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|Money Funds Getting Hot: Barron's||1|
|Morgan Stanley Talks ESG at AFP; OFN||1|
|Schwab on 'Cash Sorting' Sweeps Shift||1|
|Money Mkt News, Benchmarks||1|
|Brokerage Sweep & Bank Saving||8|
|People, Calendar, Subscription||8|
|Top Performing Tables, Indexes||9-12|
|Fund Performance Listings||13-26|
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The November issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Monday morning, features the articles: "Money Funds Getting Hot: Barron's, FT, WSJ Articles," which discusses the growing interest in and on cash; "Morgan Stanley Talks ESG at AFP; Names OFN for Impact," which reviews Scott Wachs' session on DE&I; and, "Schwab on Cash Sorting; Sweeps Shifting to MMFs," which quotes from the brokerage's recent earnings updates. We also sent out our MFI XLS spreadsheet Monday a.m., and we've updated our Money Fund Wisdom database with 10/31/22 data. Our November Money Fund Portfolio Holdings are scheduled to ship on Wednesday, Nov. 9, and our October Bond Fund Intelligence is scheduled to go out on Tuesday, Oct. 15. (Note: Our MFI, MFI XLS and Crane Index products are all available to subscribers via our Content center. Note too: Crane Data and money market funds will be closed Friday, 11/11, for the Veterans Day Holiday.)
MFI's "Getting Hot" article says, "Money market mutual funds are hot and getting hotter, with articles on them appearing in Barron's, The Wall Street Journal and the Financial Times over the past 2 weeks. Barron's piece, 'Yields on Money-Market Mutual Funds Near 3%,' explains, 'Cash hasn't looked this good in money-market mutual funds for a long time. Yields are averaging 2.77% [now 2.96%], up from 0.02% in early January, according to Crane Data. Retail money funds could soon cross the 3% threshold, assuming that the Federal Reserve keeps raising its benchmark federal-funds rate.'"
It continues, "'Money funds follow the Fed, so there's no mystery of where yields are going,' says Peter Crane.... 'You haven't seen 3% to 4% yields since prior to the [2008-09] financial crisis,' he adds."
Our "Morgan Stanley" piece states, "Late last month, the Association for Financial Professionals hosted AFP 2022, the largest gathering of corporate treasury and cash managers in the country. The event included several sessions on money market fund investing, including one hosted by Morgan Stanley Investment Management's Scott Wachs entitled, 'Navigating Transformation in The Liquidity Investment Ecosystem.' Like some of the other sessions and a lot of the exhibit hall talk, rising rates, ESG investing, regulatory reforms and technology featured prominently in the discussion. We quote from some of the comments below, and also excerpt from a Morgan Stanley press release on its Impact share class."
It says, "Wachs tells the Philadelphia audience, 'There are a confluence of factors across many, many different dimensions in liquidity investments that have changed, or that we anticipate are going to change pretty dramatically over the course of the next few years. So, this is a really important time for Treasury professionals to think about and consider what those changes have been and what those changes will be. How do they impact how you do your jobs, how does that change best practices and how do you optimize your liquidity investments?'"
Our "Cash Sorting" piece states, "On Charles Schwab's '2022 Fall Business Update,' CFO Peter Crawford comments, 'Bank deposits were down 10% ... due to client cash allocation decisions that were broadly consistent with our expectations, given the dramatic increase in rates.... Looking ahead to 2023, we continue to see no reason that the magnitude of client cash sorting will be dramatically different than the last rising rate environment, suggesting balances trough at some point next year.'"
MFI writes, "He explains, 'There's obviously been a lot of commentary, perhaps too much, on the topic of client cash sorting, and we continue to receive a lot of questions. I emphasize that this is a dynamic which we view as very much temporary, quite manageable, and not a factor in our long-term performance.'"
