Money market mutual fund assets continued their record run in the first month of 2024, normally the weakest month of the year seasonally for MMFs. ICI's latest weekly "Money Market Fund Assets" report shows MMF assets jumped to break $6.0 trillion for the first time ever over the past week. Assets are up by $115 billion, or 2.4%, year-to-date in 2024, with Institutional MMFs up $57 billion, or 1.4% and Retail MMFs up $57 billion, or 3.4%. Over the past 52 weeks, money funds have risen a massive $1.180 trillion, or 24.5%, with Retail MMFs rising by $585 billion (33.2%) and Inst MMFs rising by $595 billion (19.4%).

The weekly release says, "Total money market fund assets increased by $41.68 billion to $6.00 trillion for the week ended Wednesday, January 31, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $31.58 billion and prime funds increased by $7.32 billion. Tax-exempt money market funds increased by $2.78 billion." ICI's stats show Institutional MMFs rising $33.1 billion and Retail MMFs rising $8.6 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.888 trillion (81.5% of all money funds), while Total Prime MMFs were $993.7 billion (16.6%). Tax Exempt MMFs totaled $119.0 billion (2.0%).

ICI explains, "Assets of retail money market funds increased by $8.62 billion to $2.35 trillion. Among retail funds, government money market fund assets increased by $4.72 billion to $1.53 trillion, prime money market fund assets increased by $2.07 billion to $713.48 billion, and tax-exempt fund assets increased by $1.83 billion to $107.66 billion." Retail assets account for over a third of total assets, or 39.1%, and Government Retail assets make up 65.0% of all Retail MMFs.

They add, "Assets of institutional money market funds increased by $33.06 billion to $3.65 trillion. Among institutional funds, government money market fund assets increased by $26.86 billion to $3.36 trillion, prime money market fund assets increased by $5.25 billion to $280.22 billion, and tax-exempt fund assets increased by $948 million to $11.37 billion." Institutional assets accounted for 60.9% of all MMF assets, with Government Institutional assets making up 92.0% of all Institutional MMF totals.

According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $93.9 billion in January to a record $6.394 trillion. Assets rose $32.7 billion in December, jumped $226.4 billion in November but fell by $31.9 billion in October. They rose $93.9 billion in September, $98.3 billion in August and $34.7 billion in July. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $400 billion lower than Crane's asset series.

In other news, Investment News writes, "Client assets in cash products ended 2023 at twice the normal level: Ameriprise." The article tells us, "The stock market has been surging this year, but investors had started out 2024 with a lot of money in cash products, Ameriprise executives said during the firm's earnings call Thursday. Cash-related holdings totaled $81.5 billion among the clients of Ameriprise advisors at the end of 2023, representing about 9 percent of the total client assets of $901 billion reported by the firm."

They quote Ameriprise CFO Walter Berman, "It is sort of the double the amount clients are holding compared to where they used to be. They're getting a 5-plus [percentage] yield on it just to sit tight, unsure about the market moves ... It's not an uncomfortable thing for clients of our advisors to keep cash there."

The piece says, "Of the $81.5 billion in cash-related products, more than half was in third-party money market products or brokered CDs, according to the firm. As it develops more bank products, there will be an opportunity to capture a bigger share of those client assets, Berman said. But Ameriprise also expects that a considerable portion of the assets currently in cash will go to wrap accounts and asset allocation products as advisors and their clients seek higher returns through stock exposure."

See the company's press release, "Ameriprise Financial Reports Fourth Quarter 2023 Results," and the "Ameriprise Financial, Inc. Q4 2023 Earnings Call Transcript" for more. On the call, CFO Berman states, "Total cash balance, including third-party money market funds and brokered CDs reached a new high this quarter at $81.5 billion. We have seen stability in our underlying client cash positions with free cash up 4% sequentially. This stabilization has continued into January. Additionally, we continue to see new money flowing into money market funds and brokered CDs as well as into our certificates. This creates a significant redeployment opportunities as markets normalize for clients to put money back to work in wrap and other products on our platform over time."

During the Q&A on the call, Berman tells us, "So right now, we are seeing stability and really little growth in our sweep accounts. So we feel very comfortable about it. And we still have buffer there. So we are evaluating that, but we'll be more measured as we go forward because we've certainly placed and shifted a substantial amount. But you would see that it will be increasing but at a slower pace as we evaluate these sweep balances that support that. So I would say that it will be increasing but at a slower pace."

Asked another question on cash on the sidelines, CEO James Cracchiolo responds, "So those balances are in money markets and brokerage CDs short term that will roll off. And so as they do, I think advisers will evaluate whether they put that back into the market. And if they did, I would probably say a portion of that would go back, a reasonable portion, will go back most likely into wrap type programs, imbalanced type portfolios, which would include both equities and fixed income, et cetera, alternatives. On the other side of it, there, we’ve seen a bit of a pickup in some transactional activity as well in the fourth quarter. So some of that will go back into transactional type activities as they look at longer duration type products as well. So again, that's really as advisers look at the market and they put money to work over time for their clients."

Cracchiolo continues, "It is sort of like double the amount that clients are holding usually compared to where they used to be. And again, advisers look at it with their clients and they're getting a 5-plus yield on it, just to sit tight, with unclear about the market moves, etc. So I do believe that over time, that money will be redeployed, but holding at higher rates right now, it's not an uncomfortable thing for clients that are advised us to keep extra cash there."

Berman adds, "In the sweep accounts, and this is as of 2 days ago, we have seen a complete stabilization from that standpoint, a little increase. So we're obviously observing -- understand the seasonality of it. But certainly, it's what I indicated, and that’s through 2 days ago."

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