Debbie Cunningham: I can start to answer those questions. From an ultrashort perspective and it definitely pertains to where we are from an interest rate standpoint in the marketplace. Interest rates continued to go up in the fourth quarter by 75 basis points and then again 50 basis points in December. The expectation is, they’ll continue to go up more modestly, but hold at a higher level in 2023. And when you see that sort of increase in rates in the marketplace generally, anything outside of liquidity products, i.e. money market products or cash are going to see flows going in the opposite direction. Those flows can come out of the institutional side, the retail side, corporate. So, there’s generally speaking, a broad-based exit that has slowed down as the year has progressed.
And in products even like Microshorts that got money in that basically is offsetting some of what we’re seeing in the, sort of little bit further out the yield curve, the ultrashort types of products. From a money market fund perspective, the mix continues to be obviously predominantly in the government sector. However, where we experienced on a percentage basis, the most amount of growth during 2022 was in the sectors and that’s simply a result of being above zero at this point and therefore the spread between government and those other categories widening out as interest rates themselves have increased. When you look at it on a quarter-over-quarter basis, the fourth quarter always has a huge amount of inflows not always, but for the most part has a large amount of inflows in the second half of December, let’s call it, it’s window dressing, as well as tax purpose issues that many firms are trying to do and ultimately this results in inflows into the government in particular money market funds during the second half of December, some of which then goes out, generally the first quarter of 2023 sees outflows out of those products.
Because of increasing interest rates, however, the other categories prime, in particular, has continued on a percentage basis to offset those flows in a pretty decided way.
Tom Donahue: And Mike, just on the separate account growth into January, you mentioned some seasonality there and that does come into play. That category of asset for us is dominated by large state cash pools that we manage. And so, it has a regular pattern of increasing when tax receipts are made at year-end, you know through the middle of the second quarter typically and then that tends to go down over the latter half of the year, but it’s fallen, it’s reached higher highs and higher lows. We’ve had a lot of underlying success both because of a favorable macro for money market yields and also some effective work that we’ve done with those clients to increase utilization of those pools.
Mike Brown: Okay, great. Thank you for taking my questions.
Operator: Your next question for today is a follow-up question coming from Patrick Davitt. Patrick, your line is live.
Patrick Davitt: Hey, thanks for the follow-up. Just on the back of that question, I asked a similar question last quarter, but you €“ we keep hearing from some of your competitors that there is an expectation of a bigger surge into money fund flows from say deposits. And I know there’s always some seasonality noise from December to January, but are you still at the view that that big rotation is coming this year and what milestones are you really looking for, for that to really pick up?
