Link of The Day
ICI: Money Funds Lower on Week
The Investment Company Institute published its latest weekly "Money Market Fund Assets" report Thursday, which shows money market mutual fund lower to $6.142 trillion in the latest week after hitting a record early in July. Assets have risen in 11 of the last 14 weeks, increasing by $173.8 billion (or 2.9%) since April 24. MMF assets are up by $256 billion, or 5.4%, year-to-date in 2024 (through 7/24/24), with Institutional MMFs up $65 billion, or 2.1% and Retail MMFs up $191 billion, or 11.4%. Over the past 52 weeks, money funds have risen by $655 billion, or 11.9%, with Retail MMFs up by $448 billion (22.0%) and Inst MMFs rising by $208 billion (6.0%). The weekly release says, "Total money market fund assets decreased by $11.81 billion to $6.14 trillion for the week ended Wednesday, July 24, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $7.73 billion and prime funds decreased by $2.86 billion. Tax-exempt money market funds decreased by $1.22 billion." ICI's stats show Institutional MMFs falling $8.1 billion and Retail MMFs falling $3.7 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.956 trillion (80.7% of all money funds), while Total Prime MMFs were $1.059 trillion (17.2%). Tax Exempt MMFs totaled $127.4 billion (2.1%). ICI explains, "Assets of retail money market funds decreased by $3.72 billion to $2.48 trillion. Among retail funds, government money market fund assets decreased by $4.42 billion to $1.58 trillion, prime money market fund assets increased by $2.03 billion to $789.40 billion, and tax-exempt fund assets decreased by $1.32 billion to $115.65 billion." Retail assets account for over a third of total assets, or 40.4%, and Government Retail assets make up 63.5% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $8.09 billion to $3.66 trillion. Among institutional funds, government money market fund assets decreased by $3.31 billion to $3.38 trillion, prime money market fund assets decreased by $4.88 billion to $269.68 billion, and tax-exempt fund assets increased by $100 million to $11.76 billion." Institutional assets accounted for 59.6% of all MMF assets, with Government Institutional assets making up 92.3% of all institutional MMF totals. According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $23.6 billion in July (through 7/24) to $6.512 trillion. They hit a record $6.559 trillion on 7/11 but have since eased off a bit. Assets rose by $15.7 billion in June and $91.4 billion in May, but they fell $15.8 billion in April and $68.8 billion in March. They rose $72.1 billion in February, $93.9 billion in January, $32.7 billion in December and $226.4 billion in November. MMF totals fell by $31.9 billion in October. They rose $93.9 billion in September and $98.3 billion in August. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $400 billion lower than Crane's asset series.
Barron's Writes on Pressure on Sweeps
Barron's published "Morgan Stanley Raises Rates on Cash. It's a Sign of Pressure Across Industry." The article explains, "For years, investors' uninvested cash has been a lucrative revenue source for the wealth management industry. Companies have been paying customers paltry interest on that cash even as rates overall soared over the past two years, allowing firms to earn much higher yields than they paid out to their clients in many cases. Now, that's beginning to change. Morgan Stanley will raise rates on some customers' uninvested cash in advisory accounts, a spokeswoman confirmed Wednesday. Effective Aug. 1, clients with $250,000 or more in deposits in the program will receive a yield of 2%. The company currently pays 0.01% on balances between $250,000 and $500,000. Morgan Stanley indicated last week that these changes were coming." The piece explains, "`It isn't the only wealth manager making adjustments. Wells Fargo said Friday July 12 that it had bumped up the interest it pays on clients' uninvested cash. That some of the nation's largest wealth managers are now raising rates on cash has shareholders concerned about the ripple effects on net interest income, an important profit center for wealth managers. Last week saw a selloff in wealth management stocks -- 11% on average -- as Wells Fargo and Morgan Stanley announced changes that raised alarms among analysts about potential hits to future profits as well as lurking competitive, regulatory, and legal pressures related to how firms have treated uninvested client cash." Barron's says, "The fact that some firms have been sweeping customers' uninvested cash into low-yielding bank accounts and then making a profit by lending out that cash at much higher interest rates is turning into a thorny legal issue. Across the industry, wealth managers generally pay clients about 1% or less on sweep deposits.... Rates at 5% are readily available in money-market funds." They add, "Newly filed lawsuits are taking aim at brokerage and wealth management companies' cash practices, which they say fall short of the fiduciary standard. Such suits are less likely to come from self-directed investors who have the opportunity to seek out higher yields for their uninvested cash if they want. Last week, a customer of LPL Financial sued the company for alleged breach of fiduciary duty and 'unjust enrichment' related to LPL's cash sweep programs."
