Money fund yields continued inching higher after jumping immediately after the Fed's latest 75 bps hike on July 27. Our Crane 100 Money Fund Index (7-Day Yield) rose 5 basis points to 1.94% the week ended Friday, 8/12. Yields rose by 33 basis points the previous week and 23 basis points the week before that. On average, they're up from 1.57% on July 29, up from 1.18% on June 30 and more than triple their level of 0.58% on May 31. MMF yields are up from 0.21% on April 29, 0.15% on March 31 and 0.02% on February 28 (where they'd been for almost 2 years prior). Yields should keep inching higher and should approach 2.0% on average in coming days. Our broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 671), shows a 7-day yield of 1.82%, up 7 bps in the week through Friday. The Crane Money Fund Average is up 79 bps since beginning of July and up 135 bps from 0.47% at the beginning of June.
Prime Inst MFs were up 6 bps to 2.09% in the latest week, up 82 bps since the start of July and up 145 bps since the start of June (close to double from the month prior). Government Inst MFs rose by 7 bps to 1.88%, they are up 78 bps since start of July and up 134 bps since the start of June. Treasury Inst MFs up 7 bps for the week at 1.83%, up 79 bps since beginning of July and up 133 bps since the beginning of June. Treasury Retail MFs currently yield 1.57%, (up 5 bps for the week, up 77 bps since July and up 127 bps since June), Government Retail MFs yield 1.57% (up 9 bps for the week, up 78 bps since July started and up 131 bps since June started), and Prime Retail MFs yield 1.93% (up 8 bps for the week, up 86 bps from beginning of July and up 145 bps from beginning of June), Tax-exempt MF 7-day yields rose by 19 bps to 1.31%, they are up 75 bps since the start of July and up 91 bps since the start of June.
According to Monday's Money Fund Intelligence Daily, with data as of Friday (8/12), just 28 funds (out of 818 total) still yield between 0.00% and 0.99% with assets of $11.0 billion, or 0.2% of total assets; 187 funds yield between 1.00% and 1.49% with $176.3 billion in assets, or 3.5%; 183 funds yielded between 1.50% and 1.74% with $953.8 billion or 19.0%; 196 funds yielded between 1.75% and 1.99% ($1.333 trillion, or 26.5%); 179 funds yielded between 2.00% and 2.24% ($2.202 trillion, or 43.8%) and 45 funds yielded 2.25% or more ($346.5 billion, or 6.9%).
Brokerage sweep rates also inched higher over the past week too, as Ameriprise Financial tweaked its rates upwards. Our latest Brokerage Sweep Intelligence shows brokerages paying an average of 0.26% on FDIC insured deposits, up from 0.16% a month ago and 0.05% two months ago. Our Crane Brokerage Sweep Index, the average rate for brokerage sweep clients (almost all of which are swept into FDIC insured accounts; only Fidelity sweeps to a money market fund), rose 1 basis point to 0.26%. This follows increases over the past couple of months but also follows 2 straight years of yields at 0.01%. Sweep yields were 0.12% on average at the end of 2019 and 0.28% on average at the end of 2018. The latest Brokerage Sweep Intelligence, with data as of Aug. 12, shows one change over the previous week.
BSI reports that Ameriprise Financial increased rates to 0.11% for all balances between $1K and $99K, to 0.13% for balances between $100K and $249K, to 0.20% for balances between $250K and $499K, to 0.21% for balances between $500K and $999K, to 0.33% for balances between $1 million and $4.9 million, and to 0.46% for balances of $5 million and over for the week ended August 12. Just three of 11 major brokerages still offer rates of 0.01% for balances of $100K (and most other tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
On other news, ICI released its latest monthly "Money Market Fund Holdings" summary, which reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds.
The MMF Holdings release says, "The Investment Company Institute (ICI) reports that, as of the final Friday in July, prime money market funds held 36.5 percent of their portfolios in daily liquid assets and 52.9 percent in weekly liquid assets, while government money market funds held 88.2 percent of their portfolios in daily liquid assets and 93.8 percent in weekly liquid assets." Prime DLA was up from 32.6% in June, and Prime WLA was also up from 49.4%. Govt MMFs' DLA increased from 87.3% in June and Govt WLA increased from 92.7% the previous month.
ICI explains, "At the end of July, prime funds had a weighted average maturity (WAM) of 17 days and a weighted average life (WAL) of 55 days. Average WAMs and WALs are asset-weighted. Government money market funds had a WAM of 26 days and a WAL of 69 days." Prime WAMs were 1 day longer and WALs were 2 days shorter from the previous month. Govt WAMs were 2 day shorter and WALs were 2 days shorter from June.
Regarding Holdings by Region of Issuer, the release tells us, "Prime money market funds' holdings attributable to the Americas rose from $204.49 billion in June to $212.71 billion in July. Government money market funds' holdings attributable to the Americas declined from $3,798.43 billion in June to $3,782.80 billion in July."
The Prime Money Market Funds by Region of Issuer table shows Americas-related holdings at $212.7 billion, or 45.5%; Asia and Pacific at $90.7 billion, or 19.4%; Europe at $157.9 billion, or 33.8%; and, Other (including Supranational) at $5.9 billion, or 1.3%. The Government Money Market Funds by Region of Issuer table shows Americas at $3.783 trillion, or 94.3%; Asia and Pacific at $72.8 billion, or 1.8%; Europe at $138.2 billion, 3.4%, and Other (Including Supranational) at $16.1 billion, or 0.4%.
