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Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of June 18, 2021) includes Holdings information from 72 money funds (up 2 funds from a week ago), which represent $2.594 trillion (up from $2.411 trillion) of the $4.947 trillion (52.4%) in total money fund assets tracked by Crane Data. (Our Weekly MFPH are e-mail only and aren't available on the website. For our latest monthly MF Portfolio Holdings recap, see our June 11 News, "June MF Portfolio Holdings: Repo Skyrockets Led by RRP; T-​Bills Plunge.") Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Treasury totaling $1.287 trillion (up from $1.241 trillion a week ago), or 49.6%, Repurchase Agreements (Repo) totaling $884.2 billion (up from $763.1 billion a week ago), or 34.1% and Government Agency securities totaling $233.8 billion (up from $206.8 billion), or 9.0%. Commercial Paper (CP) totaled $64.7 billion (down from $65.8 billion), or 2.5%. Certificates of Deposit (CDs) totaled $47.4 billion (down from $49.2 billion), or 1.8%. The Other category accounted for $51.7 billion or 2.0%, while VRDNs accounted for $25.7 billion, or 1.0%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.287 trillion (49.6% of total holdings), Federal Reserve Bank of New York with $339.3B (13.1%), Federal Home Loan Bank with $111.0B (4.3%), BNP Paribas with $64.1B (2.5%), Fixed Income Clearing Corp with $56.7B (2.2%), Federal Farm Credit Bank with $49.0B (1.9%), RBC with $48.4B (1.9%), JP Morgan with $45.2B (1.7%), Federal National Mortgage Association with $43.8B (1.7%) and Mitsubishi UFJ Financial Group Inc with $29.2B (1.1%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($239.2 billion), Goldman Sachs FS Govt ($213.1B), BlackRock Lq FedFund ($180.5B), Wells Fargo Govt MM ($151.4B), Morgan Stanley Inst Liq Govt ($139.5B), BlackRock Lq T-Fund ($128.5B), Fidelity Inv MM: Govt Port ($127.7B), BlackRock Lq Treas Tr ($112.1B), Goldman Sachs FS Treas Instruments ($102.3B) and, Dreyfus Govt Cash Mgmt ($101.8B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary, or our Bond Fund Portfolio Holdings data series.)

While Crane Data is thrilled to resume live events this fall with our big show, Crane's Money Fund Symposium, scheduled for Sept. 21-23, 2021, at The Loews Hotel, in Philadelphia, Pa, we're cancelling our European Money Fund Symposium in Paris, France. European MFS, which covers money funds domiciled in Ireland, Luxembourg, France and "offshore," had been scheduled for Oct. 21-22, 2021. But instead we'll be hosting a slimmed down (and free) virtual European Money Fund Symposium Online on Oct. 21, 2021. Our Paris European Money Fund Symposium has been rescheduled to Sept. 27-28, 2022. Watch for more details in coming months, and sorry we couldn't make this year's live event in Europe work. But our live Philly show in September is moving forward 3 months from today. The latest Money Fund Symposium agenda is available and registrations are being taken. Registration is $750, and discounted hotel reservations are available. Visit the MF Symposium website for more details. We hope you'll join us in person in Philadelphia! Let us know if you'd like more information on any of our events, and we hope to see you at an upcoming webinar, or live in Philadelphia later this year! Attendees and Crane Data subscribers can access the Powerpoints, recordings and conference materials at the bottom of our "Content" page, and see the materials from our last webinar, Asian Money Fund Symposium, in our Money Fund Webinar 2021 Download Center. Finally, register for our next free event, Money Fund Wisdom Product Training, which is Thursday, July 20 from 2-3pm EDT.

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.)

