Daily Links Archives: February, 2018

The FDIC's latest Quarterly Banking Profile" comments, "Net operating revenue of $192.2 billion, was $10 billion (5.5 percent) higher than fourth quarter 2016. Net interest income grew by $10.2 billion (8.5 percent), while noninterest income fell by $202.4 million (0.3 percent). More than four out of five banks (86.4 percent) reported higher net interest income from a year ago, as interest-bearing assets increased (up 4.4 percent) and the average NIM increased to 3.31 percent from 3.16 percent a year ago. This is the highest quarterly NIM for the industry since fourth quarter 2012. More than two out of three banks (70 percent) reported higher net interest margins than a year earlier." It adds, "Total deposits increased by $179.8 billion (1.4 percent) in the fourth quarter. Balances in domestic interest-bearing accounts rose by $153.7 billion (1.8 percent), and balances in noninterest-bearing accounts grew by $7.8 billion (0.2 percent). Domestic deposits in accounts larger than $250,000 increased by $159.6 billion (2.5 percent) from third quarter 2017. Nondeposit liabilities declined by $8.9 billion (0.4 percent),as other liabilities were down $29.3 billion (7.3 percent)." See also, new Federal Reserve Chair Jerome Powell's "Semiannual Monetary Policy Report to the Congress."

A recent press release, entitled, "Public Trust Advisors Appoints New Chief Investment Officer" says, "Public Trust Advisors, LLC (Public Trust) announces the appointment of Othneil (Neil) Waud, CFA to the position of Chief Investment Officer. Since 2011, Neil has served on the Public Trust Portfolio Management team, professionally positioning the firm across various asset classes throughout the country. With nearly two decades of asset management experience, Neil brings a rich background in market analysis, risk management, and portfolio construction to the organization. He will continue to serve as Managing Director and will now lead the trading desk as well as firmwide investment strategy." CEO Tom Jordan comments, "Neil's extensive experience will allow us to continue delivering strategic advice and investment solutions to our clients.... Our strong investment team continues to be well positioned to guide our clients and serve our program participants with all of their investment related needs." The release adds, "As Chief Investment Officer, Neil replaces Randy Palomba, CFA who will assume additional responsibilities throughout the growing firm. Randy has served in the role of Chief Investment Officer since the inception of Public Trust and will continue to hold integral responsibilities within the organization and management team.... Public Trust Advisors investment services for the public sector include the management of local government investment pools (LGIP) and separately managed, individual investment accounts (SMA)." (See Crane Data's recent profile of Waud and Palomba in MFI.)

The latest "Minutes of the Federal Open Market Committee, January 30-31, 2018," which were released last week, tell us, "The deputy manager followed with a discussion of recent developments in money markets and FOMC operations. Year-end pressures were evident in the market for foreign exchange basis swaps, but conditions returned to normal early in 2018. Yields on Treasury bills maturing in early March were elevated, reflecting investors' concerns about the possibility that a failure to raise the federal debt ceiling could affect the timing of principal payments for these securities.... The deputy manager also reported on the volume of overnight reverse repurchase agreement operations over the intermeeting period and discussed the Desk's plans for small-value operational tests of various types of open market operations over the coming year." The Minutes add, "The FOMC's decision at its December meeting to raise the target range for the federal funds rate was transmitted smoothly to money market rates. The effective fed-eral funds rate held steady at a level near the middle of the target range except at year-end. While borrowing costs moved up briefly in offshore dollar funding markets over year-end, conditions in money markets were reported to be orderly. In line with recent year-end ex-periences, rates and volumes in the federal funds and Eurodollar markets declined, while in secured markets, rates on Treasury repurchase agreements increased. After year-end, pressures in money markets abated quickly and rates and volumes returned to recent ranges."