MFI also includes the News brief, "Fed Hikes 6th Time in '22; Rates Head to 4%. The Federal Reserve raised short-term interest rates for the 6th time this year and hiked by 75 basis points for the fourth time in a row. The Federal funds target rate is now in a range from 3.75% to 4.00%, its highest level since 2008. Money fund yields should surge again next week and approach 3.5% in coming weeks and 4.0% by year end."
Another News brief, "SEC Reopens Comments on Reforms, Then Closes Them Again," says, "Their release, sent out `Oct. 11, 'SEC Reopens Comment Periods for Several Rulemaking Releases Due to Technological Error in Receiving Certain Comments' tells us, 'The Securities and Exchange Commission ... reopened the public comment periods for 11 Commission rulemaking releases ... due to a technological error.... The Commission is reopening the comment periods for the affected releases until 14 days following publication of the reopening release in the Federal Register.' The period (and mystery) has now ended. See the latest 'Comments on Money Market Fund Reforms.') See also, 'SEC Proposes Enhancements to Open-End Fund Liquidity Framework,' which proposes swing pricing for bond and stock funds."
Also, a sidebar, "Q3'22 Earnings: No Waivers," states, "Federated Hermes' Q3'22 earnings and quarterly earnings call discussed the end of money fund fee waivers, increases in retail money fund assets, pending money fund regulations and more. Federated's release explains, 'There were no material voluntary yield-related fee waivers during the quarter ended Sept. 30, 2022. During the nine months ended Sept. 30, 2022, voluntary yield-related fee waivers totaled $85.3 million.... During the three and nine months ended Sept. 30, 2021, voluntary yield-related fee waivers totaled $109.2 million and $310.2 million, respectively.'"
Another sidebar, "Chinese MF Developments," says, "Reuters writes, 'China Seeking to Curb Liquidity Risks in $1.4 Trln Money Market Fund – Sources.' They explain, 'Chinese regulators have urged money market fund managers to improve investor structure and ensure adequate holdings of liquid assets, three sources told Reuters, as authorities seeks to head off liquidity risks in the $1.4 trillion sector. Securities regulators have recently asked fund managers to prevent an excessive proportion of institutional investors in money market funds, the sources said. For those funds with more than 70% of assets held by institutions, fund managers must ensure that at least 20% of the money is invested in liquid assets, while bond durations must be kept within 70 days.'"
Our November MFI XLS, with October 31 data, shows total assets increased $42.2 billion to $5.073 trillion, after increasing $1.7 billion in September, $2.3 billion in August, $26.0 billion in July and $31.9 billion in June, but decreasing $10.7 billion in May and $74.3 billion in April. MMFs increased $24.1 billion in March, decreased $34.6 billion in February and decreased $128.1 billion in January. Assets increased $104.6 billion in December and $49.7 billion in November. Our broad Crane Money Fund Average 7-Day Yield was up 32 bps to 2.74%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 22 bps to 2.85% in October.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 3.10% and 3.06%, respectively. Charged Expenses averaged 0.39% and 0.26% for the Crane MFA and the Crane 100. (We'll revise expenses on Tuesday once we upload the SEC's Form N-MFP data for 10/31/22.) The average WAM (weighted average maturity) for the Crane MFA was a record low 16 days (down 2 day from previous month) while the Crane 100 WAM decreased 2 days to 15 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)
Crane Data is preparing for its next live event, our "basic training" Money Fund University, which will take place December 15-16, 2022 at the Hyatt Regency in Boston, Mass. Crane's Money Fund University is designed for those new to the money market fund industry or those in need of a concentrated refresher on the basics, but this year's event will feature a slightly higher level "Master's in Money Markets" agenda. The event also focuses on hot topics like money market fund regulations, money fund alternatives, offshore markets, and other recent industry trends. Our educational conference features a faculty of the money fund industry's top lawyers, strategists, and portfolio managers, and the Boston show will include a Holiday cocktail party and a free training session for Crane Data clients. We review the MFU agenda and some other upcoming conferences, below. (We hope to see many of you at the AFP Treasury show in Philadelphia next week too -- visit us at booth #458!)