The ICI's latest weekly "Money Market Fund Assets" report shows MMFs decreasing for the second week in a row, following four straight weeks of increases. The release says, "Total money market fund assets decreased by $26.94 billion to $4.58 trillion for the week ended Wednesday, June 16.... Among taxable money market funds, government funds decreased by $20.94 billion and prime funds decreased by $5.92 billion. Tax-exempt money market funds decreased by $78 million." ICI's weekly "Assets" release shows money fund assets up $281 billion, or 6.5%, year-to-date in 2021. Inst MMFs are up $372 billion (13.4%), while Retail MMFs are down $91 billion (-6.0%). ICI's stats show Institutional MMFs decreasing $27.8 billion and Retail MMFs increasing $855 million in the latest week. Total Government MMF assets, including Treasury funds, were $3.998 trillion (87.3% of all money funds), while Total Prime MMFs were $486.9 billion (10.6%). Tax Exempt MMFs totaled $93.3 billion (2.0%). Over the past 52 weeks, money fund assets have decreased by $106 billion, or -2.2%, with Retail MMFs falling by $129 billion (-8.2%) and Inst MMFs rising by $22 billion (0.7%). (Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're almost $400 billion lower than our asset series.) It explains, "Assets of retail money market funds increased by $855 million to $1.43 trillion. Among retail funds, government money market fund assets increased by $3.55 billion to $1.12 trillion, prime money market fund assets decreased by $1.98 billion to $230.95 billion, and tax-exempt fund assets decreased by $717 million to $81.37 billion." Retail assets account for just under a third of total assets, or 31.3%, and Government Retail assets make up 78.2% of all Retail MMFs. ICI adds, "Assets of institutional money market funds decreased by $27.80 billion to $3.14 trillion. Among institutional funds, government money market fund assets decreased by $24.49 billion to $2.88 trillion, prime money market fund assets decreased by $3.94 billion to $255.96 billion, and tax-exempt fund assets increased by $639 million to $11.91 billion." Institutional assets accounted for 68.7% of all MMF assets, with Government Institutional assets making up 91.5% of all Institutional MMF totals.

While the Federal Reserve's FOMC Statement was relatively uneventful from yesterday's meeting, Fed Chair Jerome Powell commented, "On a final note, we made a technical adjustment today to the Federal Reserve's administered rates. The IOER and Overnight RRP rates we adjusted upward by 5 basis points in order to keep the Federal Funds Rate well within the target range and to support smooth functioning in money markets. This technical adjustment has no bearing on the appropriate path for the Federal Funds Rate or stance on monetary policy." Yesterday, mutual fund news website ignites discussed the issue in "Fed Meeting a 'Snoozer' for All but Money Funds." They tell us, "Managers of government money market funds may be holding their breath Wednesday in anticipation of the outcome of the Federal Reserve's two-day meeting that wraps up this afternoon. The Federal Reserve may announce that it will increase its so-called administered rates -- the interest that the central bank pays on excess reserves and on overnight reverse repurchase agreements, money market fund executives say. Increasing either one by even a handful of basis points would help government money funds contend with a market that has grown increasingly challenging for them to navigate, the executives say." The piece quotes BlackRock's Tom Callahan, "For the rest of the world, [the] Fed meeting is a snoozer with a pre-determined outcome, but for the money fund industry it's an eventful meeting." The ignites article quotes our Peter Crane, "If short-term Treasury yields drop to zero and remain there, only the largest money funds sponsors would likely be able to keep those products running for long... [T]he whole fee waiver question gets more intense [with zero yields] because waiving half or three-quarters of fees isn't going to kill you. Waiving all fees and even subsidizing -- nobody can do that for long." It adds, "Some sponsors may consider closing government funds to new investors if yields decline further, [Federated Hermes' Deborah] Cunningham says.... Fidelity soft-closed three Treasury money market funds in April of last year, after cash flooded into government funds during the coronavirus market sell-off.... The firm reopened them in September. Vanguard likewise soft-closed its $36.7 billion Treasury Money Market Fund in April of last year. The firm reopened the fund in August." Cunningham adds, "Raising the reverse repurchase rate by even a few basis points from where it currently sits at zero would help government money funds, as would bumping up the excess reserve rate from 10 bps."

