Money Fund Intelligence

Money Fund Intelligence Sample

Money Fund Intelligence is a must-read for money market mutual fund and cash investment professionals. The monthly PDF contains:

  • Money Market News - Coverage of cash happenings, new products, companies in the news, people, and more.
  • Feature Articles - Stories like "Trading Portals", "Enhanced Cash", and "Brokerages Push Banks".
  • Money Fund Profiles - In-depth interviews with portfolio managers and management teams.
  • Fund Performance/Rankings - Full listings of fund 7-day yields, monthly and longer-term returns (1-, 3-, 5-, and 10-year), assets, expense ratios, and more.
  • Crane Money Fund Indexes - Our benchmark money market averages by fund type, plus Brokerage Sweep and Bank Indexes.

Whether you're comparing a fund to the competition, benchmarking your cash portfolio to the market, looking for an investment, or looking for new product ideas, Money Fund Intelligence is the answer. E-mail us for the latest issue!

Latest Contents (July 1, 2021)

FSOC, FSB Comments Set Stage for SEC 1
Asian MF Symposium; JPMAM's Shevlin 1
Worldwide MF Assets Jump Led by US 1
Money Mkt News, Benchmarks 1
Brokerage Sweep & Bank Saving 8
People, Calendar, Subscription 8
Top Performing Tables, Indexes 9-12
Fund Performance Listings 13-26

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Money Fund Intelligence News

Jul 26
 

With less than 2 months to go, we're ramping up preparations for our Money Fund Symposium, which will take place Sept. 21-23, 2021, at The Loews Philadelphia. While we're watching the bump up in "delta" variant coronavirus cases closely, we don't think this will be a threat to the event or attendees and we expect the show to go on. We believe the vast majority of our attendees are vaccinated, and we'll adhere to whatever health policies the hotel and city have in place at the time. (The hotel is currently requiring masks in the lobby, but not in the session and exhibit rooms. There are no restrictions on size or events in Pennsylvania currently.) We review the latest agenda and details below, and of course we'll adjust plans if necessary. (We'll also give refunds or credits for cancels at any time.)

Crane's Money Fund Symposium, the largest gathering of money market fund managers and cash investors in the world, is scheduled to take place September 21-23, 2021 at The Loews Hotel, in Philadelphia, Pa. The latest agenda is available and registrations are being taken. (We'll be tweaking the agenda in coming weeks.) Money Fund Symposium attracts money fund managers, marketers and servicers, cash investors, money market securities dealers, issuers, and regulators.

Our Money Fund Symposium Agenda kicks off on Tuesday, September 21, with a keynote on "Adapting to Regulations, Tech & ESG" from Tom Callahan of BlackRock and Deborah Cunningham of Federated Hermes. The rest of the Day 1 agenda includes: "Treasury Issuance & Repo Update," with Mark Cabana of Bank of America Securities, Joseph Abate of Barclays and Tom Katzenbach of the U.S. Treasury; a "Regulatory Scenarios & Fed Support Review" with Stephen Cohen of Dechert and Ken Anadu of Federal Reserve Bank of Boston; and, a "Major Money Fund Issues 2021" panel featuring, Tracy Hopkins of Dreyfus/BNY Mellon Cash Investment Strategies, Jeff Weaver of Wells Fargo Asset Management and Rob Sabatino of UBS Asset Management. (The evening's reception is sponsored by BofA.)

Day 2 of Money Fund Symposium 2021 begins with "The State of the Money Fund Industry," which features Peter Crane of Crane Data and Michael Morin of Fidelity Investments, followed by a "Senior Portfolio Manager Perspectives" panel, including Pia McCusker of SSGA, Nafis Smith of Vanguard, and Peter Yi of Northern Trust A.M. Next up is "Government & Treasury Money Fund Issues," with Adam Ackermann of J.P. Morgan A.M. and Geoff Gibbs of DWS. The morning concludes with a "Muni & Tax Exempt Money Fund Update," featuring Colleen Meehan of Dreyfus, John Vetter of Fidelity and Sean Saroya of J.P. Morgan Securities.

