Money Market News
The U.S. Securities & Exchange Commission's Division of Economic and Risk Analysis (DERA) published a study titled, "Influences on Money Market Fund Price Variations During the March 2020 Market Dislocation," which states in its Abstract, "This white paper examines weekly fluctuations in money market fund ('MMF') market prices surrounding the March 2020 market dislocation, which resulted from the economic disruptions caused by the COVID 19 pandemic.... The analysis in this white paper identifies key factors influencing these price variations, including interest rates, redemptions, portfolio construction, and liquidity. This white paper aims to inform the Commission, investors, and other interested parties with insights into broader trends within the money market fund industry."
The Investment Company Institute released its "2025 Investment Company Fact Book," an annual compilation of statistics and commentary on the mutual fund space. Subtitled, "A Review of Trends and Activities in the Investment Company Industry," the latest edition tells us, "With stock markets rising across the globe in 2024 (24% in the United States and 10% in the Asia-Pacific region) worldwide total net assets of equity funds, which invest primarily in publicly traded stocks, increased by 12% to $35.7 trillion at year-end 2024. Bond funds -- which invest primarily in fixed-income securities -- saw their total net assets increase 7% over the same period, somewhat reflecting total returns (capital gains and interest income) on bonds in Europe and the Asia-Pacific region of 3% and 7%, respectively. Net assets of money market funds, which are regulated funds restricted to holding short-term, high-quality debt instruments, also increased substantially." We excerpt from the latest "Fact Book" below. (See too Tuesday's Link, "2025 Investment Company Fact Book," which quotes from ICI's press release.)
ICI published its latest monthly "Trends in Mutual Fund Investing" for March 2025 and its monthly "Month-End Portfolio Holdings of Taxable Money Funds" Tuesday. ICI's monthly Trends shows money fund totals declining $10.9 billion, or -0.2%, in March to $6.975 trillion. MMFs have increased by $991.1 billion, or 16.6%, over the past 12 months (through 3/31/25). Money funds' March asset decrease follows an increase of $99.0 billion in February, $31.9 billion in January and $139.3 billion in December. They rose $171.5 billion in November, $117.4 billion in October and $158.6 billion in September. Bond fund assets decreased $33.3 billion to $5.170 trillion, and bond ETF assets increased to $1.89 trillion in March 2025.
The Federal Reserve Bank of New York published, "Stablecoins and Crypto Shocks: An Update" in a recent Liberty Street Economics blog. It states, "Stablecoins are crypto assets whose value is pegged to that of a fiat currency, usually the U.S. dollar. In our first Liberty Street Economics post, we described the rapid growth of stablecoins, the different types of stablecoin arrangements, and the May 2022 run on TerraUSD, the fourth largest stablecoin at the time. In a subsequent post, we estimated the impact of large declines in the price of bitcoin on cumulative net flows into stablecoins and showed the existence of flight-to-safety dynamics similar to those observed in money market mutual funds during periods of stress. In this post, we document the growth of stablecoins since 2019, including the evolution of the reported collateral backing major stablecoins. Then, we estimate the impact on the stablecoin industry of large bitcoin price increases that occurred between 2021 and 2025."
Federated Hermes reported Q1'25 earnings and hosted its Q1'25 earnings call on Friday. On the call, President & CEO J. Christopher Donahue, comments, "We ended Q1 with record assets under management of $840 billion, driven by record money market assets of $637 billion.... Turning to fixed income, assets increased by about $1.4 billion in the first quarter from year-end due mainly to higher market valuations, partially offset by net redemptions. We had 19 fixed-income funds with net sales in the first quarter, including government Ultrashort Fund and the municipal Ultrashort Fund.... Fixed income expected net additions total about $400 million, and the wins are in sustainable investment-grade credit, active cash short-duration, and government bonds."
ICI published its latest weekly "Money Market Fund Assets" report, Thursday. The weekly series shows money fund assets rising $31.7 billion to $6.913 trillion, after falling $125.4 billion the week prior and falling $25.4 billion two weeks ago. Massive (presumably) tax-related outflows make last week the largest weekly outflow in history. But money fund assets have still risen in 25 of the last 38, and 36 of the last 53 weeks, increasing by $609.0 billion (or 9.7%) since the Fed cut on 9/18/24 and increasing by $935.1 billion (or 15.6%) since 4/24/24. MMF assets are up by $935 billion, or 15.6%, in the past 52 weeks (through 4/23/25), with Institutional MMFs up $482 billion, or 13.5% and Retail MMFs up $453 billion, or 18.9%. Year-to-date, MMF assets are up by $62 billion, or 0.9%, with Institutional MMFs down $57 billion, or -1.4% and Retail MMFs up $119 billion, or 4.3%.
