The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (a.k.a. "Flow of Funds") late last week. Among the 4 tables it includes on money market mutual funds, the Third Quarter 2024 edition shows that Total MMF Assets increased by $291 billion to $6.839 trillion in Q3'24. The Household Sector, by far the largest investor segment with $4.311 trillion, saw the biggest asset increase in Q3, followed by Nonfinancial Corporate Businesses. The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also showed noticeable increases for the Other Financial Business (formerly Funding Corps) and Mutual Funds categories in Q3 2024. (Note: For those attending our upcoming Money Fund University, which is Dec. 19-20, 2024 in Providence, safe travels! See you Thursday!)
Mutual funds, Rest of World, Exchange-traded funds, Life Insurance Companies, State & Local Governments and Nonfin Noncorporate Business categories saw small asset increases in Q3, while the Private Pension Funds category saw the only asset decrease last quarter. Over the past 12 months, the Household Sector, Nonfinancial Corporate Business, Other Financial Business and Rest of World categories showed the biggest asset increases, while Private Pension Funds saw the biggest asset decrease.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $291 billion, or 4.4%, in the third quarter to $6.839 trillion. The largest segment, the Household sector, totals $4.311 trillion, or 63.0% of assets. The Household Sector increased by $177 billion, or 4.3%, in the quarter. Over the past 12 months through September 30, 2024, Household assets were up $490 billion, or 12.8%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $971 billion, or 14.1% of the total. Assets here increased by $49 billion in the quarter, or 5.3%, and they've increased by $104 billion, or 11.9%, over the past year. Other Financial Business was the third-largest investor segment with $504 billion, or 7.4% of money fund shares. This category jumped $27 billion, or 5.5%, in the latest quarter. Other Financial Business, which we believe includes Securities Lending, has increased by $23 billion, or 4.9%, over the previous 12 months.
The fourth-largest segment, Mutual Funds (a recent addition to the tables), held $235 billion (3.4%). The Rest of World moved up to fifth place in market share among investor segments with 2.9%, or $197 billion, Private Pension Funds was the 6th largest category with 2.8% of money fund assets ($194 billion); it was down $2 billion for the quarter and down $4 billion, or -1.9% over the last 12 months. while Nonfinancial Noncorporate Business held $141 billion (2.1%), Life Insurance Companies held $104 billion (1.5%), State & Local Governments held $78 billion (1.1%), Property-Casualty Insurance held $47 billion (0.7%), Exchange-traded Funds held $36 billion (0.5%), and State & Local Govt Retirement held $20 billion (0.3%) according to the Fed's Z.1 breakout.
The Fed's "Flow of Funds" Table L.121 shows "Money Market Mutual Funds" largely invested in “Security Repurchase Agreements” with $2.688 trillion, or 39.3% and "Debt Securities," or Credit Market Instruments, with $3.887 trillion, or 56.8% of the total. Debt securities includes: Open market paper ($293 billion, or 4.3%; we assume this is CP), Treasury securities ($2.660 trillion, or 38.9%), Agency and GSE-backed securities ($794 billion, or 11.6%), Municipal securities ($131 billion, or 1.9%) and Corporate and foreign bonds ($9 billion, or 0.1%).
Another large MMF position in the Fed's series includes `Time and savings deposits ($314 billion, or 4.6%). Money funds also hold minor positions in Miscellaneous assets ($-54 billion, or -0.8%) and Foreign deposits ($3 billion, 0.0%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $46 billion.
During Q3, Debt Securities were up $276 billion. This subtotal included: Open Market Paper (up $12 billion), Treasury Securities (up $210 billion), Agency- and GSE-backed Securities (up $52 billion), Corporate and Foreign Bonds (up $3 billion) and Municipal Securities (down $1 billion). In the third quarter of 2024, Security Repurchase Agreements were up $74 billion, Foreign Deposits were down $2 billion, Time and Savings Deposits were up by $9 billion, and Miscellaneous Assets were down $66 billion.
Over the 12 months through 9/30/24, Debt Securities were up $1.006 trillion, which included Open Market Paper (unchanged), Treasury Securities (up $893B), Agencies (up $104B), Municipal Securities (up $10B), and Corporate and Foreign Bonds (unchanged). Foreign Deposits (down $8 billion), Time and Savings Deposits were up $21B, Securities repurchase agreements were down $260 billion and Miscellaneous Assets were down $63B.
The L.121 table shows `Stable NAV money market funds with $6,493 billion, or 94.9% of the total (up $368B or 6.0% in Q3 and up $992 trillion or 18.0% over 1-year), and Floating NAV money market funds with $347 billion, or 5.1% (down $77.3B or -18.2% in Q3 and down $296B or -46.0% over 1-year). Government money market funds total $5.547 trillion, or 81.1% (up $320.3B or 6.1% in Q3 and up $786B or 16.5% over 1-year), Prime money market funds total $1.158 trillion, or 16.9% (down $30.3B or -2.6% in Q3 and down $100B or -8.0% over 1-year) and Tax-exempt money market funds $134B, or 2.0% (up $0.8B or 0.6% in Q3 and up $11B or 8.7% last year).
Note that the Federal Reserve made some changes to its Z.1 tables several years ago. Describing a "Money market funds sector data source change," the report says, "The money market mutual funds (MMF) sector (tables F.121 and L.121) has been revised beginning 2010:Q4 to reflect a change in data source to Securities and Exchange Commission Form NMFP. The level of assets and shares outstanding of the sector have increased due to the inclusion of private placement MMFs in the source data. Changes in the level due to changes in the data source in 2010:Q4 are recorded as other volume changes in the Financial Accounts."
On "Mutual funds sector holdings of money market funds," Z.1 tells us, "The mutual funds sector (tables F.122 and L.122) has been revised beginning 2010:Q4 to reflect holdings of money market funds not previously reported on the tables. In addition, holdings of repurchase agreements, commercial paper, corporate bonds, and miscellaneous assets have been revised. Additional and revised holdings are estimated using data from Morningstar and Investment Company Institute.... The exchange-traded funds sector (tables F.124 and L.124) has been revised beginning 2010:Q4 to reflect holdings of money market funds not previously reported on the tables."
