The Investment Company Institute released its "Worldwide Mutual Fund Assets and Flows Second Quarter 2012" yesterday, which says, "Mutual fund assets worldwide decreased 3.2 percent to $24.77 trillion at the end of the second quarter of 2012.... Money market funds worldwide experienced $53 billion of net outflows in the second quarter of 2012, which was somewhat slower than the $81 billion of net outflows recorded in the first quarter of 2012. The global outflow from money market funds in the second quarter was driven predominately by the outflows of $62 billion in the Americas, while the Asia and Pacific region registered inflows of $11 billion in the second quarter. Money market funds in Europe posted small net outflows of $1 billion in the second quarter after witnessing net inflows of $29 billion in the previous quarter."
The U.S. accounts for 54.8% of the worldwide total with $2.514 trillion (down $68 billion in Q2'12). France remained the second largest market with $483.2 billion (assets translated into U.S. dollars), or 10.5% of the market, while Ireland ($373.6 billion, or 8.2%) and Luxembourg ($360.4 billion, or 7.9%) ranked third and fourth. Australia ranked fifth with $324.9 billion (7.1%). Korea ($53.4B), China ($56.7B), Mexico ($55.6B), Brazil ($43.8B), and Canada ($32.0B) round out the top 10 largest markets for money funds worldwide.
France, Ireland and Luxembourg all lost over $17 billion in Q2 (down 3.4%, 4.4%, and 5.1%, respectively), while Australia showed gains (up $23.5 billion). China (up $9.5B) and India (up $12.8B) grew strongly, while Italy (down $10.9B) and Mexico (down $7.5B) contracted sharply. Europe overall saw assets fall by $69.7 billion, or 4.9%, on the quarter (to $1.36 trillion). To request the "Largest Money Fund Markets Worldwide spreadsheet we compile using data from ICI's Tables, e-mail us at firstname.lastname@example.org.
ICI also put out its weekly "Money Market Mutual Fund Assets report, which says, "Total money market mutual fund assets increased by $8.52 billion to $2.576 trillion for the week ended Wednesday, September 26, the Investment Company Institute reported today. Taxable government funds increased by $5.29 billion, taxable non-government funds increased by $4.74 billion, and tax-exempt funds decreased by $1.51 billion."
In other news, Fitch Ratings published a "Tri-Party Repo Primer for U.S. MMFs," which says, "The triparty repo market stands at about $1.8 trillion, with money market funds (MMF) providing about 35% of trading volume, according to data provided by the Tri-Party Repo Infrastructure Task Force and iMoneyNet. Prime MMFs invested about 18% of their assets (approximately $260 billion) in repos, while government MMFs allocated, on average, 38% of their assets (approximately $330 billion) to this market."
Fitch adds, "Prime MMFs' proportion of secured exposure in the form of repurchase agreements (repos) has seen a sharp rise, especially post-crisis. Fitch attributes this trend to a number of factors, including risk aversion, which has led to increased demand for secured assets and broadening collateral practices. Importantly, amendments to Rule 2a-7 contributed to demand for repos by requiring taxable MMFs to hold at least 10% of their assets in daily liquid instruments, such as overnight repos."
Finally, the report says, "Fitch believes that MMFs will be able to liquidate U.S. government and agency collateral without material loss of value. It is generally assumed this type of collateral will benefit from a flight to quality following a counterparty default. However, other types of collateral may become illiquid, leading to mark-to-market losses upon disposal."