ab29 December 2023Global Research and Evidence LabUS Brokers and Asset ManagersWM Rate Monitor: SCHW MMF pick up into year-end; CD rates compress more than SOFRSCHW weekly MMF flows pick up but only to LT avg. The daily average pace of inflows over the last week was $664 mn, reflecting an increase from last week's $153 mn, but remains roughly in line with the longer-term average pace of $675 mn. That said, we were not surprised to see a pick-up in flows as we expected a seasonal pick up in cash build due to tax loss harvesting, annual financial planning, etc. Flows may remain volatile into the beginning of next year. Our key takeaways this week are: 1. In December, daily inflows were approximately 62% below the monthly LT average.2. Despite elevated flows from last week, they are still roughly in line with the weekly LT average despite seasonality. 3. We anticipated a rise in flows by year-end, given the usual cash buildup in December, but the pick-up was less than expected, only getting to the LT weekly avg. This increases our confidence in the end of sorting, but we expect flows to remain volatile in the first half of the new year.CD rates move lower across the board; Competition appears to be easing This week, CD rates were down at AMP, SCHW, and RJF. AMP was the most aggressive of the group, lowering CD rates an average of 31 bps across tenors which are now 71 bps below their all-time high on Nov 15th. Longer tenors saw the brunt of the decline with the 36-month tenor declining 50 bps from 4.60% to 4.10%. SCHW OneSource lowered their CD rates by 19 bps on avg. and mixed across tenors. Lastly, RJF lowered their CD rates by one bp on average across tenors reducing their 90-day, 36 & 48 month tenors by 5 bps. Notably, they raised their longest tenor CD (60-month) by 10 bps from 3.85% to 3.95%. During the same period, 6-mo. SOFR was down 3 bps and 1-yr. SOFR was down 3 bps.This report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES, including information on the Quantitative Research Review published by UBS, begin on page 8. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.EquitiesAmericasFinancial ServicesBrennan Hawken, CPAAnalyst brennan.hawken@ubs.com +1-212-713 9439Adam Q. Beatty, CFAAnalyst adam.beatty@ubs.com +1-212-713 2481Benjamin Rubin, CFA, CPAAssociate Analyst benjamin.rubin@ubs.com +1-212-713 2471Marc PalucciAssociate Analyst marc.palucci@ubs.com +1-212-713 4879 US Brokers and Asset Managers 29 December 2023ab 2Charles Schwab - Money Market Fund FlowsFigure 1: Fund flows weekly and monthlyFund flow...