A press release entitled, "FinTechs Safened and DespositBook announce a Strategic Partnership," explains, "Safened, based in Amsterdam and its US broker/dealer affiliate Safened US Inc. are pleased to announce their strategic partnership with DepositBook, a UK and Dubai based deposit platform. With this partnership Safened will be able to provide US and European corporate and institutional clients access through their Global Liquidity Platform to the DepositBook's network of Partner Banks based in countries of the GCC (Gulf Cooperation Council e.g. United Arab Emirates, Qatar and Kuwait) and Asia." The release quotes Co-Founder & Director of Safened Chris van Straeten, "Our partnership provides a unique wholesale liquidity solution for our US and European corporate and institutional clients, whilst offering highly rated GCC banks attractive USD funding alternatives. With our partnership, we can offer our US customers potentially attractive risk adjusted returns on term deposit offers of these GCC banks." The release continues, "The strategic partnership will also cover joint product roll outs and explore cost and revenue synergy and will create a truly global, cross-border marketplace by connecting banks with corporate and non-bank institutional depositors using advanced technologies and transaction processing structures." Sid Bhandari, Founder & Director of DepositBook, comments, "The partnership between Safened and DepositBook will significantly accelerate growth and provide a strong value proposition to the customers and Partner Banks of both platforms. We will benefit immensely from the scale and global presence of a combined platform and are excited to be embarking on this journey with them." The release adds, "We invite Corporate Treasurers, Banks, Wealth managers, Money Market Fund Managers and any other qualified investor to participate in our upcoming Quarterly Liquidity Webinar, moderated by our partner The Carfang Group, to hear more on how to offload surplus liquidity for banks, corporates and any other QIB. You can sign-up here."

Fitch Ratings posted the report, "Local Government Investment Pools: 1Q21." They tell us, "In a continued effort to expand the dataset on local government investment pools (LGIPs), Fitch has added 16 LGIPs to our indices, with approximately $32 billion in assets as of 1Q21. The indices now track 62 pools with $413 billion in total assets. Assets for the Fitch Liquidity LGIP Index increased by $7 billion QoQ and $48 billion YoY, to $308 billion. The 2.5% QoQ increase is lower than the 5.5% average increase in 1Q over the last three years. Assets for the Fitch Short-Term LGIP Index decreased by $2 billion QoQ and increased by $14 billion YoY, to $104 billion. The 1.9% QoQ decrease is lower than the 2.1% average decrease in 1Q over the last three years. Fitch expects LGIP asset levels to remain elevated in the near future, potentially offsetting some of the typical seasonal outflows seen in the late summer months, as state and local governments continue to receive direct federal funding from the American Rescue Plan. In addition, increases in sales tax revenue should benefit localities that are dependent on tourism and business travel as more states continue with their re-opening plans." Fitch continues, "Net yields for both Fitch LGIP indices continued to fall QoQ, marking the eighth straight quarterly decline, albeit at a slower relative decline than previous quarters. The Fitch Liquidity LGIP Index ended the quarter with a net yield of 0.06%, outpacing the average institutional prime MMF 7-day net yield of 0.03%. The Fitch Short-Term LGIP Index ended the period with an average net yield of 0.63%, dropping 1.05% from a year prior as managers continued to reinvest maturing securities at lower yields. LGIP managers have continued to cautiously extend their interest rate exposures in this low rate environment, with the weighted average maturity of the Fitch Liquidity LGIP Index increasing to 49 days (+7 days YoY) and the duration of the Fitch Short-Term LGIP Index ticking up slightly higher to 1.29 years (up from 1.27 at the end of 1Q20). Allocations to Treasuries decreased as the supply in that segment has reduced, and instead LGIPs have been leaving more cash in money funds and bank deposits." (Note: Fitch is hosting an "LGIP & Public Funds Short-Term Market Update" webinar this Thursday, June 17, at 3pm EDT, following Crane Data's "Asian Money Fund Symposium," Thursday at 10am-12pm Eastern. Fitch's Greg Fayvilevich will be joined by San Bernardino County's Parth Bhatt and RBC's Mark Hernandez "to discuss recent trends in short-term markets, focusing on LGIPs (local government investment pools) and other public sector investors.")