ICI's latest "Combined Estimated Long-Term Fund Flows and ETF Net Issuance" shows big outflows in the latest week, their first decline in months and biggest in over a year. They write, "Total estimated outflows from long-term mutual funds and exchange-traded funds (ETFs) were $11.88 billion for the week ended February 14, 2018, the Investment Company Institute reported today. Estimated mutual fund outflows were $6.46 billion while estimated negative net issuance for ETFs was $5.42 billion. Reports of long-term flow estimates and ETF net issuance are available on the ICI website." The ICI explains, "Bond funds had estimated outflows of $12.11 billion for the week, compared to estimated inflows of $7.30 billion during the previous week. Taxable bond funds saw estimated outflows of $11.47 billion, and municipal bond funds had estimated outflows of $640 million." For more on recent trends in the bond fund marketplace, ask us for a free copy of our latest Bond Fund Intelligence newsletter and check out the agenda for our upcoming Bond Fund Symposium, which will be held March 22-23, 2018 at the InterContinental Los Angeles Downtown. (Our first event last year in Boston attracted 150 bond fund managers, marketers, fixed-income issuers, investors and service providers, and we expect our LA show to be even bigger. Registration for Bond Fund Symposium is $750.)

Kiplinger's writes "Boost the Returns on Your Cash in Retirement." They explain, "You can be forgiven if you have ignored your safe-haven investments for the past few years. In brokerage sweep accounts, money-market mutual funds and other ultra-conservative vehicles available in brokerage and retirement accounts, yields have generally been laughably low-and the gaps between them trivial. But now, the question of where to stash cash is starting to get serious again." The article tells us, "2017 was really the first year in almost a decade that it mattered where you had your cash, says Peter Crane, president of money-fund tracker Crane Data. As the Federal Reserve raises rates, yields on safe-haven holdings get a boost. The rising tide lifts some boats much faster than others. The yield on the average brokerage sweep account is stuck at roughly 0.1%, according to Crane Data. But yields on many money market funds have now climbed well above 1%, after scraping along near zero for much of the past decade. And stable value funds, which are available in 401(k)s and other savings plans, yield roughly 2% and are inching higher." Kiplinger's adds, "For some investors, the whole purpose of a money market fund is to have instant access to cash-making potential withdrawal restrictions a non-starter. These investors might instead consider government money market funds, which are not required to impose withdrawal restrictions, or ultra-short term bond funds."

Bottom Line Personal features the brief, "Yields on Money-Market Funds Finally Perk Up." It says, "For the first time in nearly a decade, yields on some money-market mutual funds are topping 1%. The yields are still far short of the nearly 5% levels available a decade ago, but if you are an investor seeking to temporarily park some assets in a very safe fund, the current yields are much more tempting than the near-zero yields that were prevalent over the past several years.... What to do.... Make sure cash at mutual fund firms is placed in a money fund, not a "sweep" account. If you don't, cash generated by dividend and interest payments may go into a sweep account, which is FDIC insured but provides tiny yields, averaging 0.11%. Choose the right money fund. Fidelity alone offers dozens, ranging from those that hold US Treasury debt to those that invest in state-specific securities that provide tax-exempt income. Funds that offer the highest yields, called "prime" or general purpose funds, can invest in a mix of ... securities." (Note: Bottom Line interviewed our Peter Crane for this article.)

