Money Market News
The Securities and Exchange Commission's latest monthly "Money Market Fund Statistics" summary shows that total money fund assets increased by $52.1 billion in February to an all-time high of $5.340 trillion. Assets at February month-end were above their previous $5.29 trillion January 2023 record. The SEC shows that Prime MMFs increased by $35.4 billion in February to $1.173 trillion, Govt & Treasury funds increased $16.1 billion to $4.048 trillion and Tax Exempt funds increased $0.6 billion to $119.8 billion. Taxable yields jumped again in February after surging in 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. (Month-to-date in March through 3/21, total MMF assets have skyrocketed by $242.0 billion to a record $5.494 trillion, according to our MFI Daily.) (Note: For `those attending this week's Bond Fund Symposium, welcome to Boston! Attendees and subscribers may access the materials in our "Bond Fund Symposium 2023 Download Center.")
After dipping slightly on Friday, money fund assets resumed their asset surge on Monday, rising $27.0 billion to a record $5.447 trillion. According to our MFI Daily, total MMF assets have increased by $118.6 billion over the past week and by $194.3 billion month-to-date in March (through 3/20/23). The near-record inflows continue to attract lots of media attention, the latest entrant being MarketWatch's "Money-market funds swell to record $5.4 trillion as assets pour in at fastest pace since pandemic after SVB collapse." Their article tells us, "Assets held by money-market mutual funds swelled to a record high $5.4 trillion last week as inflows hit the fastest pace since the start of the COVID-19 pandemic following the collapse of Silicon Valley Bank. This latest milestone marks the culmination of what has been a banner year for money funds. What started as a trickle of inflows last March after the Federal Reserve delivered its first interest-rate hike since 2018 has surged into a flood, with more than $460 billion flowing into money funds since mid-March 2022 as the Fed has hiked its policy rate by nearly 5 percentage points, according to Crane." (Reminder: Last chance to register for our `Bond Fund Symposium, which is March 23-24 in Boston! Attendees and subscribers may access the materials in our "Bond Fund Symposium 2023 Download Center.")
Money fund yields were slightly higher last week after jumping last month following the Fed's 25 basis point hike on Feb. 1. Our Crane 100 Money Fund Index (7-Day Yield) was up 2 bps at 4.42% in the week ended Friday, 3/17. Yields were unchanged the previous week and they're up from 4.15% on Jan. 31, 2023. Money fund yields have risen from 4.05% on 12/31/22, from 3.59% on Nov. 30, from 2.88% on Oct. 31 and from 2.66% on Sept. 30. Yields should be flat in coming days, and it's now unclear whether the Fed will hike rates again at its next meeting on March 22. The top-yielding money market funds remain flat at just over 4.70%. (Note: We look forward to seeing those of you attending our Bond Fund Symposium later this week (3/23-24) in Boston! Attendees and subscribers may access the conference binder, Powerpoints and recordings (afterwards) via our "Bond Fund Symposium 2023 Download Center.")
We continue to see a flurry of articles on money market funds and the flight from uninsured bank deposits. The Financial Times published, "Cash pours into US money market funds as investors flee bank turmoil," which states, "Investors have funneled cash to US money market funds over the past week amid concerns over the safety of some bank deposits after the collapse of two large lenders. The funds had more than $120bn of net inflows in the week to Wednesday, according data from the Investment Company Institute, the largest net weekly inflow since June 2020. The bulk of them poured into money market funds backed by government securities, according to the ICI. The cash moved into money market funds -- a type of mutual fund that invests in cash and safe securities -- during a week unsettled by the collapse of Silicon Valley Bank and Signature Bank. On Sunday federal regulators stepped in to protect all depositors from losses at the two lenders." (Note: Crane Data showed money fund assets continuing their big asset gains on Thursday, rising another $37.3 billion to a record $5.425 trillion. Month-to-date, they've jumped by $172.5 billion. Reminder: We're still taking registrations for next week's Bond Fund Symposium, March 23-24, in Boston.)
ICI's most recent "Money Market Fund Assets" report shows money fund totals jumping $121 billion in the latest week, breaking over the $5.0 trillion barrier for the first time ever. It was the 5th largest weekly increase ever and the largest in history if you exclude 4 coronavirus lockdown panic weeks in March and April 2020. The failure of Silicon Valley Bank has raised concerns over uninsured bank deposits, and large investors are fleeing into money funds. Over the past 52 weeks, money fund assets have risen $456 billion, or 10.0%, with Retail MMFs rising by $408 billion (28.3%) and Inst MMFs rising by $48 billion (1.5%). ICI shows assets up by $280 billion, or 5.9%, year-to-date in 2023, with Institutional MMFs up $111 billion, or 3.6% and Retail MMFs up $169 billion, or 10.1%. (Reminder: We're still taking registrations for Crane's Bond Fund Symposium, which is next week, March 23-24, in Boston. We hope to see you there!)
