Data from iMoneyNet shows 91% of US money market funds waived all or a portion of their fees in February of this year to prevent passing along bad returns to their clients.
That percentage fell to 51% by June, and additional funds are anticipated to begin charging full fees in the coming months.
The change “will provide a significant tail wind because rising rates mean fund providers will finally be able to stop subsidising money market funds”, Tim Armour, chief executive of Capital Group, told the Times. His firm manages US$27bn in money market funds.
In their recently released second-quarter financial results, BlackRock and State Street, two of the largest global money fund providers, highlighted improvements in their revenue from these funds and other cash management products.
BlackRock announced that it is now charging all its customers the full price, after waiving more than US$500 million in fees on money products in 2021. Cash product revenue for the quarter increased by 155% year over year to US$232 million. The largest money manager in the world also disclosed US$21 billion in net cash inflows, bringing the total cash under administration to $740 billion.