Invesco Senior Client Portfolio Manager Rob Corner posted a blog piece entitled, "Will cash be king as the Fed hikes rates? this week. Subtitled, "Cash yields have risen along with rates, which may help investors reduce duration risk," the brief says, "US money market fund balances recently reached their highest level in seven years and, according to Crane Data, average money market fund yields crossed the 1% threshold for the first time since November 2008. Invesco Global Liquidity believes that more investors may consider cash and conservative fixed income solutions as part of their active asset allocation in the near term for multiple reasons.... Yields on cash and conservative low duration vehicles have become more attractive since the US Federal Reserve (Fed) began removing monetary policy accommodation and moved away from a near-zero federal funds rate. Since December 2015, this policy shift has driven the federal funds rate higher by 125 basis points. As the Fed continues to push the federal funds rate higher, we expect yields on US money market funds and other cash and conservative low duration vehicles to become even more attractive on a relative basis." Corner explains, "Invesco Global Liquidity believes cash and conservative low duration vehicles could outperform short-term and intermediate fixed income strategies during the current Fed hiking cycle. In each of the last five Fed tightening cycles, the three-month US Treasury bill index outperformed 1-3 year, 1-5 year, and 1-10 year government and credit indices.6 The average of this relative outperformance ranged from just over 100 basis points, annualized, versus the 1-3 year index, to more than 200 basis points, annualized, versus the 1-10 year index.... In this environment, we believe an active allocation to cash and conservative low duration strategies may be considered by investors as a method to help reduce overall fixed income duration risk." He adds, "The newly signed Tax Cuts & Jobs Act of 2017 could result in modest increases in bank deposits and US money market fund balances as corporations are incentivized by lower tax rates to bring cash back onshore. While the amount and extent of repatriation remains to be seen, we believe these asset flows may be smaller than expected, and we anticipate limited impact on money market rates in the near term. We believe any increases in US money market fund balances due to repatriation are likely to be orderly and relatively short-lived, as corporations ultimately redeploy their cash to reduce debt, reward shareholders, increase capital expenditures, pursue mergers and acquisitions, and/or benefit employees. Regardless of the eventual use of cash, US money market funds and other cash equivalents should be an important parking spot for these balances.... Recent history has demonstrated the value of cash during a Fed tightening regime. We believe investors may wish to consider an active allocation to cash and conservative low duration strategies to capture these market dynamics that favor cash and potentially reduce interest rate risk."

After jumping last week as investors sought shelter from market turmoil, money fund assets inched higher in the latest week, according to the `Investment Company Institute's latest "Money Market Fund Assets" report. ICI writes, "Total money market fund assets increased by $2.00 billion to $2.83 trillion for the week ended Wednesday, February 14, the Investment Company Institute reported today. Among taxable money market funds, government funds decreased by $625 million and prime funds increased by $2.72 billion. Tax-exempt money market funds decreased by $96 million." Total Government MMF assets, which include Treasury funds too, stand at $2.227 trillion (78.7% of all money funds), while Total Prime MMFs stand at $463.2 billion (16.4%). Tax Exempt MMFs total $138.0 billion, or 4.9%. They explain, "Assets of retail money market funds increased by $2.86 billion to $1.01 trillion. Among retail funds, government money market fund assets increased by $3.43 billion to $618.34 billion, prime money market fund assets decreased by $462 million to $263.18 billion, and tax-exempt fund assets decreased by $99 million to $130.79 billion." Retail assets, which retook the $1 trillion level last week, account for over a third of total assets, or 35.8%, and Government Retail assets make up 61.1% of all Retail MMFs. The release adds, "Assets of institutional money market funds decreased by $869 million to $1.82 trillion. Among institutional funds, government money market fund assets decreased by $4.05 billion to $1.61 trillion, prime money market fund assets increased by $3.18 billion to $200.02 billion, and tax-exempt fund assets were unchanged at $7.17 billion." Institutional assets account for 64.2% of all MMF assets, with Government Inst assets making up 88.6% of all Institutional MMFs.

Bloomberg writes, "Muni money funds show signs of life," which tells us, "If 2017 was the year the municipal money market funds stopped bleeding assets, 2018 is the year they've started growing again. Tax-exempt money market fund assets have increased by almost $7 billion since the beginning of the year, seven times as much as all last year, according to Investment Company Institute data.... Yields on municipal securities that reset weekly rose to 1.71% at the end of December, the highest since October 2008, after the Federal Reserve raised interest rates for the third time in 2017. Since then, yields have dropped to 0.98%." The article explains, "Tax-exempt money market funds are growing again after tepid growth in 2017 and the hemorrhaging of more than $100 billion in the first 10 months of 2016, a reaction to Securities and Exchange Commission rules aimed at reducing the risk of runs on the pools. The rules required municipal money market funds to adopt floating net-asset values and imposed liquidity fees and redemption suspensions under certain conditions." They quote "You had the double whammy of zero yields and regulatory changes," said Peter Crane, president of Westborough, Mass.-based Crane Data." Bloomberg adds, "Municipal money market fund assets have grown to $138.1 billion as of Feb. 7 from $131.2 billion on Dec. 27, ICI said."