Weekly Money Fund Portfolio Holdings
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 July 19) includes Holdings information from 79 money funds (up 11 from a week ago), or $3.412 trillion (up from $3.153 trillion) of the $6.521 trillion in total money fund assets (or 52.3%) tracked by Crane Data. (Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our July 11 News, "July Money Fund Portfolio Holdings: Repo Jumps; TDs, Treasuries Down.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.487 trillion (up from $1.415 trillion a week ago), or 43.6%; Repurchase Agreements (Repo) totaling $1.280 trillion (up from $1.207 trillion a week ago), or 37.5%, and Government Agency securities totaling $272.8 billion (up from $254.5 billion), or 8.0%. Commercial Paper (CP) totaled $113.7 billion (up from a week ago at $98.3 billion), or 3.3%. Certificates of Deposit (CDs) totaled $87.7 billion (up from $69.0 billion a week ago), or 2.6%. The Other category accounted for $103.5 billion or 3.0%, while VRDNs accounted for $68.2 billion, or 2.0%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.487 trillion (43.6% of total holdings), Fixed Income Clearing Corp with $385.6B (11.3%), the Federal Home Loan Bank with $204.2 billion (6.0%), Citi with $87.3B (2.6%), the Federal Reserve Bank of New York with $86.7B (2.5%), BNP Paribas with $79.4B (2.3%), JP Morgan with $78.1B (2.3%), Federal Farm Credit Bank with $64.9B (1.9%), RBC with $61.5B (1.8%) and Goldman Sachs with $52.9B (1.6%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($252.9B), Goldman Sachs FS Govt ($235.2B), JPMorgan 100% US Treas MMkt ($207.7B), Fidelity Inv MM: Govt Port ($201.1B), Federated Hermes Govt ObI ($160.9B), BlackRock Lq FedFund ($146.8B), Fidelity Inv MM: MM Port ($131.3B), State Street Inst US Govt ($130.1B), BlackRock Lq Treas Tr ($119.8B) and Dreyfus Govt Cash Mgmt ($115.9B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
Crane 100 Inches Back Up to 5.13%
Money fund yields rose 1 bp to 5.13% on average (as measured by our Crane 100 Money Fund Index, an average of 7-day yields for the 100 largest taxable money funds) in the week ended July 19. Yields were 5.13% on 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, 5.20% on 12/31/23, 4.94% on 6/30/23, 4.61% on 3/31/23 and 4.05% on 12/31/22. The vast majority of money market fund assets now yield 5.0% or higher. Assets of money market funds fell by $11.3 billion last week to $6.521 trillion according to Crane Data's Money Fund Intelligence Daily. Weighted average maturities were unchanged last week at 34 days. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 709), shows a 7-day yield of 5.03%, up 1 bp in the week through Friday. Prime Inst MFs were up 1 bp at 5.18% in the latest week. Government Inst MFs were unchanged at 5.11%. Treasury Inst MFs were up 1 bp to 5.07%. Treasury Retail MFs currently yield 4.85%, Government Retail MFs yield 4.83%, and Prime Retail MFs yield 5.02%, Tax-exempt MF 7-day yields were down 2 bps to 2.42%. According to Monday's Money Fund Intelligence Daily, with data as of Friday (7/19), 120 money funds (out of 829 total) yield under 3.0% with $131.9 billion in assets, or 2.0%; 4 funds yield between 3.00% and 3.99% ($810 million, or 0.0%), 255 funds yield between 4.0% and 4.99% ($1.127 trillion, or 17.3%) and 450 funds now yield 5.0% or more ($5.261 trillion, or 80.7%). Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.62%. The latest Brokerage Sweep Intelligence, with data as of July 19, shows that there were no changes over the past week. Eight weeks ago, we removed the rates for TD Ameritrade from the listings, which completed its merger with Charles Schwab and which pushed the averages higher (2 bps). Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
Schwab: How Much Cash Is Too Much?
