Money Market News
ICI's latest "Money Market Fund Assets" report shows money market mutual fund assets rebounding after falling sharply the prior week due to tax payments. MMF assets are up by $91 billion, or 1.9%, year-to-date in 2024 (through 4/24/24), with Institutional MMFs down $20 billion, or -0.6% and Retail MMFs up $111 billion, or 6.6%. Over the past 52 weeks, money funds have risen by $715 billion, or 13.6%, with Retail MMFs rising by $502 billion (26.4%) and Inst MMFs rising by $262 billion (7.9%). (Note: Thanks to those who visited with us at the `The New England AFP Annual Conference!)
With less than 2 months to go until Crane's Money Fund Symposium will be held in Pittsburgh, June 12-14, we are also starting preparations for our 10th Annual European Money Fund Symposium. The preliminary agenda has been released and registrations are now being taken for this year's European event, which will take place Sept. 19-20 at the Hilton London Tower Bridge in London, England. We provide more details on both shows below, and feel free to contact us for more information. (Note: If you haven't registered yet for the U.S. Money Fund Symposium, you can still do so via www.moneyfundsymposium.com. Note too: For those attending The New England AFP Annual Conference, April 25-26 in Boston, we hope to see some of you at the show!)
We wrote in our April 19 Link of the Day on a press release titled, "Austrian, French, Italian and Spanish financial market authorities give their key priorities for a macro-prudential approach to asset management," but today we quote from the full publication, "A macro-prudential approach to asset management." It says, "The risks stemming from non-bank financial intermediation (NBFI) have been subject to scrutiny from regulators worldwide since the Global Financial Crisis. The banking regulation tightening that followed, the desire to reduce the economy's dependency on bank financing in a number of jurisdictions, as well as the low (including negative) interest rates policy, have resulted in an increase of the share of NBFI in the global financial system. In addition, several recent events have illustrated the fact that shocks that either spread through or originate from the NBFI world may have a potentially significant negative effect on the real economy, which amounts to say that they are of potential systemic relevance."
The Securities and Exchange Commission's latest monthly "Money Market Fund Statistics" summary shows that total money fund assets fell by $68.5 billion in March to $6.457 trillion, after hitting a record $6.525 trillion the month prior. The SEC shows Prime MMFs rising $8.1 billion in March to $1.415 trillion, Govt & Treasury funds decreasing $78.8 billion to $4.914 trillion and Tax Exempt funds increasing $2.2 billion to $128.3 billion. Taxable yields inched lower in March after dipping in February. 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 April through 4/19, total money fund assets decreased by $61.9 billion to $6.336 trillion, according to our separate, and slightly smaller, MFI Daily series.)
The hits keep coming to the Prime Institutional money fund sector, as Goldman Sachs becomes the latest fund firm to announce an exit from the space. A Prospectus Supplement filing Friday for the $1.6 billion Goldman Sachs Financial Square Money Market Fund and the $2.9 billion Goldman Sachs Financial Square Prime Obligations Fund, including its Administration, Capital, Institutional, Preferred, Select, Service, and Drexel Hamilton Class Shares, explains, "At a meeting held on April 16-17, 2024, upon the recommendation of Goldman Sachs Asset Management, L.P., the Board of Trustees of Goldman Sachs Trust approved a proposal to liquidate the Goldman Sachs Financial Square Money Market Fund and Goldman Sachs Financial Square Prime Obligations Fund, each a series of the Trust. After careful consideration of a number of factors, the Board concluded that it is advisable and in the best interest of the Funds and their shareholders to liquidate the Funds. The Funds are expected to be liquidated on or about September 16, 2024, pursuant to Plans of Liquidation approved by the Board. The Liquidation Date may be changed without notice at the discretion of the Trust's officers." This brings the total of Prime Institutional money funds declaring either pending conversions to Government or pending liquidations to 5 funds to date, representing $229.3 billion in assets, or 34.9% of the $657.0 billion total in Prime Inst MMFs (assets as of 3/31/24). (For more, see these Crane Data News stories: "Federated Liquidating Money Mkt Trust" (4/1/24), "Vanguard Market Liquidity Fund Files to Go Government, Joins American" (3/20/24) and "American Funds Central Cash to Convert to Govt to Avoid Liquidity Fees" (2/6/24).)