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. Among the 4 tables it includes on money market mutual funds, the Fourth Quarter 2022 edition shows that Total MMF Assets increased by $139 billion to $5.223 trillion in Q4'22. The Household Sector, by far the largest investor segment with $2.794 trillion, saw the biggest asset increase in Q4, followed closely 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), the Life Insurance Companies and the Mutual Fund categories in Q4 2022. (Note: Crane Data's Money Fund Intelligence Daily shows money fund assets skyrocketing this week, increasing by $37.7 billion on Monday and $47.8 billion Tuesday to a record $5.376 trillion. Month-to-date, money fund assets are up an impressive $123.6 billion.)
Crane Data's latest Money Fund Intelligence International shows that assets in European or "offshore" money market mutual funds fell slightly over the past month to $1.066 trillion. EUR & GBP MMFs declined over the past 30 days, while USD funds increased. European MMF assets remain below their record high of $1.101 trillion set in mid-December 2021. These U.S.-style money funds, domiciled in Ireland or Luxembourg but denominated in US Dollars, Pound Sterling and Euros, decreased by $6.7 billion over the 30 days through 3/13. But the totals are still up $36.3 billion (3.5%) year-to-date. (Note that decreases in the U.S. dollar caused Euro and Sterling totals to jump when they're translated back into dollars. See our latest MFI International for more on the "offshore" money fund marketplace. Note that these funds are only available to qualified, non-U.S. investors.)
The March issue of our Bond Fund Intelligence, which will be sent to subscribers Tuesday morning, features the stories, "Latest on Sustainable, ESG Bond Funds: Ultra-Short Hot," which reviews recent news on ESG funds, and "McNerny & Schneider Talk Ultra-Shorts on ETF Edge," which excerpts from a recent CNBC ETF Edge interview. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns plunged in February while yields jumped. 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. Also: Please join us for Crane's Bond Fund Symposium, which will be held next week, March 23-24, 2023, in Boston, Mass.)
The Wall Street Journal writes, "Circle's USDC Stablecoin Breaks Peg With $3.3 Billion Stuck at Silicon Valley Bank." They explain, "A major cryptocurrency operated by Circle Internet Financial Ltd. meant to mimic the value of the U.S. dollar dropped sharply after the company said it had $3.3 billion tied up in the collapsed Silicon Valley Bank. USD Coin fell below 87 cents on Saturday morning, according to data from CoinDesk. The virtual currency, known as a stablecoin, is designed to trade exactly at $1. It is backed by real U.S. dollars and short-term government debt, and sits at the heart of cryptocurrency trading. Breaking its peg with the dollar has the potential to send shock waves through the cryptocurrency world still reeling from the collapse of FTX. For crypto traders, the decline in the value of USD Coin is reminiscent of the worst moments of the 2008 financial crisis when money-market funds that most investors treated as the equivalent of cash 'broke the buck' in the wake of Lehman Brothers failure."
Crane Data's March Money Fund Portfolio Holdings, with data as of Feb. 28, 2023, show that Repo holdings jumped to near record levels after dropping last month. Treasury continued a 12-month slide, and Government agencies also fell. Money market securities held by Taxable U.S. money funds (tracked by Crane Data) increased by $34.5 billion to $5.123 trillion in February, after increasing $49.7 billion in January and $72.6 billion in December. They decreased $24.6 billion in November. MMFs increased $57.7 billion in October and $15.2 billion in September. Repo remained the largest portfolio segment after hitting record levels two month ago, while Treasuries remained in the No. 2 spot. The Federal Reserve Bank of New York, which surpassed the U.S. Treasury as the largest "Issuer" nine months ago, saw Fed RRP issuance held by MMFs jump $106.0 billion to $2.080 trillion. Agencies were the third largest segment, CP remained fourth, ahead of CDs, Other/Time Deposits and VRDNs. Below, we review our latest Money Fund Portfolio Holdings statistics.
Crane Data's latest monthly Money Fund Portfolio Holdings statistics will be sent out Thursday, and we'll be writing our regular monthly update on the new Feb. 28 data for Friday's News. But we also uploaded a separate and broader Portfolio Holdings data set based on the SEC's Form N-MFP filings on Wednesday. (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 Feb. 28, includes holdings information from 987 money funds (down 5 from last month), representing assets of (a record) $5.294 trillion (up from $5.258 trillion). Prime MMFs now total $1.162 trillion, or 22.0% of the total. We review the new N-MFP data, and we also look at our revised MMF expense data, which shows charged expenses and money fund revenues flat in February.
Crane Data's latest monthly Money Fund Market Share rankings show assets were mostly higher among the largest U.S. money fund complexes in February. Money market fund assets increased $56.1 billion, or 1.1%, last month to a record $5.260 trillion. Total MMF assets increased by $147.7 billion, or 2.9%, over the past 3 months, and they've increased by $253.1 billion, or 5.0%, over the past 12 months. In January, Fidelity became the first manager ever to break the $1.0 trillion level and it continued its gains this past month. The largest increases among the 25 largest managers last month were seen by Fidelity, Schwab, Federated Hermes, Goldman Sachs and Morgan Stanley, which grew assets by $26.5 billion, $24.4B, $10.8B, $8.2B and $5.8B, respectively. Large declines in February were seen by SSGA and Dreyfus, which decreased by $8.3 billion and $5.0B, 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 rose yet again in February, below.
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