The Financial Stability Oversight Council for the U.S. Department of the Treasury met Friday and discussed money market mutual fund reforms briefly at the start of the meeting. (LIBOR was also a big topic of discussion.) A "Readout of Financial Stability Oversight Council Meeting" says, "U.S. Treasury Secretary Janet L. Yellen today convened a meeting of the Financial Stability Oversight Council (Council) in executive and open sessions by videoconference. 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. The Council also heard an update from Treasury Department staff regarding the progress made on Council priorities, including: 1) vulnerabilities in nonbank financial intermediation, 2) climate change, and 3) Treasury market resilience. In the open session, the Council voted to approve a statement highlighting the importance of money market fund reform and supporting the SEC's engagement on this important issue. `The Council also received an update from the Federal Reserve Board on the importance of accelerating the financial sector's transition from LIBOR and using reference rates for derivatives and capital markets products that have sufficient underlying volumes compared to contracts referencing the rate." At his first FSOC meeting as SEC Chair, Gary Gensler commented, "I am honored to be here rejoining the Financial Stability Oversight Council meeting, today for the first time as Chair of the Securities and Exchange Commission. I believe in this Council's mission to identify and respond to financial stability risks and to better promote market discipline. Financial stability is also a part of my remit as Chair of the SEC. Last spring, we witnessed system-wide issues affecting critical parts of our short-term funding markets, including money market funds, commercial paper, and the treasury repo markets. We also saw challenges in the treasury repo markets in the fall of 2019. Let me turn to money market funds, which are an important part of our markets and source of wholesale funding for many issuers. The SEC sought to address structural issues in these funds in reforms adopted in 2010 and 2014. Based on the events of last spring, the SEC, this Council, and the President's Working Group have engaged in a review of how we can make further progress to enhance the resiliency of these funds." He added, "The events brought particular focus to prime money market funds, and their interrelationship with investments in commercial paper and certificates of deposit. CP and CD have limited liquidity in good times, and in critical weeks of stress last spring, virtually disappeared. It's important to ensure the resiliency of money market funds. I am directing SEC staff to look into these issues, in coordination with other federal agencies, and to consider any further reforms needed." See the FSOC's "Statement on Money Market Fund Reforms" here, and watch for more coverage from the meeting and discussions on pending reforms in coming days.

The Investment Company Institute's latest weekly "Money Market Fund Assets" report shows MMFs decreasing for the first time after 4 straight weeks of increases. The release says, "Total money market fund assets decreased by $6.90 billion to $4.61 trillion for the week ended Wednesday, June 9.... Among taxable money market funds, government funds decreased by $3.82 billion and prime funds decreased by $2.39 billion. Tax-exempt money market funds decreased by $698 million." ICI's weekly "Assets" release shows money fund assets up $308 billion, or 7.2%, year-to-date in 2021. Inst MMFs are up $400 billion (14.4%), while Retail MMFs are down $103 billion (-6.8%). ICI's stats show Institutional MMFs decreasing $4.3 billion and Retail MMFs decreasing $2.6 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.019 trillion (87.3% of all money funds), while Total Prime MMFs were $492.8 billion (10.7%). Tax Exempt MMFs totaled $93.4 billion (2.0%). Over the past 52 weeks, money fund assets have decreased by $113 billion, or -2.4%, with Retail MMFs falling by $138 billion (-8.8%) and Inst MMFs rising by $15 billion (0.5%). (Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're almost $400 billion lower than our asset series.) It explains, "Assets of retail money market funds decreased by $2.59 billion to $1.43 trillion. Among retail funds, government money market fund assets decreased by $990 million to $1.12 trillion, prime money market fund assets decreased by $1.08 billion to $232.93 billion, and tax-exempt fund assets decreased by $513 million to $82.09 billion." Retail assets account for just under a third of total assets, or 31.1%, and Government Retail assets make up 78.0% of all Retail MMFs. ICI adds, "Assets of institutional money market funds decreased by $4.31 billion to $3.17 trillion. Among institutional funds, government money market fund assets decreased by $2.83 billion to $2.90 trillion, prime money market fund assets decreased by $1.30 billion to $259.90 billion, and tax-exempt fund assets decreased by $185 million to $11.27 billion." Institutional assets accounted for 68.9% of all MMF assets, with Government Institutional assets making up 91.4% of all Institutional MMF totals.

The Wall Street Journal writes, "Banks to Companies: No More Deposits, Please," in its CFO Journal. The article says, "U.S. companies are holding on to billions of dollars in cash. Their banks aren't sure what to do with it. When the coronavirus pandemic hit last year, corporate executives rushed to raise money. Banks have been holding that cash ever since, and because companies are reluctant to borrow from them, they can't turn it into income-generating loans. That has weighed on banks' profit margins, and some have started pushing corporate customers to spend the cash on their businesses or move it elsewhere. Bankers say they thought the improving economy would reduce companies' desire for holding cash, but deposit inflows have continued in recent weeks. Chief financial officers and treasurers, many still wary of the pandemic's impact, say they aren't ready for big changes, even if they earn little or nothing on their deposits." It tells us, "Companies flooded U.S. banks with deposits at the start of the pandemic. In March 2020, the Federal Reserve lowered interest rates to near zero and launched bond-buying programs, which enabled many companies to raise funds at low costs. The Treasury Department also made loans, including to airlines. Bank deposits have continued to surge this year. Between late March and May 26, they rose by $411 billion to $17.09 trillion, according to the latest available data from the Federal Reserve." The Journal adds, "In recent months, banks including BNY Mellon have focused on moving clients from deposits into money-market funds, which are common cash-like investments. Assets in money-market accounts, even ones run by the same bank, are treated differently under bank capital rules, alleviating some of the regulatory pressure. Flows into U.S. money-market funds have surged in recent months, pushing the total assets held in such funds to $4.61 trillion, just shy of the record set in May 2020, according to the Investment Company Institute."