The Afternoon of Day 2 (after a Dreyfus-sponsored lunch) features the segments: "Dealer's Choice: Supply, New Securities & CP" with Robe Crowe of Citi Global Markets, John Kodweis of J.P. Morgan and Stewart Cutler of Barclays; "Ratings Focus: Governance, Global & LGIPs" with Robert Callagy of Moody's Investors Service, Greg Fayvilevich of Fitch Ratings, and Michael Masih of S&P Global Ratings; "Ultra-Short, ETFs & Alt-Cash Update," with Laurie Brignac of Invesco and Teresa Ho of JPM. The day's wrap-up presentation is "European, ESG & Corporate Issues" involving Jonathan Curry of HSBC Global A.M. and Tom Hunt of AFP. (The Day 2 reception is sponsored by Barclays.)

The third day of the Symposium features the sessions: "Strategists Speak '21: Fed & Rates, Repo & SOFR" with Priya Misra of TD Securities, Vanessa McMichael of Wells Fargo Securities and Alex Roever of J.P. Morgan Securities; "Brokerage Sweeps, Bank Deposits & Fin-Tech," with Chris Melin of Ameriprise Financial and Kevin Bannerton of Total Bank Solutions. The day concludes with an "FICC Repo & Agency Roundtable," featuring Robert Dolecki of FHLBanks Office of Finance, Travis Keltner of State Street and Matthew Peabody from BNY Mellon Markets; and a brief session on "Money Fund Statistics & Disclosures" run by Peter Crane.

Visit the MF Symposium website at www.moneyfundsymposium.com) for more details. Registration is $750, and discounted hotel reservations are available. Full refunds will be given for any cancels for any reason, and thanks to our sponsors for their support ... and patience! We hope you'll join us in Philadelphia in September! (The show will be recorded for those that can't make it.)

We'd like to encourage attendees, speakers and sponsors not to wait for the last minute to register and make hotel reservations, but we of course understand if you need to wait for travel restrictions to ease. Note that the agenda is still being finalized, so watch for tweaks in coming weeks. E-mail us at info@cranedata.com to request the full brochure.

Also, register for our virtual (and free) "European Money Fund Symposium, which is scheduled for Oct. 21, 2021, from `9:30am-12:00pm Eastern. (We cancelled our live European MFS in Paris, and have rescheduled this live event to Sept. 27-28, 2022.) Our virtual EMFS session will include a "Welcome to European MF Symposium" from Peter Crane; a "European MMF Update: Ireland, France, UK" with Vanessa Robert of Moody's, Alastair Sewell of Fitch Ratings and Andrew Paranthoiene of S&P Global Ratings; "Regulatory ESG & Ultra-Short Issues" with Patrick Rooney of Irish Funds, James Vincent of Goldman Sachs Asset Mgmt. and Rob Sabatino of UBS Asset Management; and "Senior Portfolio Manager Perspectives," with Deborah Cunningham of Federated Hermes, Joe McConnell of J.P. Morgan Asset Mgmt and Paul Mueller of Invesco.

Also, mark your calendars for our next Money Fund University which is scheduled for Jan. 20-21, 2022, in Boston, Mass and our next Bond Fund Symposium, which is scheduled for Mar. 28-29, 2022 in Newport Beach, California. Let us know if you'd like more details on any of our events, and we hope to see you in Philadelphia in September or in Boston or Newport Beach in 2022!

