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European 'AAAm' Money Market Fund Trends (First-Quarter 2025)

This report does not constitute a rating action.

Index data
Index name 7-day net yield (%) 30-day net yield (%) WAM(R)--days Total net assets (bil.) Credit quality (%) (A-1+/A-1)
S&P Global Ratings 'AAAm' euro MMFs 2.46 2.54 34 €271.5 61/39
S&P Global Ratings 'AAAm' sterling MMFs 4.43 4.44 42 £245.2 63/37
S&P Global Ratings 'AAAm' U.S. dollar MMFs 4.29 4.31 38 $704.0 69/31

'AAAm' Money Market Fund Indicators

S&P Global Ratings' 'AAAm' money market fund (MMF) indicators are metrics of Europe-domiciled funds that seek to maintain principal value and limit exposure to principal losses due to credit risk, as defined in our principal stability fund ratings criteria. These MMF indicators provide a benchmarking tool of the 'A-1+' credit quality, portfolio composition, maturity distribution, net asset movements, and yields of MMFs with a 'AAAm' principal stability fund rating (PSFR).

The MMF indicators demonstrate the investment practices of funds conforming to S&P Global Ratings' PSFR criteria. An individual fund's metrics below those of our 'AAAm' MMF indicators may indicate a more conservative approach to investment, while risk metrics well above the average may signal a more aggressive approach, albeit undertaken within the constraints of a 'AAAm' PSFR.

Market Comment

Money market funds continued to be attractive to investors in the first quarter of 2025, as Europe-domiciled MMFs rated by S&P Global Ratings reached an all-time high in terms of assets under management (AUM), totaling €1.2 trillion as of March 31, 2025. In the quarter, net assets in euro-denominated funds grew 3.2% to €271.5 billion, sterling-denominated funds were up 2.6% to £245.2 billion, and U.S. dollar-denominated funds saw growth of 3.4% with net assets totaling over $704 billion. This marks the fourth consecutive quarter-on-quarter growth for MMFs across the three currencies. When comparing net assets to the first quarter of 2024, MMFs in all three currencies have seen double-digit growth with euro funds (37.1%), sterling funds (10.3%), and U.S. dollar funds (15.5%).

The European Central Bank (ECB) and the Bank of England (BoE) cut interest rates in the first quarter of 2025, while the U.S. Federal Reserve (the Fed) left the federal funds rate unchanged with a target range of 4.25% to 4.5%. The ECB cut rates by 25 basis points (bps) at both its February and March policy meetings, lowering the deposit rate from 3.0% to 2.5%. The BoE reduced its bank rate by 25bps to 4.5% in February. Following the two rate cuts by the ECB, euro MMFs seven-day yields fell 49bps in the quarter, averaging 2.46%. Sterling MMFs yields dropped by 24bps, averaging 4.43%, while U.S. dollar-denominated funds average seven-day yields were 4.29%, a decline of 14bps from the previous quarter.

Weighted-average maturities (WAM) increased slightly in euro and sterling MMFs by two and three days, respectively. For U.S. dollar MMFs, their WAMs decreased by three days.

We consider credit quality to be a key factor in the stability of net asset value (NAV) and view the price of higher-rated assets as more stable than investments with lower ratings. In the first quarter, we saw average 'A-1+' credit quality slightly decrease across all three currencies. Euro-denominated MMFs saw average 'A-1+' credit quality drop to 61% from 62%, U.S. dollar funds to 71% from 69%, while sterling funds average 'A-1+' percentage dipped the most to 60% from 64%. While average 'A-1+' credit quality decreased for all three currencies, the credit quality in Europe-domiciled MMFs was still maintained above the 50% minimum requirement for 'AAAm' rated funds. Each week, we analyze the surveillance data, including credit metrics on asset levels, NAV per share, credit quality, diversification, duration, and redemption patterns.

Table 1

'AAAm' principal stability funds seven-day net yield (%)
Index June 2024 September 2024 December 2024 March 2025
S&P Global Ratings 'AAAm' euro MMFs 3.66 3.48 2.95 2.46
S&P Global Ratings 'AAAm' sterling MMFs 5.12 4.91 4.67 4.43
S&P Global Ratings 'AAAm' U.S. dollar MMFs 5.26 4.92 4.43 4.29

Table 2

'AAAm' principal stability funds weighted average maturity (In days)
Index June 2024 September 2024 December 2024 March 2025
S&P Global Ratings 'AAAm' euro MMFs 40 33 32 34
S&P Global Ratings 'AAAm' sterling MMFs 44 40 39 42
S&P Global Ratings 'AAAm' U.S. dollar MMFs 41 35 41 38

Table 3

AAAm' principal stability funds 'A-1+' credit quality (%)
Index June 2024 September 2024 December 2024 March 2025
S&P Global Ratings 'AAAm' euro MMFs 63 61 62 61
S&P Global Ratings 'AAAm' sterling MMFs 66 65 64 60
S&P Global Ratings 'AAAm' U.S. dollar MMFs 74 73 71 69