A statement entitled, "Fitch: Euro LVNAV Viability Now Hinges on Higher Interest Rates," tells us, "The launch of euro-denominated "low volatility net asset value" (LVNAV) funds now appears to hinge on a rise in interest rates, following the European Commission's statement on 2 February 2018 that share cancellation mechanisms will not be allowed under European money market fund (MMF) reforms, Fitch Ratings says. Without share cancellation or a change in the regulatory mindset, LVNAV funds will not be viable unless short-term euro interest rates turn positive. One-week euro LIBOR was -43bp on 2 February. Given low euro interest rates, euro-denominated constant net asset value (CNAV) MMFs routinely apply share cancellation to maintain a stable net asset value per share, an important feature for many investors. Most providers thought they would convert their CNAV funds to the new LVNAV fund category being introduced by the reforms, and saw LVNAV funds as central to their post-reform product line-up. But the launch of euro LVNAV funds is now in doubt unless short-term rates rise to the extent that such funds could sustainably deliver positive yields and thus avoid need to apply share cancellations." Fitch adds, "A key attraction of the LVNAV fund type for investors is its ability to offer a stable price per share provided certain conditions are met. However, while short-term rates remain low or negative, euro CNAV providers may have little option but to convert to VNAV MMFs. We estimate assets under management of about EUR100 billion in euro CNAV MMFs. The launch of LVNAV funds in US dollars and sterling does not appear at risk, given the higher short-term rates for these currencies. We estimate about USD350 billion in US dollar CNAV funds and GBP220 billion in sterling CNAV funds." (See also our Feb. 5 News, "EC Letter Bans Reverse Exchanges in New European Money Fund Regs.")

The latest "Municipal sector" update from Wells Fargo Asset Management's latest "Portfolio Manager Commentary," tells us, "Municipal money market yields fell back to earth during the month of January as strong seasonal reinvestment cash reignited demand for tax-exempt paper throughout the short end of the curve. An accompanying drop in new-issue supply from December's record-setting pace exacerbated the dramatic shift in market dynamics. Yields on variable-rate demand notes (VRDNs) and tender option bonds (TOBs) in the overnight and weekly space, which had experienced the highest degree of volatility during the month of December, quickly began to normalize to more reasonable ratios relative to taxables during the month. The Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Index, which had spiked to a multiyear high of 1.71% (116% of one-week LIBOR) during the month of December, quickly shifted into downward mode. The index fell for five consecutive weeks before eventually closing out the month at 1.08% (73% of one-week LIBOR). Strong reinvestment demand extended further out on the municipal curve, driving yields on tax-exempt commercial paper, notes, and bonds lower as well. Ultimately, yields on high-grade one-year notes finished out the month at 1.40%, down from 1.46% at year-end." Wells update adds, "During the month, we continued to emphasize principal preservation and liquidity by targeting our purchases in VRDNs and TOBs with daily and weekly puts. Despite the rapid but expected drop in rates in the short end during the month, we continue to feel that this sector of the curve offers compelling nominal and after-tax return for municipal investors. Additionally, we continue to feel that a focus on liquidity and principal preservation is prudent, particularly given the relative flatness of the municipal money market yield curve and increasing prospects for further monetary policy tightening in 2018."

