U.S. asset managers may be poised to see a US$5-billion increase in annual fees as interest rates rise and revenue from money market funds surge, suggests a new report from New York-based Moody’s Investors Service Inc.

Specifically, the credit-rating agency’s report indicates that revenue from money market funds could more than double, as interest rates rise and fund firms cut back on fee waivers in the year ahead. Historically, fund managers have waived fees to achieve a competitive edge, the Moody’s report notes, adding that this been particularly common since the decline in yields in 2008.

However, as interest rates on short-term securities started rising in the first half of 2015, the yield on money market fund portfolios has increased, allowing fund managers to reduce fee waivers.

Currently, the U.S. asset-management industry collects about US$3.8 billion in fees on these funds, the Moody’s report notes. So, a US$5-billion fee influx would more than double that revenue — although some of this would flow through to distributors and other fund service providers.

“Because of the low yield environment of the past several years, many U.S. fund sponsors chose to waive management fees as part of their efforts to lower expenses and maintain a positive net yield,” says Neal Epstein, vice president at Moody’s, in a statement. “As rates on commercial paper, CDs and other short-term securities start picking up again, the big asset managers are positioned to collect up to $5 billion dollars in fees, on a gross basis.”

The projected revenue increase would be credit positive for several large asset-management firms, the Moody’s report says, such as BlackRock Inc., Fidelity Investments Corp. and Invesco Ltd.