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Top 10 Europe-Domiciled 'AAAm' MMFs--Euro, Sterling, And U.S. Dollar--By Assets--Key Statistics

Table 4

'AAAm' euro principal stability funds
Rating Fund name Net assets (mil. €) --Portfolio maturity (days)-- Portfolio credit quality (%)
WAM (R) WAM (F) A-1+
AAAm Institutional Cash Series plc - BlackRock ICS Euro Liquidity Fund 85,426 45 66 61
AAAm BNP Paribas InstiCash EUR 1D LVNAV 31,982 45 79 59
AAAm JPMorgan Liquidity Funds - EUR Liquidity LVNAV Fund 30,265 42 62 66
AAAm Goldman Sachs Funds, plc - Goldman Sachs Euro Liquid Reserves Fund 23,280 43 52 56
AAAm HSBC Global Liquidity Funds plc - HSBC Euro ESG Liquidity Fund 22,822 28 75 55
AAAm DWS Deutsche Global Liquidity Series PLC - Deutsche Managed Euro Fund 20,417 30 44 51
AAAm MS Liquidity Funds – Euro Government Liquidity Fund 18,548 37 55 58
AAAm State Street Liquidity plc - State Street EUR Liquidity LVNAV Fund 8,317 35 53 61
AAAm Fidelity Institutional Liquidity Fund PLC - The Euro Fund 6,967 31 55 62
AAAm Institutional Cash Series plc - BlackRock ICS Euro Government Liquidity Fund 4,815 25 25 100
WAM (R)--Weighted average maturity to reset. WAM (F)--Weighted average maturity to final.

Table 5

'AAAm' sterling principal stability funds
Rating Fund name Net assets (mil. £) --Portfolio maturity (days)-- Portfolio credit quality (%)
WAM (R) WAM (F) A-1+
AAAm Institutional Cash Series plc - BlackRock ICS Sterling Liquidity Fund 42,834 52 68 65
AAAm LGIM Liquidity Funds PLC - LGIM Sterling Liquidity Fund 33,083 50 83 61
AAAm Insight Liquidity Funds PLC - ILF GBP Liquidity Fund 22,040 40 60 69
AAAm Aviva Investors Liquidity Funds PLC - Aviva Investors Sterling Liquidity Fund 20,019 55 80 50
AAAm Aberdeen Standard Liquidity Fund (Lux) - Sterling Fund 17,861 49 79 54
AAAm JPMorgan Liquidity Funds - GBP Liquidity LVNAV Fund 17,449 46 67 68
AAAm HSBC Global Liquidity Funds PLC - HSBC Sterling Liquidity Fund 15,182 37 60 59
AAAm Goldman Sachs Funds, plc - Goldman Sachs Sterling Liquid Reserves Fund 14,825 51 61 62
AAAm Northern Trust Global Funds PLC - The Sterling Fund 10,381 40 63 66
AAAm MS Liquidity Funds - Sterling Liquidity Fund 7,221 47 69 58
WAM (R)--Weighted average maturity to reset. WAM (F)--Weighted average maturity to final.

Table 6

'AAAm' U.S. dollar principal stability funds (EU-domiciled)
Rating Fund name Net assets (mil. $) --Portfolio maturity (days)-- Portfolio credit quality (%)
WAM (R) WAM (F) A-1+
AAAm JPMorgan Liquidity Funds - USD Liquidity LVNAV Fund 133,255 43 79 51
AAAm Institutional Cash Series plc - BlackRock ICS US Dollar Liquidity Fund 90,613 43 81 56
AAAm JPMorgan Liquidity Funds - USD Treasury CNAV Fund 68,026 36 50 99
AAAm Goldman Sachs Funds, plc - Goldman Sachs US$ Treasury Liquid Reserves Fund 57,846 56 73 100
AAAm MS Liquidity Funds - US Dollar Liquidity Fund 54,606 48 80 58
AAAm HSBC Global Liquidity Funds PLC - HSBC US Dollar Liquidity Fund 50,597 45 76 60
AAAm Goldman Sachs Funds, plc - Goldman Sachs US$ Liquid Reserves Fund 45,735 33 54 75
AAAm State Street Liquidity plc - State Street USD Liquidity LVNAV Fund 29,479 35 81 62
AAAm Institutional Cash Series plc - BlackRock ICS US Treasury Fund 24,799 27 43 100
AAAm Northern Trust Global Funds PLC - The US Dollar Fund 21,965 32 70 57
WAM (R)--Weighted average maturity to reset. WAM (F)--Weighted average maturity to final.

Primary Contact:Michael Mango, London 44-2071760485;
michael.mango1@spglobal.com
Secondary Contact:Andrew Paranthoiene, London 44-20-7176-8416;
andrew.paranthoiene@spglobal.com

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