Money Fund University offers a 2-day crash course on money market mutual funds, educating attendees on the history of money funds, the Fed, interest rates, ratings, rankings, and money market instruments such as commercial paper, Treasury bills, CDs and repo. We also cover portfolio construction and credit analysis. Registrations are $750 are still being taken, and the latest agenda is available here. (E-mail us to request the latest brochure, and make your hotel reservations soon!)
The morning of Day One (12/15/22) of the 2022 MFU agenda includes: History & Current State of Money Market Mutual Funds with Peter Crane of Crane Data; The Federal Reserve & Money Markets with Katie Craig of BofA; Ratings, Monitoring & Performance with Kimberly Green of Fitch Ratings and Marissa Zuccaro of S&P Global; and, Instruments of the Money Markets Intro with Teresa Ho of J.P. Morgan Securities.
Day One's afternoon agenda includes: Repurchase Agreements with Chris Clarke of J.P. Morgan Securities; Treasuries & Govt Agencies with Sue Hill of Federated hermes and Matt Lachance of TD Securities; Tax-Exempt Securities & VDRNs with John Vetter of Fidelity Investments; Commercial Paper & ABCP with Rob Crowe of Citi Global Markets and CDs, TDs & Bank Debt with Vanessa McMichael of Wells Fargo Securities; and, Credit Analysis & Portfolio Management with Sean Lussier and Peter Hajjar of State Street Global Advisors.
Day Two's (12/16/22) agenda includes: Money Fund Regulations: 2a-7 Basics & History with Brenden Carroll of Dechert LLP and Jamie Gershkow of Stradley Ronon; Money Fund Regulations: Latest 2a-7 Changes with Jon-Luc Dupuy of K&L Gates LLP and Brenden Carroll of Dechert LLP; European MMF Reforms & Offshore Funds with John Hunt of Sullivan & Worcester LLP, Barry Harbison of HSBC Global AM and Peter Crane of Crane Data; and Money Fund Data & Wisdom Demo/Training with Peter Crane. The conference ends with its annual MFU "Graduation" ceremony (where diplomas are given to attendees).
New portfolio managers, analysts, investors, issuers, service providers, and anyone interested in expanding their knowledge of "cash" investing should benefit from our comprehensive program. Even experienced professionals may enjoy a refresher course and the opportunity to interact with peers in an informal setting. Attendee registration for Crane's Money Fund University is just $750, exhibit space is $2,000, and sponsorship opportunities are $3K (Bronze), $4K (Silver), and $5K (Gold). A block of rooms has been reserved at the Boston Hyatt Regency. (Please reserve before 11/16.)
We'd like to thank our past and pending MFU sponsors -- Dreyfus/BNY Mellon, J.P. Morgan Asset Management, Fitch Ratings, TD Securities, S&P Global Ratings, Dechert LLP, BlackRock, Fidelity Investments, K&L Gates, Federated Hermes, Credit Suisse and State Street -- for their support, and we look forward to seeing you in Boston in December. E-mail Pete Crane (firstname.lastname@example.org) for the latest brochure or visit www.moneyfunduniversity.com to register or for more details.
Crane Data is also preparing the preliminary agenda for our next Bond Fund Symposium, which will also be held March 23-24, 2023, at the Hyatt Regency in Boston, Mass. Our Bond Fund Symposium offers a concentrated program for fixed-income managers and dealers with a focus on the ultra-short segment. Registration for Bond Fund Symposium is $1000; exhibit space is $2,000 (includes 2 tickets); and sponsorship opportunities are $3K, $4K, $5K, and $6K. Our mission is to deliver the best possible conference content at a reasonable price to bond fund professionals and investors.
We'll also soon be making plans for our next "big show," Money Fund Symposium, which will be held June 21-23, 2023, at the Hyatt Regency in Atlanta. (Let us know if you'd like details on speaking or sponsoring.) Also, mark your calendars for next year's European Money Fund Symposium, which will be held Sept. 25-26, 2023, in Edinburgh, Scotland. Watch for details on these shows in coming weeks and months.