The Hill published an opinion piece on H.R. 2319, the bill to roll back the floating NAV. The opinion, which contains a number of inaccuracies, is entitled, "Rolling back regulations for money market funds is a dangerous game." It says, "Rising defaults in subprime mortgages may have started the global financial crisis rolling in 2007, but it was a failure in money market mutual funds that helped bring global capital markets to a halt nearly a year later. Plagued with a faulty pricing model and declining credit standards, and funded by sophisticated and financially agile investors, bad investments by some of these short-term funds added greatly to the sense of panic. Nevertheless, some in the money fund sector continue to fight for a rollback on the limited systemic protections the Securities and Exchange Commission (SEC) imposed in 2013. A bill in the House of Representatives would undo a part of that rule prohibiting use of a stable net asset value for institutional money funds. It would further exempt such funds from another provision imposing default liquidity fee requirements when funds don’t invest 10 percent or more of total assets in short-term liquid assets. To accommodate the rollback, the bill would appropriately prohibit federal bailouts of any money market funds and require disclosure that bailouts are prohibited, though that is only partially believable in light of what happened in 2008. Undoing unnecessary and unproductive regulation imposed on investment markets is one thing. Making capital markets susceptible to the kind of financial mayhem visited upon the world a decade ago by removing modest systemic risk protections is something entirely different. It is a rollback that I do not support."

Dan Wiener, Editor of "The Independent Adviser for Vanguard Investors," released a statement entitled, "Vanguard Investors' Heavy in Stocks, Low on Cash." He explains, "Vanguard investors haven't been this heavily invested in stock funds since the tech bubble. Combining U.S. and foreign equity funds, annuities and ETFs, Vanguard investors now have 69% of their assets invested in stocks. (In fact, since the market bottom their allocation to stocks has risen by almost 55%.) Another 4% of assets are in balanced funds. Cash allocations have been trending down since the market lows of early 2009 and driven no doubt by low, low yields.... Money market funds now represent just 5% of invested assets at Vanguard." Wiener, who produces the totals from his monthly tracking of Vanguard fund assets, asks, "Is it any wonder then that panicky Vanguard investors may have been part of the reason the firm's systems were overloaded during the market swoon on Monday?" He adds, "Vanguard also predicts that global bonds will compound at just 2% to 3% over the next ten years. With Total Bond Market Index currently yielding 2.63% one can expect U.S. bonds to generate returns of between 1.6% and 3.6% over the next decade. Low expectations for bond returns may be one reason Vanguard investors have slowly allowed their allocations to bonds to drift downward. Over the last 25 years or so the average allocation to bond funds has been 23%, about where it is today." Wiener's series shows money markets totaling over 20% in 1995, about 17% in 2000, around 12.5% in 2005, approximately 10% in 2010, and 6% in 2015.

A press release entitled, "Fitch Assigns First-Time Ratings to Payden & Rygel Managed Florida LGIPs," tells us, "Fitch Ratings has assigned a 'AAAmmf' rating to the Florida Trust Day to Day Fund and 'AAAf/S1' International Fund Credit Quality Ratings (FCQR) and Fund Market Risk Sensitivity Rating to the Florida Local Government Investment Trust - Short Term Bond Fund, managed by Payden & Rygel.... The assignment of a 'AAAmmf' rating to the Florida Trust Day to Day Fund reflects: The fund's overall credit quality and diversification; Low exposure to interest rate and spread risks; Holdings of daily and weekly liquid assets consistent with shareholder profile and concentration; Maturity profile consistent with Fitch's 'AAAmmf' rating criteria; and, The capabilities and resources of Payden & Rygel." Fitch says of the Florida Trust Day to Day Fund, "`The fund seeks to maintain a diversified, high credit quality portfolio consistent with Fitch's criteria for 'AAAmmf' rated money market funds (MMFs), by investing in highly rated securities with limited exposure to individual issuers. The investment policy details minimum credit ratings by security type, with a minimum of 'F1' or the equivalent. As of Nov. 1 2017, the portfolio invested at least 56% in securities rated 'F1+' by Fitch or equivalent and 44% in securities rated 'F1' by Fitch or equivalent.... The fund is managed to comply with the risk-limiting provisions of SEC Rule 2a-7 for money market funds. As of Nov. 1 2017, the weighted average maturity of the fund was 46 days.... The fund seeks to maintain sufficient levels of daily and weekly liquidity to meet investor redemptions. The fund's investor base was relatively concentrated with a large top investor." The release adds, "Both funds are managed by Payden & Rygel. Payden & Rygel specializes in low duration strategies and managing funds for institutional clients including public/government entities. As of Sept. 30, 2017, Payden & Rygel had approximately $116 billion in total assets, including $72 billion in short duration strategies."

