The latest weekly asset totals from the Investment Company Institute show money fund assets falling for the fourth week in a row. ICI's Money Market Mutual Fund Assets says, "Total money market mutual fund assets decreased by $3.67 billion to $2.691 trillion for the week ended Wednesday, February 6, the Investment Company Institute reported today. Taxable government funds decreased by $320 million, taxable non-government funds decreased by $4.35 billion, and tax-exempt funds increased by $1.00 billion." Since the week ended Jan. 2, 2013, money fund assets have decreased by $13 billion, or 0.5%, with Institutional assets up $14 billion (0.8%) and Retail assets down $27 billion, or -2.9%.
ICI's weekly explains, Assets of retail money market funds increased by $70 million to $915.86 billion [34.0% of assets]. Taxable government money market fund assets in the retail category decreased by $200 million to $195.39 billion [7.26% of assets], taxable non-government money market fund assets decreased by $550 million to $520.38 billion [19.3%], and tax-exempt fund assets increased by $830 million to $200.10 billion [7.4%]."
It adds, Assets of institutional money market funds decreased by $3.74 billion to $1.776 trillion [66.0% of total assets]. Among institutional funds, taxable government money market fund assets decreased by $110 million to $726.08 billion [27.0%], taxable non-government money market fund assets decreased by $3.80 billion to $967.21 billion [35.9%], and tax-exempt fund assets increased by $170 million to $82.33 billion [3.1%]."
Since the week ended Jan. 9, 2013, ICI shows money fund assets declining by $25.0 billion, all of the drop due to Retail withdrawals. Money fund assets rose by $170 billion from Oct. 31, 2012, through Jan. 9 ($114 billion Inst and $54 billion Retail), and they remain up by $145 billion since 10/31/13 ($114 billion Inst and $30 billion Retail).
As we wrote in the February issue of our Money Fund Intelligence, the monthly asset inflows in October and November were the strongest monthly jumps since January 2009. Crane Data's monthly statistics show assets increased by $74.6 billion in October and $74.4 billion in December. But assets fell by $6.3 billion in January. Note that ICI's weekly series, which comes out on Thursday afternoons with data as of each Wednesday, is the broadest collection of money fund assets, while Crane Data's monthly and daily series each track different slightly smaller universes.
Though, as we discussed in the recent MFI, the expiration of TAG (the unlimited FDIC insurance transaction account guarantee program) undoubtedly played a role in the Institutional inflows, the amounts have been less than would be expected. We also believe other factors, such as the special dividends many companies paid ahead of the "fiscal cliff", played a role in recent flows. We quoted Citi Strategist Andrew Hollenhorst in MFI, "Rather than TAG or OT [Operation Twist], we think that the surge in cash entering short-term markets may be partially accounted for by a one-time $35.5 billion increase in personal dividend income in Q4 2012. With the fiscal cliff approaching, corporations sought to pay special dividends ahead of potential tax rises."