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Aviva Investors, hosted a webinar in association with the U.K.-based ACT, or Association of Corporate Treasurers earlier this week, which discussed the "Current rate environment and the implications of monetary policy on money market fund yields." The outlook is not good, and the possibility of negative rates in Sterling and perhaps even USD, is very real, according to Aviva's Anthony Callcott and Caroline Hedges. Aviva manages one of the largest European Sterling MMFs, but it also offers "offshore" Euro and USD funds. (Note that these aren't available to U.S. investors.) We excerpt from their comments below.

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The Financial Times weighed in on recent money fund news in its piece, "Asset managers overhaul money market funds after March rout." They write, "Some of the world's largest asset managers are shutting down US investment vehicles that have suffered rapid outflows in times of stress, threatening an important source of short-term funding for companies across America. Vanguard followed peers Fidelity and Northern Trust last month when it announced the closure of its 'prime' money market fund.... The manager's move to convert its prime fund to one buying government bonds by the end of September will pull $125bn from the remaining $750bn invested in the prime segment.... Some analysts are now braced for a regulatory clampdown on the sector."

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Crane Data's latest MFI International shows that assets in European or "offshore" money market mutual funds were flat to lower over the past month after hitting a record $1.056 trillion in August. They broke above the $1.0 trillion for the first time ever three months ago. These U.S.-style funds, domiciled in Ireland or Luxemburg and denominated in US Dollars, Pound Sterling and Euros, increased by $149 million over the last 30 days (when translated into dollars); they're up by $172.2 billion (19.6%) year-to-date. Offshore US Dollar money funds, which broke over $500 billion in January, are down $3.0 billion over the last 30 days but up $64.1 billion YTD to $558.5 billion. Euro funds are up E1.2 billion over the past month, and YTD they're up E34.2 billion to E132.8 billion. GBP money funds have fallen by L7.2 billion over 30 days, but are up by L28.3 billion YTD to L253.3B. U.S. Dollar (USD) money funds (192) account for over half (53.3%) of the "European" money fund total, while Euro (EUR) money funds (94) make up 14.0% and Pound Sterling (GBP) funds (122) total 29.3%. We summarize our latest "offshore" money fund statistics and our Money Fund Intelligence International Portfolio Holdings (which went out to subscribers Tuesday), below.

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The September issue of our Bond Fund Intelligence, which was sent to subscribers Tuesday morning, features the lead story, "Ultra-Shorts Brace for Flood as Second Zero Yield Era Dawns," which examines the growth of ultra-shorts as zero yields add to their already explosive growth, and "William Blair's Ruta Ziverte Talks Bonds, Low Duration," which interviews the Chicago firm's head of fixed income. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund yields and returns were mixed in August. We excerpt from the new issue below. (Contact us if you'd like to see our Bond Fund Intelligence and BFI XLS spreadsheet, or our Bond Fund Portfolio Holdings data, and register to attend next week's Crane's Bond Fund Webinar: Ultra-Shorts and Alt-Cash, which is Sept. 24 from 1-2pmET.)

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The mainstream press has again taken note of events in the money market space, this time writing about fears over exits in the Prime MMF sector. The Wall Street Journal writes, "Shrinking Money-Market Funds Threaten Global Dollar Supply and Bloomberg writes, "Money-Market Fund Woe Becomes a Headache for Borrowers." The Journal's piece explains, "After the money-market panic in March, assets in the prime funds, which invest in short-term corporate debt, rocketed back up in April and May. They are now sliding once again, posing a threat to non-U.S. banks that rely on them. According to data from the Investment Company Institute, the assets of prime money-market funds ran to $741.62 billion on Wednesday, down $24 billion from its rebound level in late June and down sharply from its 2020 peak of about $810 billion in mid-February."

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Crane Data released its September Money Fund Portfolio Holdings Thursday, and our most recent collection, with data as of August 31, 2020, shows an increase in Repo and Treasuries and drops in CP and Government Agency Debt last month. Money market securities held by Taxable U.S. money funds (tracked by Crane Data) decreased by $12.7 billion to $4.867 trillion last month, after decreasing $83.1 billion in July and $159.1 billion in June, and increasing $31.6 billion in May, and a staggering $529.4 billion in April and $725.6 billion in March. Treasury securities remained the largest portfolio segment, followed by Repo, then Agencies. CP remained fourth, ahead of CDs, Other/Time Deposits and VRDNs. Below, we review our latest Money Fund Portfolio Holdings statistics. (Visit our Content center to download the latest files, or contact us to see our latest Portfolio Holdings reports.)