Invesco writes "US Treasuries contend with debt ceiling deja vu." Subtitled, "Extraordinary funding measures are running out, and concerns are evident in Treasury yields," the piece explains, "The so-called 'extraordinary measures' that are currently being used to fund the US government are projected to run out in early March. With this 'drop-dead' date quickly approaching, it appears that the Treasury bill market is already reacting to the potential disruption. Below I answer some frequently asked questions about the debt ceiling, extraordinary measures and the impact on Treasury markets." Portfolio Manager Justin Mandeville writes, "When is the government likely to run out of funds? US Treasury Secretary Steven Mnuchin has stated that the US Treasury has sufficient cash to last through the end of February before it exhausts its extraordinary borrowing measures.... This has caused market participants to be cautious about investing in Treasury bills that mature in early March. What has been the market reaction? Concern that the drop-dead date may occur in early March is already evident in US Treasury yields. The yield on Treasury bills due March 1, 2018, is higher compared with bills due Feb. 22, 2018, creating a 'kink' at the front end of the Treasury yield curve. Investor concerns remained evident at the most recent auction of the 1-month Treasury bill maturing March 8, 2018. The auction resulted in a yield of 1.48%, which is 28 basis points higher versus the Treasury bills maturing on Feb. 22, 2018.1 These elevated yields suggest that market participants are concerned that Treasury bills may be susceptible to a payment delay by the Treasury, and have been managing their exposures accordingly." Finally, he adds, "Invesco Fixed Income believes there will likely be a debt ceiling agreement that allows the government to continue to fund itself and honor its obligations. However, we think an agreement is likely to be last minute — with timing potentially in late February.... Following the completion of a debt ceiling deal (our base case), we believe the market's focus will likely turn to Treasury bill supply."

Federated Investors' latest "Month in Cash" explains, "For an entity whose leader has essentially been let go ("You're fired") by the new boss, the Federal Reserve (Fed) is expected to have a smooth transition from Chair Janet Yellen to incoming head Jerome Powell. Down the road, Powell undoubtedly will put his stamp on policy, and probably financial regulation, as well. But in the short term, the shift should be like a copilot taking the controls when the pilot needs a break. Of course, that doesn't happen when the airplane is fighting turbulence.... Given the amount of open seats on the FOMC -- four now and five if New York Fed President William Dudley retires and the Senate doesn't confirm Marvin Goodfriend -- Powell might be best served letting the dot plot and other projections do the talking. That the tapering of the balance sheet has begun on a set path will help.... Challenges are on the horizon, including the pace of rate hikes if inflation wakes up -- or animal spirits rouse it -- and the potential that wages finally take off. I didn't mention the debt ceiling as a challenge because we have very few concerns that the government will allow a technical default. We have been down this path before. But that's our strategic outlook; tactically, we are preparing for it by generally avoiding trades in the 4- to 6-week range unless they are slam dunks. Those still exist because the market has no consensus on exactly when the Treasury would run out of extraordinary measures and have to go to, well, even more extraordinary measures. As of now, there's not been much pressure on any particular bills."