Charles Schwab recently published a brief titled, "How Much Cash Is Too Much Cash?" Subtitled, "Today's relatively high yields from savings accounts and other cash investments are tempting, but don't overdo it," it tells us, "Despite inflation's spike in 2022, the attendant rise in interest rates has been a welcome development for savers, who piled more than $1 trillion into money market funds between the third quarter of 2022 and the third quarter of 2023. Unfortunately, the downside of higher rates is that some investors may now have cash allocations out of step with their goals. 'It makes sense that investors have been taking advantage of these relatively high rates,' says Rob Williams, managing director of financial planning and wealth management at the Schwab Center for Financial Research. 'But with the Federal Reserve expected to lower rates in 2024, the current yields on cash may not last much longer. And if your current cash allocation is larger than your target allocation in a long-term portfolio, even today's relatively high yield isn't likely to exceed the returns you could get from stocks and bonds over time.'" The piece continues, "For example, in 2023 -- which by most accounts was expected to be a rough year for the stock market -- the S&P 500 Index's total return was a stunning 26.3%. 'Cash still belongs in your portfolio, but it is first and foremost a way to help buffer against losses or fund a near-term goal -- not a way to achieve meaningful returns,' Rob says. That said, deciding whether you have 'too much' cash depends on your personal situation. 'If you have a shorter-term goal on the horizon -- say, college tuition or the down payment on a second home -- having more investment cash on hand, as well as historically less volatile investments such as high-quality short-term bonds, may make sense,' Rob says. 'Plus, some people simply aren't comfortable with increased market volatility, and these higher rates are a way of getting a bit more return without much risk, at least for the time being.'" Schwab's piece adds, "The important thing is to let your needs, risk tolerance, and time horizon -- rather than the novelty of higher rates—dictate your allocation."
ICI: MMFs Inch Up Towards Record
The Investment Company Institute published its latest weekly "Money Market Fund Assets" report Thursday, which shows money market mutual fund rising higher to $6.154 trillion in the latest week after a dip the prior week and a huge jump two weeks prior. Assets have risen in 11 of the last 13 weeks, increasing by $186.0 billion (or 3.1%) since April 24. MMF assets are up by $268 billion, or 5.6%, year-to-date in 2024 (through 7/17/24), with Institutional MMFs up $73 billion, or 2.4% and Retail MMFs up $195 billion, or 11.6%. Over the past 52 weeks, money funds have risen by $696 billion, or 12.7%, with Retail MMFs up by $455 billion (22.4%) and Inst MMFs rising by $240 billion (7.0%). The weekly release says, "Total money market fund assets increased by $9.61 billion to $6.15 trillion for the week ended Wednesday, July 17, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $6.83 billion and prime funds increased by $4.66 billion. Tax-exempt money market funds decreased by $1.88 billion." ICI's stats show Institutional MMFs rising $2.3 billion and Retail MMFs rising $7.4 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.963 trillion (80.7% of all money funds), while Total Prime MMFs were $1.062 trillion (17.3%). Tax Exempt MMFs totaled $128.6 billion (2.1%). ICI explains, "Assets of retail money market funds increased by $7.36 billion to $2.48 trillion. Among retail funds, government money market fund assets increased by $5.54 billion to $1.58 trillion, prime money market fund assets increased by $3.59 billion to $787.38 billion, and tax-exempt fund assets decreased by $1.77 billion to $116.97 billion." Retail assets account for over a third of total assets, or 40.4%, and Government Retail assets make up 63.6% of all Retail MMFs. They add, "Assets of institutional money market funds increased by $2.25 billion to $3.67 trillion. Among institutional funds, government money market fund assets increased by $1.29 billion to $3.38 trillion, prime money market fund assets increased by $1.07 billion to $274.56 billion, and tax-exempt fund assets decreased by $108 million to $11.66 billion." Institutional assets accounted for 59.6% of all MMF assets, with Government Institutional assets making up 92.2% of all institutional MMF totals. According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $47.7 billion in July (through 7/17) to $6.537 trillion. They hit a record $6.559 trillion on 7/11 but have since eased off a bit. Assets rose by $15.7 billion in June and $91.4 billion in May, but they fell $15.8 billion in April and $68.8 billion in March. They rose $72.1 billion in February, $93.9 billion in January, $32.7 billion in December and $226.4 billion in November. MMF totals fell by $31.9 billion in October. They rose $93.9 billion in September and $98.3 billion in August. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $400 billion lower than Crane's asset series.