Jul 08
 

The July issue of our flagship Money Fund Intelligence newsletter, which was sent to subscribers Thursday morning, features the articles: "FSOC, FSB ESMA Comments Set Stage for SEC Reforms '21," which discusses pending money fund regulations; "Asian MF Symposium Recap; JPMAM's Shevlin on China," which reviews our recent Chinese MMF webinar; and, "Worldwide MF Assets Jump in Q1'21 Led by US, China," which highlights `ICI's latest global asset collection. We also sent out our MFI XLS spreadsheet Thursday a.m., and have updated our Money Fund Wisdom database query system with 6/30/21 data. (MFI, MFI XLS and our Crane Index products are all available to subscribers via our Content center.) Our July Money Fund Portfolio Holdings are scheduled to ship on Monday, July 12, and our July Bond Fund Intelligence is scheduled to go out Thursday, July 15.

MFI's lead article says, "Discussions are heating up over another round of money fund regulations, with an SEC reform proposal perhaps coming as soon as next month (or as late as early next year). Over the past month, the Treasury's Financial Stability Oversight Council met, the Financial Stability Board published a study on MMF reform options, and Europe's ESMA posted a slew of comment letters. (Watch for more coverage on the latter in coming days on www.cranedata.com.)"

It continues, "The FSOC addressed MMF reforms during its June meeting. Their statement explains, 'During the executive session, the Council heard an update from Securities and Exchange Commission (SEC) staff on money market fund reform, including a discussion of public comments received in response to reform options proposed by the President's Working Group on Financial Markets.... [T]he Council voted to approve a statement highlighting the importance of money market fund reform and supporting the SEC's engagement on this important issue.'"

Our latest profile reads, "Last month, we hosted our latest webinar, 'Asian Money Fund Symposium,' a 2-hour, 3-session event which featured J.P. Morgan Asset Management's Aidan Shevlin, Goldman Sachs A.M.'s Pat O'Callaghan, Fitch Ratings' Alastair Sewell, S&P Global's Andrew Paranthoiene and Crane Data's Peter Crane. The segments discussed money funds, money markets and investors in China, Japan and several other Eastern markets. We excerpt some of the highlights below. (See the recording here and the handouts here.)"

Shevlin tells us, "I work for J.P. Morgan Asset Management and am the Head of the International Liquidity Fund Management team.... I moved to Hong Kong to help set up our Global Liquidity business here [and] launch our funds in China. We also have money market funds in Taiwan, in Hong Kong, Singapore, Australia and other types of funds.... So, we've built quite a familiarity and expertise with money markets across the region."

He adds, "Asia is now becoming effectively too big for the world and for Western markets to ignore in terms of its share of global growth, its share of global trade, the amount of bonds outstanding.... It's just a massive economy now.... China is the second biggest bond market in the world.... They're increasingly being opened to Western investors ... giving investors a huge increase in the range of ... issuers they can buy. It gives them great diversification. Asian issuers typically offer at higher yields than their Western peers, while having a higher credit quality and an equivalent or lower duration.... It's a market which everyone is now looking at. Everyone wants to get involved in and be active there."

The "Worldwide" article tells readers, "ICI's 'Worldwide Regulated Open-Fund Assets and Flows, First Quarter 2021' release shows that money fund assets globally rose by $164.6 billion, or 2.0%, in Q1'21 to $8.479 trillion. The increase was driven by big jumps in U.S. and Chinese money market fund assets. But European assets plunged. MMF assets worldwide increased by $791.4 billion, or 10.3%, in the 12 months through 3/31/21, and MMFs in the U.S. now represent 53.0% of worldwide assets.'"

The piece continues, "According to Crane Data's analysis of ICI's 'Worldwide' fund data, the U.S. sustained its position as the largest money fund market in Q1'21 with $4.497 trillion, or 53.0% of all global MMF assets. U.S. MMF assets increased by $163.6 billion (3.8%) in Q1'21 and increased by $159.5 billion (3.7%) in the 12 months through March 31, 2021. China remained in second place among countries overall. China saw assets increase $156.4 billion (12.7%) in Q1, to $1.390 trillion (16.4% of worldwide assets). Over the 12 months through March 31, 2021, Chinese assets have risen by $230.5 billion, or 19.9%."