Today's "Link of the Day" once again looks back 10 year ago, when the Subprime Liquidity Crisis was taken up another notch with the freezing of ARS, or auction rate securities. We wrote on Feb. 3, 2008 the news update, "Auction-Rate Securities Cover Headlines With Bristol-Myers Squibb Loss. The decade-old piece explains, "The broader investment world is getting a crash-course in the arcane world of auction-rate securities as news of Bristol-Myers Squibb's $275 million impairment charge on an investment of $811 in ARS hit the wires this week. (See our "Link of the Day" and the Bloomberg article.) Auctions began failing in August, causing these securities to turn into longer-term holdings and causing an exodus from the formerly $300 billion sector. Though just 2% ($6 billion) of the sector has had problems, ARS were already reeling from an accounting decision to classify them as non-cash holdings. Today's Wall Street Journal article "Credit Woes Hit in Unlikley Places" says, "Bristol-Myers, which has traded auction-rate securities for nine years, is hardly alone. CFO Andrew Bonfield says his auditors, Deloitte & Touche, tell him they have around 70 clients who are dealing with issues like this." Other companies, like 3M and USAir, have taken smaller, similar charges. The demise of ARS is one reason for recent massive inflows into money market funds." (Note: Money market funds never invested in auction-rate securities; these were sold as higher-yielding money fund alternatives.) We also wrote a little over 10 years ago, in mid January 2008, the news brief, "Tax Exempt Money Funds Sheltered From Ambac, MBIA Downgrades," which discussed another chapter of the 2007-8 crisis -- the collapse of the municipal bond insurers. It said, "Concerns have escalated in the municipal bond market over the possible downgrade of bond insurers Ambac and MBIA, which, until recently insured as much as half of all municipal debt issuance."

Reuters writes "Ant Financial's money market fund imposes temporary caps for Lunar New Year," which says, "Ant Financial's money market fund will place a temporary daily cap on subscription volumes ahead of an expected surge in inflows during the Chinese Lunar New Year, as calls grow for tighter regulations of these funds to prevent systemic risks. The restrictions by Yu'e Bao - the world's largest money market fund - will be in place from Feb. 1 through Mar. 15, Ant Financial said in a statement, adding that the caps would be "dynamically managed according to the volume of subscriptions and redemptions and other market conditions." Ant Financial said the caps were "voluntarily announced" by Tianhong Asset Management Co., Ltd., which manages the fund." The brief adds, "In December, Ant Financial imposed a cap on the daily amount users can invest at 20,000 yuan ($3,176.62). Earlier in the year, it had set a total investment cap of 250,000 yuan per person for the fund. Ant Financial is the payment affiliate of Alibaba Group Holding Ltd. Established in 2013, Yu'e Bao is integrated with Ant Financial's payment app Alipay. The latest restrictions come as members of the National Institution for Finance and Development (NIFD) called for tighter regulation of money market funds in a commentary published Thursday."

As a reminder, please register soon for the second annual Crane's Bond Fund Symposium conference, which will be held March 22-23, 2018 at the InterContinental Los Angeles Downtown. Our first event last year in Boston attracted 150 bond fund managers, marketers, fixed-income issuers, investors and service providers, and we expect our LA show to be even bigger. See the latest agenda here and more details here. Our Bond Fund Symposium offers a concentrated and affordable educational experience, as well as an excellent and informal networking venue. Registration for Bond Fund Symposium is $750; 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 an affordable price to bond fund professionals and investors. A block of rooms has been reserved at the Intercontinental Los Angeles (please make reservations soon). We'd like to thank our 2018 sponsors to date -- Dechert, Fitch Ratings, Wells Fargo Securities, Fidelity Investments, Investortools, J.P. Morgan Asset Management, Wells Fargo Funds, S&P Global Ratings, INTL FCStone, Bank of America Merrill Lynch, Goldman Sachs, PIMCO, Invesco and Payden & Rygel, -- for their support, and we're still accepting sponsors for our 2018 show. Also, mark your calendars for our "big show," Money Fund Symposium, which will be held June 25-27, 2018, at the Westin Convention Center in Pittsburgh, Pa. See preliminary agenda at www.moneyfundsymposium.com. Finally, we have also set the dates and location for our next European Money Fund Symposium, which is scheduled for Sept. 20-21, 2018, in London, England. Watch for more details in early 2018, and we hope to see you in LA, Pittsburgh or London in 2018!

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