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Crane Data's latest monthly Money Fund Portfolio Holdings statistics will be sent out Thursday, and we'll be writing our normal monthly update on the August 31 data for Friday's News. But we also published a separate and broader Portfolio Holdings data set based on the SEC's Form N-MFP filings on Wednesday. (We continue to merge the two series, and the N-MFP version is now available via Holding file listings to Money Fund Wisdom subscribers.) Our new N-MFP summary, with data as of August 31, 2020, includes holdings information from 1,071 money funds (down 5 from last month), representing assets of $5.043 trillion (down $17 billion). We review the new N-MFP data below.

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Crane Data's latest Money Fund Market Share rankings show assets were down for most of the largest U.S. money fund complexes in August. Money market fund assets decreased $39.2 billion, or -0.8%, last month to $4.924 trillion. Assets have fallen by $227.7 billion, or -4.4%, over the past 3 months, but they've increased by $1.138 trillion, or 30.0%, over the past 12 months through August 31, 2020. The largest increases among the 25 largest managers last month were seen by First American, Wells Fargo, Fidelity, BlackRock and HSBC, which grew assets by $9.4 billion, $9.3B, $9.0B, $6.1B and $4.8B, respectively. The largest declines in assets in August were seen by Goldman Sachs, SSGA, Schwab, Dreyfus/BNY Mellon and JP Morgan, which decreased by $50.1 billion, $15.6B, $5.6B, $4.4B and $2.4B, respectively. Our domestic U.S. "Family" rankings are available in our MFI XLS product, our global rankings are available in our MFI International product. The combined "Family & Global Rankings" are available to Money Fund Wisdom subscribers. We review the latest market share totals below, and we also look at money fund yields in August.

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The September issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Tuesday morning, features the articles: "Vanguard Retreats from Prime; Going Govie Again," which reviews the most recent exit from the Prime space; "Major Issues Highlight of Crane's Mini Fund Symposium," which quotes from our latest webinar; and, "Federated Joins Social MMF Movement; Update on ESG," which discusses recent developments in the "Impact" MMF space. We've also updated our Money Fund Wisdom database with August 31 statistics, and sent our MFI XLS spreadsheet Tuesday a.m. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our September Money Fund Portfolio Holdings are scheduled to ship on Thursday, September 10, and our September Bond Fund Intelligence is scheduled to go out Tuesday, September 15.

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Money market fund assets fell for the fourth week in a row, their 12th decrease over the past 15 weeks, breaking below the $4.5 trillion level for the first time since April 15. ICI's latest weekly "Money Market Fund Assets" report says, "Total money market fund assets decreased by $45.22 billion to $4.49 trillion for the week ended Wednesday, September 2, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $38.87 billion and prime funds decreased by $4.24 billion. Tax-exempt money market funds decreased by $2.11 billion." ICI's stats show Institutional MMFs decreasing $39.1 billion and Retail MMFs decreasing $6.1 billion. Total Government MMF assets, including Treasury funds, were $3.628 trillion (80.7% of all money funds), while Total Prime MMFs were $747.4 billion (16.6%). Tax Exempt MMFs totaled $118.9 billion (2.6%).

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Moody's Investors Service published a brief entitled, "Vanguard will convert its prime fund, the industry's largest, to a government fund, a credit positive." They comment, "On 27 August, Vanguard Group announced that it will convert its $125.3 billion Prime Money Market Fund into a government fund, a credit positive for the asset management sector because one of its bellwether funds will no longer bear the credit and liquidity risks inherent in the prime money market fund product. The fund, the industry's largest prime fund, holds 3% of US money market fund (MMF) industry assets under management (AUM).... Designated a retail fund, it manages 29% of all prime retail AUM. The changeover should be completed in late September, at which time the fund will be renamed the Cash Reserves Federal Money Market Fund." (See also our August 28 Crane Data News, "Vanguard Prime Money Market Fund Going Government.")

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We wrote on Monday about our recent "Crane's Money Fund Webinar: Mini Fund Symposium," a 3-hour series of sessions including segments on "`The State of the Money Fund Industry," "Strategists Speak: Treasury, Fed & Repo;" "Regulatory & ESG Money Funds Update;" and, "Major Money Fund Issues 2020." (See our News, "Hopkins, Lontai, Tobin Talk Major MF Issues: ESG MFs, Sticking w/‚ÄčPrime.") Today, we quote from the Regulatory & ESG session, which featured Dechert LLP's Stephen Cohen. (The full recording is available here and materials are available via our "Webinar Download Center," and mark your calendars for our future online events: "Crane's Bond Fund Webinar: Ultra-Shorts & Alt-Cash" on Sept. 24 from 1-2pmET, where Crane Data's Peter Crane and a panel of ultra-short bond fund managers will give a brief update on the space; "Crane's Money Fund Symposium Online" on Oct. 27 from 1-4:30pmET, which will feature another afternoon of money fund discussions; and, "European Money Fund Symposium Online" on Nov. 19 from 10am-12pmET.)

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