ICI's Money Fund Holdings Summary
ICI released its latest monthly "Money Market Fund Holdings" summary, which reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds. This release says, "The Investment Company Institute (ICI) reports that, as of the final Friday in June, prime money market funds held 44.6 percent of their portfolios in daily liquid assets and 61.6 percent in weekly liquid assets, while government money market funds held 77.7 percent of their portfolios in daily liquid assets and 87.9 percent in weekly liquid assets." Prime DLA was down from 45.7% in May, and Prime WLA was down from 62.5%. Govt MMFs' DLA was unchanged from 77.7% and Govt WLA increased from 87.8% the previous month. ICI explains, "At the end of June, prime funds had a weighted average maturity (WAM) of 30 days and a weighted average life (WAL) of 48 days. Average WAMs and WALs are asset-weighted. Government money market funds had a WAM of 36 days and a WAL of 84 days." Prime WAMs were 2 days shorter and WALs were 2 days shorter from the previous month. Govt WAMs were 1 day shorter and WALs were unchanged from May. Regarding Holdings by Region of Issuer, the release tells us, "Prime money market funds' holdings attributable to the Americas rose from $496.99 billion in May to $559.01 billion in June. Government money market funds' holdings attributable to the Americas rose from $4,405.24 billion in May to $4,476.77 billion in June." The Prime Money Market Funds by Region of Issuer table shows Americas-related holdings at $559.0 billion, or 54.4%; Asia and Pacific at $175.5 billion, or 17.1%; Europe at $276.5 billion, or 26.9%; and, Other (including Supranational) at $16.1 billion, or 1.6%. The Government Money Market Funds by Region of Issuer table shows Americas at $4.477 trillion, or 90.5%; Asia and Pacific at $141.9 billion, or 2.9%; Europe at $316.1 billion, 6.4%, and Other (Including Supranational) at $10.9 billion, or 0.2%.
Weekly Money Fund Portfolio Holdings
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 July 12) includes Holdings information from 68 money funds (up 7 from a week ago), or $3.153 trillion (up from $2.974 trillion) of the $6.346 trillion in total money fund assets (or 49.7%) tracked by Crane Data. (Our Weekly MFPH are e-mail only and aren't available on the website. See our latest Monthly Money Fund Portfolio Holdings here and our July 11 News, "July Money Fund Portfolio Holdings: Repo Jumps; TDs, Treasuries Down.") Our latest Weekly MFPH Composition summary shows Government assets dominating the holdings list with Treasuries totaling $1.415 trillion (up from $1.347 trillion a week ago), or 44.9%; Repurchase Agreements (Repo) totaling $1.207 trillion (up from $1.140 trillion a week ago), or 38.3%, and Government Agency securities totaling $254.5 billion (up from $238.8 billion), or 8.1%. Commercial Paper (CP) totaled $98.3 billion (up from a week ago at $89.6 billion), or 3.1%. Certificates of Deposit (CDs) totaled $69.0 billion (up from $67.0 billion a week ago), or 2.2%. The Other category accounted for $76.3 billion or 2.4%, while VRDNs accounted for $32.5 billion, or 1.0%. The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.415 trillion (44.9% of total holdings), Fixed Income Clearing Corp with $304.7B (9.7%), the Federal Home Loan Bank with $189.7 billion (6.0%), the Federal Reserve Bank of New York with $98.4B (3.1%), JP Morgan with $83.0B (2.6%), Citi with $83.0B (2.6%), BNP Paribas with $79.3B (2.5%), RBC with $63.2B (2.0%), Federal Farm Credit Bank with $61.5B (2.0%) and Goldman Sachs with $51.2B (1.6%). The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($254.8B), Goldman Sachs FS Govt ($233.0B), JPMorgan 100% US Treas MMkt ($204.5B), Fidelity Inv MM: Govt Port ($198.2B), BlackRock Lq FedFund ($148.3B), Morgan Stanley Inst Liq Govt ($144.3B), Fidelity Inv MM: MM Port ($130.4B), BlackRock Lq Treas Tr ($125.0B), State Street Inst US Govt ($121.5B) and Dreyfus Govt Cash Mgmt ($121.4B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary.)
