. MMF assets worldwide decreased by $83.0 billion, or -1.0%, in the 12 months through 6/30/22, and money funds in the U.S. represent 53.5% of worldwide assets. We review the latest Worldwide MMF totals, below. (Note: We hope to see you this week at our European Money Fund Symposium, which will take place Sept. 27-28 in Paris, France!)

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Money fund assets jumped in the latest week after declining in 6 of the past 8 weeks; it was their biggest gain since late April. The Investment Company Institute's latest weekly "Money Market Fund Assets" report shows assets down by $121 billion, or -2.6%, year-to-date, with Institutional MMFs down $172 billion, or -5.3% and Retail MMFs up $50 billion, or 3.4%. Over the past 52 weeks, money fund assets are up by $69 billion, or 1.5%, with Retail MMFs rising by $88 billion (6.2%) and Inst MMFs falling by $19 billion (-0.6%). (For the month of Sept. through 9/22, MMF assets increased by $25.4 billion to $5.053 trillion according to Crane's MFI XLS, which tracks a broader universe of funds than ICI. Crane Data's Prime asset total is currently $963.6 billion.)

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The Federal Reserve raised short-term interest rates for the 5th time this year and hiked by 75 basis points for the third time in a row. The Federal funds target rate is now in a range from 3.0% to 3.25%, its highest level since 2008. Money fund yields should surge in coming days and should break 2.5% on average and approach 3.0% in coming weeks. The Fed's FOMC statement says, "Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures."

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Late last week, SIFMA, the Securities Industry and Financial Markets Association (formerly the more easily recognizable Bond Market Association), posted a letter to the SEC on money fund reforms authored by its Asset Management Group and the Investment Company Institute. Entitled, "Securities Industry and Financial Markets Association Comments on Money Market Fund Reforms," the letter states, "The Asset Management Group of the Securities Industry and Financial Markets Association ('SIFMA AMG') and the Investment Company Institute ('ICI') welcome the opportunity to provide additional information to the U.S. Securities and Exchange Commission with respect to the Commission's proposed amendments to Rule 2a-7 that govern money market funds under the Investment Company Act of 1940, and related proposed amendments to Form N-MFP, Form N-CR and Form N-1A." (See the "Comments on Money Market Fund Reforms" posted to the SEC's website here, and see our Sept. 6 News, "Funds Doing Last-Minute Lobbying to SEC Says Ignites; Germain on RDM.")

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