Money Market News
Crane Data's May Money Fund Portfolio Holdings, with data as of April 30, 2024, show that Repo holdings jumped while Treasuries plunged and CP fell. Money market securities held by Taxable U.S. money funds (tracked by Crane Data) decreased by $61.4 billion to $6.241 trillion in April, after decreasing $63.1 billion in March. Assets increased $66.9 in February, $86.6 in January, $51.1 billion in December and $244.0 billion in November. They decreased $57.9 billion in October, but increased $56.1 in September, $106.7 billion in August and $78.3 billion in July. Repo continued to bounce back and reclaimed its spot as the largest portfolio segment, increasing $94.9 billion, after a steep slide two months prior. Treasuries plummeted by $144.9 billion, falling to the No. 2 spot among portfolio segments. The U.S. Treasury continues to be the single largest Issuer to MMFs. `In April, U.S. Treasury holdings fell to $2.395 trillion, while FICC Repo jumped $20.4 billion to $512.3 billion, surpassing the Fed RRP's $508.0 billion total (which fell $28.8 billion). Agencies were the third largest segment, CP remained fourth, ahead of CDs, Other/Time Deposits and VRDNs. Below, we review our latest Money Fund Portfolio Holdings statistics.
Crane Data's latest monthly Money Fund Portfolio Holdings statistics will be sent out Thursday, and we'll be writing our regular monthly update on the new April 30 data for Friday's News. But we also already uploaded a separate and broader Portfolio Holdings data set based on the SEC's Form N-MFP filings on Wednesday. (We continue to merge the two series, and the N-MFP version is now available via our Portfolio Holdings file listings to Money Fund Wisdom subscribers.) Our new N-MFP summary, with data as of April 30, includes holdings information from 972 money funds (down 3 from last month), representing assets of $6.425 trillion (down from $6.492 trillion). Prime MMFs inched down to $1.377 trillion (down $25.9 billion), or 21.4% of the total. (Note too that there were no funds reclassifying away from "Prime" in the SEC's latest monthly data set.) We review the new N-MFP data, and we also look at our revised MMF expense data, which shows charged expenses inching higher and money fund revenues hitting a record $17.3 billion (annualized) in April.
Crane Data's latest monthly Money Fund Market Share rankings show assets decreased among most of the largest U.S. money fund complexes in April, after falling in March. Money market fund assets fell by $17.6 billion, or -0.3%, last month to $6.386 trillion. Total MMF assets have decreased by $21.7 billion, or -0.3%, over the past 3 months, but they've increased by $694.3 billion, or 12.2%, over the past 12 months. The largest increases among the 25 largest managers last month were seen by Goldman Sachs, BlackRock, JPMorgan, Morgan Stanley and Allspring, which grew assets by $13.5 billion, $6.0B, $4.7B, $4.1B and $3.9B, respectively. Declines in April were seen by Fidelity, American Funds, Vanguard, SSGA and UBS, which decreased by $12.6 billion, $10.5B, $6.3B, $5.9B and $3.4B, respectively. Our domestic U.S. "Family" rankings are available in our MFI XLS product, our global rankings are available in our MFI International product. The combined "Family & Global Rankings" are available to Money Fund Wisdom subscribers. We review the latest market share totals, and look at money fund yields, which were flat in April.
The May issue of our flagship Money Fund Intelligence newsletter, which was sent out to subscribers Tuesday morning, features the articles: "Goldman Latest Prime Inst Exit; CP/CDs Should Be Okay," which covers the continued exodus from Prime Institutional MMFs; "Corporate Treasurers Leaning Away from Prime, to SMAs," which quotes from recent TEXPO 2024 & NEAFP conferences; and, "NY Fed Says Money Funds in Europe Reflect Rates Fast Too," which reviews an article from The Federal Reserve Bank of NY. We also sent out our MFI XLS spreadsheet Tuesday a.m., and we've updated our Money Fund Wisdom database with 4/30/24 data. Our May Money Fund Portfolio Holdings are scheduled to ship on Thursday, May 9, and our May Bond Fund Intelligence is scheduled to go out on Tuesday, May 14. (Note: Register soon for our Money Fund Symposium next month in Pittsburgh, June 12-14. We hope you'll join us!)
J.P. Morgan published an update titled, "MMF reform spotlight," which discusses how the latest round of money fund reforms might impact the short-term credit funding markets. Authors Teresa Ho, Pankaj Vohra and Holly Cunningham write, "With the deadline to implement mandatory liquidity fees for institutional prime MMFs rapidly approaching (in October), the potential impact this change could have on the CP/CD market has come into greater focus. Recall that the last time institutional prime funds went through a structural change was in 2016 (on the back of the 2014 MMF reforms), when they had to convert from a stable NAV to a floating NAV. In the months leading up to the effective date, numerous funds announced they were converting their prime funds to government funds." (Note: Register soon for our Money Fund Symposium next month in Pittsburgh, June 12-14. We hope you'll join us!)