Crane 100 Index Flat at 5.12%
Money fund yields remained at 5.12% on average (as measured by our Crane 100 Money Fund Index, an average of 7-day yields for the 100 largest taxable money funds) in the week ended July 12. Yields were 5.13% on 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, 5.20% on 12/31/23, 4.94% on 6/30/23, 4.61% on 3/31/23 and 4.05% on 12/31/22. The vast majority of money market fund assets now yield 5.0% or higher. Assets of money market funds fell by $1.3 billion last week to $6.532 trillion according to Crane Data's Money Fund Intelligence Daily. Weighted average maturities were unchanged last week at 34 days. The broader Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 710), shows a 7-day yield of 5.02%, unchanged in the week through Friday. Prime Inst MFs were unchanged at 5.17% in the latest week. Government Inst MFs were unchanged at 5.11%. Treasury Inst MFs were up 1 bp to 5.06%. Treasury Retail MFs currently yield 4.84%, Government Retail MFs yield 4.82%, and Prime Retail MFs yield 5.02%, Tax-exempt MF 7-day yields were down 56 bps to 2.44%. According to Monday's Money Fund Intelligence Daily, with data as of Friday (7/12), 120 money funds (out of 830 total) yield under 3.0% with $133.6 billion in assets, or 2.0%; 4 funds yield between 3.00% and 3.99% ($810 million, or 0.0%), 258 funds yield between 4.0% and 4.99% ($1.347 trillion, or 20.6%) and 448 funds now yield 5.0% or more ($5.050 trillion, or 77.3%). Our Brokerage Sweep Intelligence Index, an average of FDIC-insured cash options from major brokerages, was unchanged at 0.62%. The latest Brokerage Sweep Intelligence, with data as of July 12, shows that there were no changes over the past week. Seven weeks ago, we removed the rates for TD Ameritrade from the listings, which completed its merger with Charles Schwab and which pushed the averages higher (2 bps). Three of the 10 major brokerages tracked by our BSI still offer rates of 0.01% for balances of $100K (and lower tiers). These include: E*Trade, Merrill Lynch and Morgan Stanley.
European Money Fund Symposium
We hope you'll join us for our 10th Annual European Money Fund Symposium, which will take place Sept. 19-20 at the London Tower Bridge Hilton in London, England. The latest agenda is available here and we continue to take registrations. (Make your hotel reservations soon if you do plan on attending!) Below are more details on our upcoming shows, but feel free to contact us for more information. Our 2023 European MF Symposium event in Edinburgh attracted over 140 money fund professionals, sponsors and speakers, and we again expect our show in London to once again be the largest gathering of money market professionals outside the U.S. "European Money Fund Symposium offers European, global and 'offshore' money market portfolio managers, investors, issuers, dealers and service providers a concentrated and affordable educational experience, and an excellent and informal networking venue," says Crane Data President Peter Crane. "Our mission is to deliver the best possible conference content at an affordable price to money market fund professionals," he adds. Registration for European Money Fund Symposium is $1,000 USD. EMFS will be held at the Hilton London Tower Bridge. Hotel rooms must be booked before August 14 to receive our discounted rate of E329. Visit www.craneeurosymposium.com to register, and contact us to request the PDF brochure. (Let us know too if you'd like information on speaking or sponsorships.) Also, start making plans for our next Crane's Money Fund University, which will be held in Providence, RI, Dec. 19-20, 2024. Money Fund University covers the history of money funds, interest rates, regulations (Rule 2a-7), ratings, rankings, money market instruments such as commercial paper, CDs and Treasuries, and portfolio construction and credit analysis. We also include segments on offshore money funds and ultra-short bond funds. Money Fund University's comprehensive program is good for both beginners and experienced professionals looking for a refresher. Finally, mark your calendars for our next Bond Fund Symposium, which will be held March 27-28, 2025 in Newport Beach, Calif., and our next Money Fund Symposium, which will be held in June 23-25, 2025 in Boston, Mass. Again, let us know if you'd like more details on any of our events, and we hope to see you in London in September, in Providence in December, in Newport Beach in March 2024, or in Boston in June 2025. Thanks to all of our speakers and sponsors for your support!