MFI also includes the News brief, "MMF Assets Drop Below $5.0 Trillion in June." It says, "Crane Data shows money funds falling by $73.0 billion in June to $4.991 trillion. YTD, assets are up $271.3 billion, or 5.7%. ICI's 'Money Market Fund Assets' shows MMFs down 4 weeks in a row to $4.53 trillion."

Another News brief, "MMF Expenses Hit Record Lows," tells readers, "Charged expense ratios fell to a new low of 0.​06% in May. (Our June 30 numbers will be posted tomorrow in the revised MFI XLS.) We estimate that annualized revenue for money funds has declined from $9.324 trillion on 5/31/20 to $2.125 trillion on 5/31/21."

Our July MFI XLS, with June 30 data, shows total assets decreased $73.0 billion to $4.991 trillion, after increasing $74.0 billion in May and $62.2 billion in April, and jumping $151.0 billion in March. Assets rose $30.8 billion in February and $5.6 billion in January. Assets decreased $6.7 billion in December, $11.7 billion in November, $46.8 billion in October, $121.2 billion in September, $42.3 billion in August and $44.2 billion in July. Our broad Crane Money Fund Average 7-Day Yield remained at record low 0.01%, and our Crane 100 Money Fund Index (the 100 largest taxable funds) remained flat at 0.02%.

On a Gross Yield Basis (7-Day) (before expenses are taken out), the Crane MFA and the Crane 100 both remained at 0.07%. Charged Expenses averaged 0.06% for the Crane MFA and 0.06% for the Crane 100. (We'll revise expenses tomorrow once we upload the SEC's Form N-MFP data for 6/30.) The average WAM (weighted average maturity) for the Crane MFA and Crane 100 was 38 (down one day from the previous month) and 38 days (same as last month), respectively. (See our Crane Index or craneindexes.xlsx history file for more on our averages.)

Jun 22
 

This month, MFI speaks with Christopher Tufts, the new Global Head of Portfolio Management and Trading for the money market fund business at J.P. Morgan Asset Management. Tufts had been Head of Portfolio Management for the U.S. funds before taking on an expanded role late last year. We discuss the current rate environment, supply and pending regulatory issues, among other things. Our Q&A follows. (Note: The following is reprinted from the June issue of Money Fund Intelligence, which was published on June 7. Contact us at info@cranedata.com to request the full issue or to subscribe.)

MFI: Give us a little history. Tufts: J.P. Morgan Asset Management has been managing money market funds since 1987, and as an institution, J.P. Morgan has been solving client liquidity needs for over 200 years. Today, we manage about $885 billion in short-term fixed income assets, of which roughly $735 billion sits in money market funds and liquidity separately managed accounts.... The money market fund offering has evolved and expanded significantly over time, and today is comprised of over 30 funds, managed in 8 different currencies across an array of on- and offshore vehicles, including our pioneering AAA-rated RMB offering in Asia.

The portfolio management team is distributed across the U.S., London and Hong Kong with an average of 22 years of experience. Without a doubt, I think that global reach and depth of experience throughout multiple rate cycles and stressed scenarios over the years helped us emerge from last year's volatility in a strong position across the platform.... I've been with J.P. Morgan my entire career, having started with the firm in the summer analyst program in 1995.

MFI: What is your biggest priority? Tufts: It may sound obvious, but the top priority for the portfolio management team never really changes -- we're focused first and foremost on the core deliverables that clients expect from us: prudent liquidity management and capital stability. We've learned over the years that discipline around our core investment philosophy and investment process is the best path to long-term success for our clients and our business. Having said that, the market and industry context that surrounds those objectives seems to be in constant motion.

Right now, we've really got our work cut out for us just getting cash invested every day at yields north of zero. And that holds true across locations and currencies, not just in the U.S. dollar money market funds. In some ways, the investment process becomes a bit more simplified in a zero-rate environment -- there are fewer decisions to be made. But in a market like this one, which is feeling the cumulative impact of so many different technical liquidity factors, the trading days can feel especially challenging. Our current focus from a portfolio management point of view is on matching increased client liquidity balances with investable supply that's being pressured in the opposite direction. We kept our Treasury and Government funds open for client subscriptions during the peak of the inflows last year, and doing the same going forward is really the key priority.