Also, money market mutual fund distributors and cash managers will be travelling to Philadelphia, Pa. for AFP 2022, the Association for Financial Professionals' big annual gathering of corporate treasurers, which takes place October 23-25. AFP is the largest gathering of corporate investors in the country, attracting roughly 5,000 treasury management professionals, as well as a host of large banks and institutional money fund managers.
At AFP, sessions involving money funds and/or cash investing include: "Modernizing Liquidity And Investments For A Resilient Treasury," with American Honda Motor Company's Kimberly Kelly-Lippert, MetLife's Thomas Lenahan, ICD's Sebastian Ramos and Kyriba's Bob Stark; "Global Insights And Best Practices In Short-Term Investment Policies And Thinking?" with Citibank's Steven Kraus, Hitachi Vantara LLC's Catherine Fields and AMG Advanced Metallurgical Group's Dan Chila; "Heave-Ho: Lifting Barriers And Creating Positive Social Outcomes Through Cash Investing" with Cabrera Capital's Robert Aguilar, SAP SE's Jerry Bernard, Navient Corporation's Scott Booher and BlackRock's Eion D'Anjou; and, "Navigating Transformation In The Liquidity Investment Ecosystem," with Morgan Stanley's Scott Wachs, AbbVie Inc.'s Timothy Kolenda, Comcast Capital Corporation's Roberta Eiseman and Autodesk Inc.'s Brandon Hillstead.
Finally, thank you once again to those who supported last month's European Money Fund Symposium, which took place Sept. 25-26 in Paris, France! Let us know if you'd like to see the binder from this show (available to clients only) or if you'd like more details on any of our events. We hope to see you in Philly next week, in Boston in December (or March), in Atlanta in June or in Edinburgh in September 2023!
The October issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Friday morning, features the articles: "Third Time's a Charm: Money Funds Turn 50 and Break 3.0%," which discusses money funds 50th birthday and yields at 3.0%; "European Money Fund Symposium: Positive in Paris," which reviews our latest conference on "offshore" money funds; and, "Worldwide MF Assets Fall in Q2'22, Led by US, Ireland, Lux," which quotes from ICI's latest global money fund statistics. We also sent out our MFI XLS spreadsheet Friday a.m., and we've updated our Money Fund Wisdom database with 9/30/22 data. Our October Money Fund Portfolio Holdings are scheduled to ship on Wednesday, Oct. 12, and our October Bond Fund Intelligence is scheduled to go out on Monday, Oct. 17. (Note: Our MFI, MFI XLS and Crane Index products are all available to subscribers via our Content center. Note too: Crane Data and money market funds will be closed Monday for the Columbus Day Holiday.)
MFI's "Third Time's a Charm" article says, "The Federal Reserve raised short-term interest rates by 75 basis points for the third time in a row, to a range of 3.0% to 3.25%, its highest level since 2008. Money fund yields, which of course follow the Fed, are about to hit 3.0% on average, while the top-yielding funds have already broken above this level. Finally, money market mutual funds celebrate their 50th birthday this month ... for the third time."
It continues, "While we mentioned both one year ago and two years ago that money market funds marked their 50th birthday, one could argue that 1972 was the real live date of Reserve Primary Fund, the first money fund. (It filed in October 1970 and went live in October 1971, but it didn't get approval and investors into the fund until October 1972.)"
Our "European" piece goes, "Crane Data hosted its European Money Fund Symposium in Paris last week, and the event focusing on money funds domiciled outside the U.S. attracted a record 166 attendees. Though it was rainy in Paris, spirits were high as rising rates and positive euro yields (for the first time since 2014) out-weighed concerns over potential regulatory changes and sterling gyrations."