Money Fund Assets Dip After Record
The Investment Company Institute published its latest weekly "Money Market Fund Assets" report Thursday, which shows money market mutual fund dipping lower to $6.144 trillion in the latest week after huge jump the prior week. Assets have risen in 10 of the last 12 weeks, increasing by $176.0 billion (or 2.9%) since April 24. MMF assets are up by $258 billion, or 5.4%, year-to-date in 2024 (through 7/10/24), with Institutional MMFs up $71 billion, or 7.3% and Retail MMFs up $187 billion, or 11.2%. Over the past 52 weeks, money funds have risen by $690 billion, or 12.7%, with Retail MMFs up by $455 billion (22.5%) and Inst MMFs rising by $235 billion (6.8%). The weekly release says, "Total money market fund assets decreased by $10.30 billion to $6.14 trillion for the eight-day period ended Wednesday, July 10, the Investment Company Institute reported.... Among taxable money market funds, government funds decreased by $19.02 billion and prime funds increased by $9.53 billion. Tax-exempt money market funds decreased by $815 million." ICI's stats show Institutional MMFs falling $14.0 billion and Retail MMFs rising $3.7 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.957 trillion (80.7% of all money funds), while Total Prime MMFs were $1.057 trillion (17.2%). Tax Exempt MMFs totaled $130.5 billion (2.1%). ICI explains, "Assets of retail money market funds increased by $3.74 billion to $2.48 trillion. Among retail funds, government money market fund assets decreased by $1.16 billion to $1.57 trillion, prime money market fund assets increased by $5.39 billion to $783.79 billion, and tax-exempt fund assets decreased by $493 million to $118.74 billion." Retail assets account for over a third of total assets, or 40.3%, and Government Retail assets make up 63.6% of all Retail MMFs. They add, "Assets of institutional money market funds decreased by $14.04 billion to $3.67 trillion. Among institutional funds, government money market fund assets decreased by $17.86 billion to $3.38 trillion, prime money market fund assets increased by $4.14 billion to $273.48 billion, and tax-exempt fund assets decreased by $322 million to $11.77 billion." Institutional assets accounted for 59.7% of all MMF assets, with Government Institutional assets making up 92.2% of all institutional MMF totals. According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $44.3 billion in July (through 7/10) to $6.533 trillion. They hit a record $6.551 trillion on 7/2 but have since eased off a bit. Assets rose by $15.7 billion in June and $91.4 billion in May, but they fell $15.8 billion in April and $68.8 billion in March. They rose $72.1 billion in February, $93.9 billion in January, $32.7 billion in December and $226.4 billion in November. MMF totals fell by $31.9 billion in October. They rose $93.9 billion in September, $98.3 billion in August and $34.7 billion in July. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $400 billion lower than Crane's asset series.
PFII on LGIP Returns in First Half
The Public Funds Investment Institute posted a piece entitled, "Cash and Short-Term Portfolios Had Strong Returns in the First Half of the Year." It tells us, "LGIP yields have been locked around the Federal Funds rate. They are within a few basis points of their levels at the start of the year and likely will not move until the Fed changes its federal funds target. The challenge that LGIP managers face is that the money market yield curve has provided little advantage to extending maturities.... That is likely the reason managers have kept weighted average maturities in the low to mid 30-day range even if they believe the Fed will reduce rates later this year." The brief continues, "The spread between the PFII Prime LGIP Index and the government index has narrowed from 22 basis points in January to 16 basis points last week. Investing in commercial paper and negotiable CDs offers a smaller advantage than it did for much of 2023. Investors have once again discounted concerns about creditworthiness and liquidity and the risk premium for these instruments has shrunk." The site adds, "S&P reports that the stable value LGIPs it rates added about $35 billion in assets this year. As we noted in a recent Beyond the News piece, public unit investment assets are growing very slowly and managers seem to be favoring liquid investments like LGIPs with the objective of building liquidity in the face of financial uncertainty.... Separate portfolios have lagged cash, but returns have been solid. The PFII 1–3-year model portfolio returned 1.47% for the first six months of the year (that is an annual rate of 2.97%) and 4.93% for the prior 12 months. This lags returns on cash/LGIPs of 5.25% to 5.45%, but portfolios with maturities of two to four years -- the PFII model has a duration of 1.64 -- will maintain their income for a longer period if/when the Fed cuts rates."
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