Money Market News
Crane Data's latest monthly Money Fund Market Share rankings show assets increasing among most of the largest U.S. money fund complexes in November, after rising in October, September, August, July, June and May. Assets fell in March and April. Money market fund assets rose by $196.1 billion, or 2.9%, last month to a record $7.064 trillion. Total MMF assets have increased by $443.5 billion, or 6.7%, over the past 3 months, and they've increased by $777.2 billion, or 12.4%, over the past 12 months. The largest increases among the 25 largest managers last month were seen by BlackRock, JPMorgan, Vanguard, Morgan Stanley and Fidelity, which grew assets by $32.8 billion, $31.2B, $27.6B, $27.1B and $19.9B, respectively. Declines in November were seen by SSGA and HSBC, which decreased by $4.3 billion and $1.2B, 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, and look at money fund yields, which were lower in November.
The December issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Friday morning, features the articles: "Money Fund Assets Break Over $7.0 Trillion; Still Going," which reviews the continued jump in MMF assets; "Top 10 Stories of 2024: Asset Surge Continues, Yields Peak," which looks back at some of Crane Data's top stories of the year; and, "BlackRock Files for Money Market ETFs: Will They Fly?" which looks at the new ETF filing. We also sent out our MFI XLS spreadsheet Friday a.m., and we've updated our Money Fund Wisdom database with 11/30/24 data. Our Dec. Money Fund Portfolio Holdings are scheduled to ship on Tuesday, December 10, and our Dec. Bond Fund Intelligence is scheduled to go out on Friday, December 13. (Note: We're still taking registrations for our "basic training" event, Money Fund University, which is Dec. 19-20 in Providence, R.I.)
Federated Hermes' Money Market CIO Deborah Cunnigham writes, "Record high: Money market assets have reached a new mark," in her latest monthly commentary. She comments, "Records, as they say, are made to be broken. But some seem so out of reach we don't pay attention to them until they are nearly upon us.... That's the case with the record amount of money market fund assets under management reached in late November. That number? $7,000,000,000,000. Yes, the convention is to abbreviate it to $7 trillion, but spelling it out shows just how big that number is, and it's cause for celebration. The broader liquidity market (including products denominated in euros and pounds, pooled investments, private funds, and other forms) is also at an all-time high. In its conference in Pittsburgh last summer, Crane Data also wedded sports and money markets with a version of the Steelers terrible towel that touted how close the industry was to $7 trillion in assets. We might soon need a new one to wave."
Dramatic asset growth was again the biggest story of the year, as money market fund assets jumped by $800 billion to a record $7.1 trillion (after jumping by over $1.0 trillion last year). With still almost a month to go, money fund asset growth could approach $1.0 trillion by yearend. In 2023, rising yields were the big news. Though yields have begun declining, and are now below 4.5%, yields remained above 5% for most of the past year. So great yields were another theme of 2024. Other major headlines of 2024 included: the implementation (and minor impact) of the SEC's latest Money Fund Reforms, the birth of tokenized money market funds (and money fund ETFs), the continued growth of Social (and shrinkage of ESG) MMFs and the increase in assets and now decline in yields in European and other worldwide markets. Below, we excerpt from a number of our biggest and most representative news stories of 2024 to highlight the major trends of the past year. (Note: As a reminder, register ASAP for our Money Fund University, Dec. 19-20 in Providence, at the Renaissance Providence Downtown. Clients and friends are also welcome to stop by Crane Data's Holiday Cocktail Party at MFU on 12/19 from 5-7:30pm!)
Money fund yields declined by 1 basis point to 4.44% on average during the week ended Friday, Nov. 29 (as measured by our Crane 100 Money Fund Index), after falling 3 bps the week prior and 9 bps two weeks prior. Yields are now reflecting most of the Federal Reserve's 25 basis point cut on November 7, but they may continue inching lower this week and next. They've declined by 62 bps since the Fed cut its Fed funds target rate by 50 bps percent on Sept. 18 and they've declined by 19 bps since the Fed cut rates by 1/4 point on 11/7. Yields were 4.65% on average on 10/31, 4.75% on 9/30, 5.10% on 8/31, 5.13% on 7/31 and 6/28, 5.14% on 5/31, 5.13% on 4/30, 5.14% on 3/31 and 2/29/24, 5.17% on 1/31/24, and 5.20% on 12/31/23.