ICI's latest "Money Market Fund Assets" report shows money market mutual fund assets falling sharply again to $5.968 trillion as April 15 tax payments hit hard. MMF assets are still up by $82 billion, or 1.7%, year-to-date in 2024 (through 4/17/24), with Institutional MMFs down $29 billion, or -0.9% and Retail MMFs up $111 billion, or 6.6%. Over the past 52 weeks, money funds have risen by $760 billion, or 14.6%, with Retail MMFs rising by $507 billion (26.8%) and Inst MMFs rising by $253 billion (7.6%).
Asset managers, brokerages and banks continue to report first-quarter earnings, but the calls and press releases have been relatively light on money fund and "cash sorting" comments. On the "Charles Schwab Corporation 2024 Spring Business Update Monday, CFO Peter Crawford comments, "The important point is that we sit here today a year removed from the events surrounding the regional banking crisis, we are in a very strong position with nearly all key business and financial indicators improving, in some cases substantially. We have seen meaningful progress back to historical ... organic growth, a continued moderation of client cash realignment activity with the pace slowing even faster than expectations [and] further reduction in the use of supplemental borrowing." Schwab's money fund assets rose to an average of $499.9 billion in Q1'24 from $316.4 billion a year earlier, an increase of $183.5 billion, or 58.0%. Deposits fell from $343.1 billion a year ago to $274.4 billion in Q1, a decline of $68.7 billion, or -20.0%. according to their quarterly earnings release.
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 April 12) includes Holdings information from 70 money funds (up 9 from two weeks ago), or $3.129 trillion (up from $2.941 trillion) of the $6.407 trillion in total money fund assets (or 48.8%) tracked by Crane Data. (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 April 10 News, "April Money Fund Portfolio Holdings: Repo Rises, Treasuries, TDs Fall.")
The Federal Reserve Bank of New York's Liberty Street Economics blog recently featured the article, "Monetary Policy and Money Market Funds in Europe." It states, "As shown in a past Liberty Street Economics post, in the United States, the yields of money market fund (MMF) shares respond to changes in monetary policy rates much more than the rates of bank deposits; in other words, the MMF beta is much higher than the deposit beta. Consistent with this, the size of the U.S. MMF industry fluctuates over the interest rate cycle, expanding during times of monetary policy tightening. In this post, we show that the relationship between the policy rates of the European Central Bank (ECB) and the size of European MMFs investing in euro-denominated securities is also positive -- as long as policy rates are positive; after the ECB introduced negative policy rates in 2015, that relationship broke down, as MMFs received large inflows during this period."
Crane Data's latest Money Fund Intelligence International shows that assets in European or "offshore" money market mutual funds moved higher again over the past 30 days to a record $1.258 trillion, while yields were mostly flat. Assets for USD, EUR & GBP MMFs all rose over the past month. Like U.S. money fund assets, European MMFs have repeatedly hit record highs in 2023 and 2024. These U.S.-style money funds, domiciled in Ireland or Luxembourg and denominated in US Dollars, Pound Sterling and Euros, increased by $15.6 billion over the 30 days through 4/11. The totals are up $60.8 billion (5.1%) year-to-date for 2024, they were 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.) (Note too: For those attending TEXPO 2024, the Texas Treasury & Financial conference, April 14-16 in Houston, stop by Booth #504 to say "Howdy" to Crane Data!)
The April issue of our Bond Fund Intelligence, which will be sent to subscribers Friday morning, features the stories, "Worldwide BF Assets Jump to $12.9 Trillion, Led by U.S," which ICI's latest collection of global bond fund marketplace statistics and "Bond Fund Symposium '24: Spreads Tight, Yield Attractive," which quotes from our recent fixed-income fund conference. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns jumped in March while yields were mixed. 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.)
With just two months to go, preparations are fully underway for Crane Data's big show, Money Fund Symposium. Money Fund Symposium 2024 is scheduled for June 12-14, 2024 at The Westin Pittsburgh, in Pittsburgh, Pa, and we're expecting a record crowd of over 600. The latest agenda for the largest gathering of money market fund managers and cash investors in the world is available and registrations are still being taken. Money Fund Symposium attracts money fund managers, marketers and servicers, cash investors, money market securities dealers, issuers, and regulators. Visit the Money Fund Symposium website at www.moneyfundsymposium.com for more information. Registration is $1,000, and discounted hotel reservations are available. We hope you'll join us in Pittsburgh in June! We review our latest conference information, as well as our upcoming April Treasury show travel schedule (including TEXPO and NEAFP), below.
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