It also says, "Our Day 2 agenda began with 'ICI Global & EFAMA Talk Regulatory Issues,' which featured updates from ICI Global's Michael Pedroni and EFAMA's Federico Cupelli. Pedroni explains, 'What I'll do here is give a quick lay of the land of what we see in the pipeline. My observations are really structured around two key considerations.... One is swing pricing.... We don't particularly like swing pricing, and I’ll talk about that. But there is quite a bit of talk among regulatory authorities about implementing swing pricing for money funds. Then the second area is the elimination of the tie between the liquidity thresholds and fees and gates. And just to give a sneak preview, we kind of like that. So those are the two policy issues.'"
Our "Worldwide" update states, "The Investment Company Institute's latest 'Worldwide Regulated Open-Fund Assets and Flows, Second Quarter 2022' 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."
MFI writes, "ICI's release says, 'Worldwide regulated open-end fund assets decreased 11.5% to $59.91 trillion at the end of the second quarter of 2022, excluding funds of funds. Worldwide net cash outflow to all funds was $130 billion in the second quarter, compared with $79 billion of net inflows in the first quarter of 2022. 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 [Q2'22] contains statistics from 46 jurisdictions.'"
MFI also includes the News brief, "WSJ's Zweig Says Cash Is Not Trash. The Wall Street Journal writes 'Three Ways You Can Cash In on Cash.' Columnist Jason Zweig tells us, 'Cash isn't trash anymore. With stocks -- and just about every other asset -- taking a beating this year, even the most aggressive investors can suddenly see the virtue of keeping some money liquid and safe from market turmoil. And, at long last, your cash can earn income you don't need a microscope to detect.'"
Another News brief, "Money Fund Charged Expense Ratios (Exp%) Inched Lower," says, "Money Fund Charged Expense Ratios (Exp%) Inched Lower in August to 0.38% from 0.41% the prior month (after jumping earlier this year from 0.08% at the start of 2022). Our Crane 100 Money Fund Index and Crane Money Fund Average were 0.26% and 0.38%, respectively, as of Aug. 31, 2022. 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. (We'll revise our latest monthly MFI XLS spreadsheet and historical craneindexes.xlsx averages file to reflect the latest expenses, gross yields, portfolio composition and maturity breakout on Tuesday.)"
Also, a sidebar, "SSGA to Liquidate ESG MMF," states, "A Prospectus Supplement filing for State Street ESG Liquid Reserves Fund states, 'The Trust's Board of Trustees has approved a Plan of Liquidation and Termination of Series with respect to the Fund, pursuant to which the Fund is expected to be liquidated and terminated on or about October 28, 2022. The Plan authorizes the Fund and its investment adviser, SSGA Funds Management, Inc., to engage in such transactions as may be appropriate for the Fund's liquidation and dissolution."(For more on ESG & Social Money Market Funds, see our May 12 Crane Data News, and hotlinks at the end of that story, "UBS AM Explains Sustainability in Liquidity; Federated Adds SGD Shares.")
Another sidebar, "French MMFs Hit by Outflows," says, "Moody's Investors Service published '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 ... turbulence.'"
Our October MFI XLS, with September 30 data, shows total assets increased $1.7 billion to $5.043 trillion, after increasing $2.3 billion in August, $26.0 billion in July and $31.9 billion in June, but decreasing $10.7 billion in May and $74.3 billion in April. MMFs increased $24.1 billion in March, decreased $34.6 billion in February and decreased $128.1 billion in January. Assets increased $104.6 billion in December, $49.7 billion in November and $20.5 billion October. Our broad Crane Money Fund Average 7-Day Yield was up 51 bps to 2.42%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) was up 61 bps to 2.63% in September.
On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both were both higher at 2.79% and 2.86%, respectively. Charged Expenses averaged 0.38% and 0.26% for the Crane MFA and the Crane 100. (We'll revise expenses on Tuesday once we upload the SEC's Form N-MFP data for 9/30/22.) The average WAM (weighted average maturity) for the Crane MFA was a record low 18 days (down 1 day from previous month) while the Crane 100 WAM decreased 2 days to 17 days. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)