One example of how we're doing that is the work we've done around repo counterparties to ensure we have the deepest possible list of repo relationships and the most potential avenues for supply. We've been active in cleared repo, we've added trading capabilities with insurance companies, and we've leveraged broader bank relationships at J.P. Morgan to uncover new sources of collateral. In the prime funds, we work with a global team of dedicated credit research analysts to ensure that we're tapping into every issuer possible of high-quality, short term debt in the market across every global jurisdiction.

MFI: What about other challenges? Tufts: In many ways, today's most significant challenges are very familiar. This is not our first experience with managing liquidity funds in a zero-rate environment, or a negative-rate environment in the case of our European funds. Nor is it the first time we've been faced with potential changes to the product regulatory structure. I think what feels different and perhaps a bit more challenging from a market perspective this time is just the trend and outlook for technicals in the market. In the U.S., during the last run of near-zero rates, you had a pretty steady decline of money market fund balances -- roughly $1 trillion from 2009 to 2015. In contrast, you've seen industry assets move up about $1 trillion since March of last year.

The demand for high-quality short-term assets from the money market fund industry, particularly Treasury and Government funds, has been far outpacing available supply. We're also seeing lower market rates this cycle across the board.... So, the combination of robust fund flows, scant supply and low market rates are undoubtedly the biggest challenges.

MFI: What are you buying? Tufts: In USD Government and Treasury MMFs, where yield curves are particularity flat and supply challenges are particularly acute, we're leaning heavily on the overnight and 1-week repo markets. We've been less interested in buying U.S. Treasury and Agency paper further out the curve. We made those trades toward the end of last year and early this year, while we still had a bit of yield to work with. So the recent trades have favored repo, and more and more of that repo activity is being directed to the Fed's overnight Reverse Repo Program (RRP). You've seen the recent surge in the overall program balances. For now, the marginal new dollar coming in to our Government and Treasury repo funds will likely land with the Fed. We're also obviously using the regular T-Bill auctions to get invested … given the current zero floor at auctions.

In our prime funds, we've generally had a bit more to work with in terms of trading out the curve. But the CP and CD markets have not been immune to the effects of excess liquidity in the system and curves have flattened there as well, leading us to shorten our purchasing activity more recently. The challenge there has been finding banks that want to take new overnight and 1-week deposit balances. So, I think you'll see our prime funds start to lean more heavily on the Fed RRP as well in the coming weeks and months.

MFI: How about customer concerns? Tufts: In general, clients haven't been expressing any particular points of concern. I think the low-rate environment globally is frustrating for everyone, but as we discussed, that hasn't really slowed down the inflows thus far. Certainly, potential regulatory changes for prime funds, globally, is a topic of active discussion.... They're keen to understand the potential range of outcomes and also the timing.

We're seeing continued, significant interest in ultra-short bond funds, both U.S. dollar and non-dollar, and that's been a consistent theme with clients since central banks dropped rates globally last year.... We're talking through offerings in that space with clients and trying to understand their visibility and accuracy of cash flow projections to make sure that we pair them with the right product.... Our ultra-short Managed Reserves strategy, which is led by David Martucci and a team of seasoned, global portfolio managers, is sitting at all-time high of more than $100 billion.

MFI: What about ESG? Tufts: I think we've tried to take a very measured and deliberate approach around ESG. We started with integrating ESG factors into the investment process and reflecting those inputs in the prospectus and the other fund documentation. Really, it was just about calling out ESG factors more explicitly, since we're using those within our credit analysis process in terms of building approved issuer lists for the funds.... We've also done some more targeted ESG initiatives like our new Empowering Change program.