The SEC published its latest quarterly "Private Funds Statistics" report recently, which summarizes Form PF reporting and includes some data on "Liquidity Funds," or pools which are similar to but not money market funds. The publication shows overall Liquidity fund assets were higher in the latest reported quarter (Q3'24) at $368 billion (up from $342 billion in Q2'24 and up from $346 billion in Q3'23). We also again briefly review the part of the SEC's MMF Reforms which addresses "Amendments to Form PF Reporting Requirements for Large Liquidity Fund Advisers" and which went into effect over the summer, below. (Note: Register soon for our big Money Fund Symposium show, which will be held in 2 months, June 23-25, 2025 in Boston, Mass.!)
Moody's Ratings recently published a report titled, "Money market fund sector faces wave of tech-driven innovation," which tells us, "A new generation of technology-driven products looks set to shake up the conservative money market fund (MMF) sector. Exchange traded and tokenized MMFs, most of which have entered the market since late 2024, offer greater flexibility, transparency and lower costs than traditional MMFs. They will increase competitive pressure on incumbents, but may also attract significant numbers of new investors to the asset class. Traditional MMFs are low-risk funds that issue redeemable shares to investors, and invest in short term, high quality assets. Their key advantages are that they typically offer stable net asset value (NAV) per share and are highly liquid, allowing investors to redeem their money at short notice. This feature also allows them to serve as a cash management tool for large companies."
Charles Schwab reported Q1'25 earnings and hosted its "2025 Spring Business Update" last week (see the transcript here). CFO Mike Verdeschi tells us, "We saw solid growth across all fronts during the first quarter as we continued to meet the evolving needs of our growing client base. New account formation was approximately 1.2 million during the period, our highest total in several years.... This combination of organic growth and increased client utilization of our leading products and solutions resulted in year-over-year revenue and adjusted earnings growth of 18% and 41% respectively. Transactional cash levels continue to reflect normalized cash behaviors inclusive of organic growth, seasonality and investor sentiment. And we made additional progress on reducing the level of bank supplemental funding to approximately $38 billion, down more than 60% from peak levels."
ICI's latest "Money Market Fund Assets" report shows money fund assets falling $125.4 billion to $6.881 trillion, after falling $25.4 billion the week prior but rising $17.6 billion two weeks ago (to a record on 4/2). Massive (presumably) tax-related outflows make this the largest weekly outflow in history. But money fund assets have still risen in 24 of the last 37, and 35 of the last 52 weeks, increasing by $577.3 billion (or 9.2%) since the Fed cut on 9/18/24 and increasing by $903.4 billion (or 15.1%) since 4/24/24. MMF assets are up by $913 billion, or 15.3%, in the past 52 weeks (through 4/16/25), with Institutional MMFs up $465 billion, or 13.0% and Retail MMFs up $447 billion, or 18.6%. Year-to-date, MMF assets are up by $30 billion, or 0.4%, with Institutional MMFs down $82 billion, or -2.0% and Retail MMFs up $113 billion, or 4.1%.
The U.S. Securities and Exchange Commission published its latest monthly "Money Market Fund Statistics" summary, which shows that total money fund assets rose by $2.8 billion in March 2025 to a record $7.391 trillion. The SEC shows Prime MMFs increased $22.1 billion in March to $1.256 trillion, Govt & Treasury funds decreased $21.8 billion to $5.993 trillion and Tax Exempt funds increased $2.4 billion to $141.7 billion. Taxable yields continued to decline in March after previous decreases in February and 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. (Our MFI XLS monthly shows money fund assets rising $2.3 billion in March 2025 to a record $7.333 trillion. In April month-to-date through 4/14, total money fund assets have decreased by $58.8 billion to $7.265 trillion, according to Crane Data's separate, and slightly smaller, MFI Daily series.)
A filing for Ramirez Government Money Market Fund (Retail Class, RMZXX and Institutional Class, RAMXX), states, "The Board of Trustees of Advisor Managed Portfolios, upon a recommendation from Ramirez Asset Management, Inc., the investment adviser to the Fund, has determined to close and liquidate the Fund immediately after the close of business on April 29, 2025. This decision was made due to the Fund's inability to obtain a level of assets necessary for it to be viable. Effective immediately, the Fund will no longer accept purchases of new shares. The Fund is closed to new purchases, whether from existing or new investors. The Fund will no longer pursue its stated investment objective and Fund assets will be managed to provide for sufficient liquidity prior to liquidation. On or promptly after the Liquidation Date, the Fund will make a liquidating distribution to its remaining shareholders equal to each shareholder's proportionate interest in the net assets of the Fund, in complete redemption and cancellation of the Fund's shares held by the shareholder, and the Fund will be dissolved."
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