French banking giants BNP Paribas, Societe Generale, and Credit Agricole remained among the largest investment positions in money market funds according to Crane Data's most recent Money Fund Portfolio Holdings report. Exposure to the three banks actually increased slightly in July, with gains in BNP Paribas and Societe Generale compensating for a $10.8 billion drop in Credit Agricole debt. Our latest Money Fund Portfolio Holdings report, which will be released later Friday to subscribers to Crane Data's Money Fund Wisdom product suite, also shows that money funds held over $100 billion in uninvested and "cash" assets as of month-end July.
Excluding U.S. Treasury debt holdings (which total $311.7 billion) and U.S. Government Agency securities ($319.9 billion), the 25 largest holdings among taxable money market mutual funds (as of July 31, 2011) include: Barclays Bank ($86.8 billion), BNP Paribas ($85.5B), Deutsche Bank AG ($75.7B), Societe Generale ($51.1B), RBS ($49.3B), Credit Suisse ($43.0B), Bank of America ($41.3B), Rabobank ($39.5B), Credit Agricole ($38.3B), Westpac Banking Corp. ($37.8B), RBC ($37.4B), JP Morgan ($36.6B), UBS AG ($36.1B), ING Bank ($35.9B), Goldman Sachs ($33.2B), Bank of Nova Scotia ($31.8B), Citi ($31.8), National Australia Bank Ltd. ($30.1B), HSBC ($27.1B), Svenska Handelsbanken AB ($24.3B), Nordea Bank ($24.0B), Bank of Tokyo-Mitsubishi UFJ Ltd. ($23.1B), DnB NOR Bank ASA ($18.4B), Commonwealth Bank of Australia ($18.3B), and Natixis ($17.2B).
France continues to represent the largest non-U.S. parented holdings in money market mutual funds with approximately 7.3% of the $2.1 trillion in taxable holdings tracked by Crane. Canada has moved into second place (5.6%), followed by the U.K. (4.0%), Netherlands (3.4%), Japan (2.7%), Germany (2.3%), Switzerland (2.2%), Sweden (1.9%), Finland (1.2%), and Norway (0.9%). Money funds reduced their already small positions, but continued to have marginal exposure to Spain (0.24%) and Italy (0.04%). Total Eurozone holdings accounted for 13.9% of all taxable holdings, while a broader count of all of Europe (including the U.K., Switzerland and the Nordic countries) totalled 24.3%. (Note of course that money fund holdings turn over rapidly, so the July 31 numbers many have changed substantially by now.)
Certificates of Deposit remained the largest component of taxable money fund holdings in July with $474.0 billion (22.6%), while Repurchase Agreements rank second with a total of $439.0 billion (20.9%). (The SEC breaks Repo into Government Agency Repurchase Agreement, 9.7% of assets, Other Repurchase Agreements, 5.7%, and Treasury Repurchase Agreements, 5.5%.) `Commercial Paper totalled $339.1 billion (Financial Company Commercial Paper accounts for 9.0%, Asset Backed Commercial Paper accounts for 5.1%, and Other Commercial Paper accounts for 2.1%). Government Agency Debt totalled $319.9 billion (15.3%) and Treasury Debt totalled $311.2 billion (14.8%), and a number of "Other" holdings (including Insurance Company Funding Agreement, Investment Company, Other, Other Instrument, Other Instrument (Time Deposit), Other Municipal Debt, Other Note, and Variable Rate Demand Note) totalled 10.2%.
Total assets in our Money Fund Portfolio Holdings taxable collection dropped by $189.2 billion in July, while our Money Fund Intelligence XLS monthly shows total assets in funds dropped by $103.0 billion. We presume the $86.2 billion difference in "uninvested cash" or assets not listed among the usual portfolio holdings. An additional $17 billion appears on various fund listings as "Cash", so we estimate that $103.2 billion in total was held in unlimited FDIC insurance noninterest bearning transaction accounts at custodial banks. (This was one of the reasons behind BNY Mellon's recent decision to charge additional fees on "extraordinary deposits" -- see our Aug. 5 News "Media Feeding Frenzy Over BNY Mellon Extraordinary Deposits Charge".)
Note that Crane Data has been tracking and publishing Money Fund Portfolio Holdings since the SEC began mandating standardized monthly postings of holdings on fund company websites. We exclude Treasury and Government Agency Repurchase Agreements from the above totals, but include Other Repurchase Agreements, Certificates of Deposits, and Commercial Paper (Asset Backed, Financial Company and Other). We recently added "Country" and "Issuer" tagging to the SEC's mandated fields, and we continue to refine and revise our categorization schemes.
Also, in other news, see Bloomberg's "Legg Mason Says It Won't Renew French Debt Held in Money Funds", which quotes Western Asset Portfolio Manager Kevin Kennedy, "Despite the fact that the banks are money good and there's no credit risk, within the money fund world we are susceptible to headline risk.... France has been identified as the big risk going forward should the dominoes start to fall."