MFI: Are fee waivers hurting? Tufts: Fee waivers are just a fact of life in multiple currencies and funds at the moment. The low-rate environment impacts clients, intermediaries and obviously the economics of our business. We're fortunate that the platform at J.P. Morgan Asset Management is very broad and we operate at considerable scale.... The scale really gives us the ability to weather periods like this one.... In terms of fee competition, you've seen some outliers occasionally in terms of net yields and waiver levels, but in general, the pack is pretty tightly clustered. I wouldn't expect to see much deviation from here. Not until there's more of a curve to work with and we start to talk about Fed liftoff, which we think is still quite a ways off.

MFI: Tell us about the trading portal. Tufts: We made sure when we launched Morgan Money that it was based on state-of-the-art technology with all the features any client could ask for. [The portal] was developed to meet the needs of modern liquidity managers, powered by a trading and analytics platform that integrates seamlessly with a client's existing technology set.... We have over 1,800 clients on the platform today, that represents about $157 billion in AUM.... I think that speaks to the value proposition that clients are finding in the Morgan Money platform.

MFI: What's your outlook going forward? Tufts: Even at these very low levels of income, money funds continue to offer critical benefits that clients have always valued: same-day liquidity, diversification, professional management and credit analysis. So, we're seeing clients continue to pump money into this sector at a pretty good clip.

On the regulatory side, we do anticipate further regulatory changes coming down the pipeline for prime funds both onshore and offshore. But we’re still in the early stages of that process. Regulators did a lot after the financial crisis to make these funds more resilient to credit and liquidity shocks.... I think the good news is that regulators seem more or less intent on building on the work that they've already done, and they appear focused on adjusting the existing regulations to enhance the resilience of these funds in stressed markets rather than fundamentally changing the product structure altogether.

In terms of our stance on reform, you can read it in our comment letter to the SEC regarding the President's Working Group (PWG) report. We think the 30% weekly liquidity linkage to gates and fees created a 'bright line' for clients that sped up redemption activity last spring. We think the single most impactful change they could make would be to delink gates and fees from that 30% liquidity requirement which would substantially improve the resilience of prime and tax-free money funds in the future.

Beyond that, regulators are also evaluating the entire short-term fixed-income market for potential improvements. This is a positive for the sector overall and for the clients who rely on these products.... So, we'll march forward, and as they say: 'Liquidity rolls on.'

Jun 21
 

A release from the Investment Company Institute tells us that, "Retirement Assets Total $35.4 Trillion in First Quarter 2021." It includes data tables showing that money market funds held in retirement accounts fell to $557 billion (from $574 billion) in total, or 12% of the total $4.497 trillion in money funds. MMFs represent just 4.9% of the total $11.483 trillion of mutual funds in retirement accounts. The release says, "Total US retirement assets were $35.4 trillion as of March 31, 2021, up 1.8 percent from December 31, 2020. Retirement assets accounted for 32 percent of all household financial assets in the United States at the end of March 2021. Assets in individual retirement accounts (IRAs) totaled $12.6 trillion at the end of the first quarter of 2021, an increase of 2.8 percent from the end of the fourth quarter of 2020. Defined contribution (DC) plan assets were $9.9 trillion at the end of the first quarter, up 2.1 percent from December 31, 2020. Government defined benefit (DB) plans -- including federal, state, and local government plans—held $7.1 trillion in assets as of the end of March 2021, a 0.7 percent increase from the end of December 2020. Private-sector DB plans held $3.4 trillion in assets at the end of the first quarter of 2021, and annuity reserves outside of retirement accounts accounted for another $2.5 trillion." The ICI tables also show money funds accounting for $381 billion, or 7%, of the $5.647 trillion in IRA mutual fund assets and $176 billion, or 3%, of the $5.837 trillion in defined contribution plan holdings. (Money funds in 401k plans totaled $119 billion, or 3% of the $4.559 trillion of mutual funds in 401k's.)