Please join us for Crane Data's next webinar, "Asian Money Fund Symposium," which will take place June 17 (Thursday) from 10am-12pm Eastern. (Register here for this free event.) This 2-hour webinar on money market funds in Asia will be hosted by Crane Data's Peter Crane and feature a panel discussion with J.P. Morgan Asset Management's Aidan Shevlin and Goldman Sachs Asset Management's Pat O'Callaghan, as well as presentations by Fitch Ratings' Alastair Sewell and S&P Global's Andrew Paranthoiene. While the focus will be on Chinese money funds, we'll also briefly discuss the `latest cash developments in Japan, Korea, India, Taiwan and Australia. Also, mark your calendars for our next webinar, "Money Fund Wisdom Product Training," which is scheduled for July 20 (Tues.) from 2pm-3pm EDT. We'll give a preview of our new Money Fund Wisdom database query system and product suite, and we'll review features and tips for using our Money Fund Intelligence product lineup and data sets. Crane Data is thrilled to resume live events this fall. Our big show, Crane's Money Fund Symposium, is scheduled for Sept. 21-23, 2021, at The Loews Hotel, in Philadelphia, Pa. The latest agenda is available and registrations are now being taken. Registration is $750, and discounted hotel reservations are available. Visit the MF Symposium website for more details. We hope you'll join us in person in Philadelphia! Finally, we're cancelling our live European Money Fund Symposium in Paris, France and moving this to September 2022. But we will host a virtual European MFS on Oct. 21, 2021. Stay tuned for details. Let us know if you'd like more information on any of our events, and we hope to see you at an upcoming webinar, or live in Philadelphia or Paris later this year! (Attendees and Crane Data subscribers can access the Powerpoints, recordings and conference materials at the bottom of our "Content" page, and see the materials from our last webinar, Handicapping Money Fund Reforms in our Money Fund Webinar 2021 Download Center.)

Fidelity Institutional's latest "Fixed Income Monthly Commentary" explains in its "Money Market Review," that "Yields on Short-Term Credit Instruments are at or Near All-Time Lows. The front-end of the credit markets yield curve is feeling the effects of the growing money market supply and demand imbalance. The Bloomberg 3-Month Short Term Bank Yield Index fell 5 basis points over the past month to close out the month of May at 0.09%. The yield on 1-month and 3-month LIBOR finished the month of May at an all-time low. 1-month LIBOR fell 2 basis points to 0.09% and 3- month LIBOR closed the month at 0.13%, falling 5 basis points since the end of April." The piece continues, "In response to limited investment options in the front end of the curve, balances at the Fed's overnight reverse repurchase agreement facility surged to $485 billion on Thursday, May 27th; this represents the highest balance on record, surpassing the previous record of $474 billion set at the end of 2015." Fidelity explains, "Given the increase in reserves, combined with limited supply, it is possible that the Fed may make a technical adjustment to its administered rates at the June FOMC meeting, with such an adjustment possibly including both the interest rate that the Fed offers on reserve balances as well as the rate it offers via its overnight reverse repurchase (RRP) agreement facility. By doing so, the Fed would be seeking to maintain the fed funds effective rate within the corridor of their current targeted policy rate range of 0.00–0.25%." They add, "Assets in taxable money market funds increased by $80.3 billion in the month of May and are higher by $287.8 billion year-to-date. Year-to-date, through May 28th, Prime MMF assets have decreased by $48.8 billion, Government and Agency MMF assets are higher by $236.8 billion, and Treasury MMF assets have increased by $99.8 billion."

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