S&P Global Ratings published, "U.S. Domestic 'AAAm' Money Market Fund Trends (First-Quarter 2024)," earlier this week, which tells us, "Flows into rated MMFs were net positive for the first quarter. A small decline (-0.3%) for government MMFs was offset by the 6% growth for prime MMFs. The decline in government MMF assets was the first in more than 12 months. In our view, while interest rates remain high, the small dip in government MMF assets is likely temporary. It's not uncommon for seasonal swings to occur around the long, Good Friday holiday weekend and the April 15 tax date. Rated government and prime MMFs ended the quarter at $3.3 trillion and $279 billion, respectively."
J.P. Morgan's last "Short-Term Market Outlook And Strategy discusses, "A deep dive into weekly MMF holdings and Treasury repo clearing." It a section entitled, "MMF holdings update special edition: tax season flows," they write, "In a departure from our usual monthly MMF holdings update, we took a look at Crane's weekly MMF holdings data to see how their portfolios evolved around tax season -- a time period when MMFs tend to see larger outflows. [A table] shows the composition of their portfolios as of March month-end, 4/11 or 4/12, and 4/18 or 4/19. This is based on 42 taxable MMFs with reported holdings data as of at least 4/18, representing close to 40% of the entire MMF universe." (Note: Let us know if you'd like to see our latest Weekly Money Fund Portfolio Holdings data set, which is a shifting subset of our monthly Money Fund Portfolio Holdings collection.)
The Investment Company Institute, the trade group for the mutual fund industry, published its latest monthly "Trends in Mutual Fund Investing" and "Month-End Portfolio Holdings of Taxable Money Funds" for March 2024 earlier this week. ICI's monthly Trends shows money fund totals falling $73.0 billion in March to $5.984 trillion (after a jump in February, January, December and November, a decrease in October, and increases in September, August, July, June, May and April). Prior to this, the March 2023 jump (a $371.0 billion increase) was the third largest monthly increase ever and the largest in history if you exclude 2 coronavirus lockdown panic months in March and April 2020. Bond fund assets increased $63.8 billion to $4.846 trillion, and bond ETF assets increased and remain above the $1.5 trillion level (after passing it for the first time ever 3 months ago).
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 higher in the latest reported quarter (Q3'23) at $346 billion (up from $319 billion in Q2'23 and up from $331 billion in Q3'22). 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 go into effect in coming months, below.
Federated Hermes, the 6th largest manager of money funds, reported Q1'24 earnings and hosted its Q1'24 earnings call late last week. On the call, President & CEO J. Christopher Donahue, comments, "We ended the first quarter with record assets under management of $779 billion, driven by record money market assets of $579 billion.... In Q1, we reached another record high for money market fund assets, money market separate account assets and total money market assets.... Total money market assets increased by $19 billion during the first quarter from year end. Money market strategies continue to benefit from favorable market conditions for cash as an asset class, elevated liquidity levels in the financial system, and attractive yields compared to cash management alternatives, like bank deposits and direct investments in money market instruments like T-bills and commercial paper. In the long-expected, upcoming period of declining short term interest rates, we believe that market conditions for money market strategies will continue to be favorable compared to direct market rates and bank deposit rates."
ICI's latest "Money Market Fund Assets" report shows money market mutual fund assets rebounding after falling sharply the prior week due to tax payments. MMF assets are up by $91 billion, or 1.9%, year-to-date in 2024 (through 4/24/24), with Institutional MMFs down $20 billion, or -0.6% and Retail MMFs up $111 billion, or 6.6%. Over the past 52 weeks, money funds have risen by $715 billion, or 13.6%, with Retail MMFs rising by $502 billion (26.4%) and Inst MMFs rising by $262 billion (7.9%). (Note: Thanks to those who visited with us at the `The New England AFP Annual Conference!)
With less than 2 months to go until Crane's Money Fund Symposium will be held in Pittsburgh, June 12-14, we are also starting preparations for our 10th Annual European Money Fund Symposium. The preliminary agenda has been released and registrations are now being taken for this year's European event, which will take place Sept. 19-20 at the Hilton London Tower Bridge in London, England. We provide more details on both shows below, and feel free to contact us for more information. (Note: If you haven't registered yet for the U.S. Money Fund Symposium, you can still do so via www.moneyfundsymposium.com. Note too: For those attending The New England AFP Annual Conference, April 25-26 in Boston, we hope to see some of you at the show!)
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