J.P. Morgan published "Short-Term Fixed Income 2025 Outlook" last week, which explains, "Cash continued to flood into MMFs as investors sought refuge in this asset class while earning 5% yields. More importantly, an inverted yield curve and low bank deposit yields made MMFs a very attractive liquidity investment. The inflows continued even as the Fed cut rates, pushing AUMs to a record $7tn, underscoring the abundance of liquidity in the system, most of which seemed to be sitting in the front end. To that end, money market spreads traded largely in a narrow range, even in the face of MMF reform." (Note: We're still taking registrations for our "basic training" event, Money Fund University, which will be held Dec. 19-20, 2024 in Providence, R.I. Please join us too for Crane Data's Holiday Party on Thursday, Dec. 19 at the Renaissance Providence from 5-7pm!)
ICI's latest "Money Market Fund Assets" report shows money funds rebounding $26.8 billion to a record $6.675 trillion in the latest week, after falling $22.2 billion the previous week. Money fund sssets have risen in 13 of the last 17, and 24 of the last 32, weeks, increasing by $371.7 billion (or 5.9%) since the Fed cut on 9/18 and increasing by $697.7 billion (or 11.7%) since April 24. MMF assets are up by $789 billion, or 16.7%, year-to-date in 2024 (through 11/26/24), with Institutional MMFs up $407 billion, or 13.3% and Retail MMFs up $382 billion, or 22.8%. Over the past 52 weeks, money funds have risen by $839 billion, or 14.4%, with Retail MMFs up by $426 billion (19.0%) and Inst MMFs rising by $413 billion (11.5%). (Note: We're still taking registrations for our "basic training" event, Money Fund University, which will be held Dec. 19-20, 2024 in Providence, R.I. Happy Thanksgiving, and see you in Providence in 3 weeks!)
The Securities and Exchange Commission published its latest monthly "Money Market Fund Statistics" summary for October, which shows that total money fund assets rose by $93.3 billion in October to a record $6.927 trillion, after jumping $166.6 billion the month prior. The SEC shows Prime MMFs increasing $16.4 billion in October to $1.174 trillion, Govt & Treasury funds increasing $73.2 billion to $5.616 trillion and Tax Exempt funds increasing $3.7 billion to $137.9 billion. Taxable yields fell in October after plunging in September. 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. (For the month of November, through 11/25, total money fund assets increased by $146.5 billion to $7.009 trillion, according to Crane Data's separate, and slightly smaller, MFI Daily series.)
Crane Data is making plans and preparing the agenda for our eighth annual ultra-short bond fund event, Bond Fund Symposium, which will take place March 27-28, 2025 at the Hyatt Regency in Newport Beach, Calif. Crane's Bond Fund Symposium offers a concentrated and affordable educational experience, as well as an excellent networking venue, for bond fund and fixed-income professionals. Registrations are now being accepted ($1,000) and sponsorship opportunities are available. We review the preliminary agenda and details below, and we also give the latest update on our upcoming "basic training" show, Money Fund University, which will be held next month in Providence, Dec. 19-20. (We'll also be hosting our Crane Data Holiday Party alongside MFU, so please join us Thursday, Dec. 19 from 5:00-7:30pm at the Renaissance Hotel in Providence.)
Reuters tells us that, "America's $7 trillion cash stash isn't going anywhere." They write, "A record-high $7 trillion of cash is currently sitting 'on the sidelines' in money market funds (MMFs). Anyone hoping to see a significant chunk of this flooding the wider investment field in the coming months may be disappointed. Many strategists assume this massive pile of cash will start to shrink now that the Federal Reserve is cutting interest rates as investors seek a more profitable home for their capital in the face of diminishing cash yields.... Not so fast." (Note: Please register soon for Money Fund University, which will be held Dec. 19-20, 2024 in Providence, R.I. Happy Thanksgiving, and hope to see you in Providence in 3 weeks!)
The U.S. Treasury's Office of Financial Research (OFR) published its "2024 Annual Report" earlier this week, and the update contains a number of mentions of repo, money funds and stablecoins. (See the press release here.) The report says on "Treasuries," "Risk arises from the basis trade because the profit on individual transactions is usually small, and investors often use leverage to achieve large positions. Most often, this is done by funding Treasury purchases in repurchase agreement, or repo, markets. A repo is a contract in which a market participant sells an asset with an agreement to buy it back. Repos require posting extra collateral if the price of the Treasury drops. If collateral requirements rise and the trade, including the cost of leverage, becomes unprofitable, or if repo funding dries up, the investor may unwind the trade by selling the Treasury and buying an offsetting future. This happened en masse in March 2020, adding to market stress."
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 lower in the latest reported quarter (Q1'24) at $331 billion (down from $352 billion in Q4'23 but up from $313 billion in Q1'23). 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 ASAP for our upcoming Money Fund University, which will be held Dec. 19-20, 2024 in Providence, R.I. See you in Providence in 4 weeks!)
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