ICI's latest "Money Market Fund Assets" report shows money fund assets surging $42.1 billion in the last week of the year to a record $6.848 trillion, after jumping $54.7 billion the previous week. Money fund assets have risen in 16 of the last 22, and 27 of the last 37, weeks, increasing by $544.2 billion (or 8.6%) since the Fed cut on 9/18 and increasing by $870.3 billion (or 14.6%) since April 24. MMF assets are up by $961 billion, or 16.3%, in 2024 (through 12/31/24), with Institutional MMFs up $519 billion, or 14.4% and Retail MMFs up $443 billion, or 19.3%. (Note: Thanks to our subscribers and readers for all your support in 2024 and best of luck in 2025. Happy New Year!)
ICI's weekly release says, "Total money market fund assets increased by $42.05 billion to $6.85 trillion for the week ended Tuesday, December 31, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $41.28 billion and prime funds decreased by $751 million. Tax-exempt money market funds increased by $1.52 billion." ICI's stats show Institutional MMFs increasing $23.4 billion and Retail MMFs increasing $18.8 billion in the latest week. Total Government MMF assets, including Treasury funds, were $5.633 trillion (82.3% of all money funds), while Total Prime MMFs were $1.079 trillion (15.8%). Tax Exempt MMFs totaled $135.7 billion (2.0%).
It explains, "Assets of retail money market funds increased by $18.78 billion to $2.73 trillion. Among retail funds, government money market fund assets increased by $12.07 billion to $1.74 trillion, prime money market fund assets increased by $5.22 billion to $864.65 billion, and tax-exempt fund assets increased by $1.49 billion to $124.51 billion." Retail assets account for over a third of total assets, or 39.9%, and Government Retail assets make up 63.8% of all Retail MMFs.
They add, "Assets of institutional money market funds increased by $23.26 billion to $4.12 trillion. Among institutional funds, government money market fund assets increased by $29.21 billion to $3.89 trillion, prime money market fund assets decreased by $5.98 billion to $214.02 billion, and tax-exempt fund assets increased by $28 million to $11.21 billion." Institutional assets accounted for 60.1% of all MMF assets, with Government Institutional assets making up 94.5% of all institutional MMF totals.
According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets rose by $110.9 billion in December through 12/31 to a record $7.174 trillion. Assets rose by $200.5 trillion in November, $97.5 billion in October, $149.8 billion in September, $109.7 billion in August, $16.6 billion in July, $15.7 billion in June and $91.4 billion in May. They declined by $15.8 billion in April and $68.8 billion in March. They rose $72.1 billion in February, $93.9 billion in January and $32.7 billion last December. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're about $340 billion lower than Crane's asset series.
TheStreet.com writes on "Money Market ETFs: Yes, they’re a Thing Now, But Read this First Before Buying. They comment, "Managing cash has never been easier, thanks to the rise of ETFs. If your goal is to keep your principal safe while earning a little on the side, you've already had solid options like Treasury bill ETFs or ultra-short-term bond ETFs. Both come with low credit risk, monthly distributions, and yields tied to prevailing short-term interest rates."
The brief continues, "Now, there's a new player on the block: money market ETFs. The Texas Capital Government Money Market ETF (MMKT) debuted on September 24, 2024, and brings the simplicity of money market investing into an ETF structure. As of December 19, it boasts a 4.49% seven-day SEC yield with a reasonable 0.2% expense ratio."
It explains, "But before you invest, it's important to understand that money market ETFs don't function quite the same way as the money market mutual funds you might already know. The ETF structure adds some quirks that could catch you off guard. Here's what you need to know before making the leap.... MMKT ... is a different story. As an ETF, it doesn't have a fixed NAV of $1 and trades throughout the day on an exchange. That distinction introduces some nuances you won't experience with a money market mutual fund."
The piece adds, "This means you could, in theory, experience an unrealized loss with MMKT. For example, if you buy shares just before the ex-distribution date -- when the NAV is at its peak -- you'll see a drop in value that might take time to recoup, depending on when you sell. Additionally, there's the matter of the bid-ask spread."
For more see our Nov. 18 Link of the Day, "FT on BlackRock Money Market ETFs," our Nov. 12 Link of the Day, "BlackRock Files for Money Market ETFs," and our Sept. 26 Link of the Day, "Texas Capital Launches Govt MM ETF."
Finally, a release titled, "SIFMA Recommends Early Market Close on January 9, 2025, for the National Day of Mourning in Honor of Former President Carter" explains, "SIFMA joins the nation in expressing its condolences on the passing of former President Jimmy Carter.... SIFMA today recommended an early market close at 2:00 pm EST on January 9, 2025, for all fixed-income cash markets in recognition of the National Day of Mourning in honor of the 39th President of the United States. This is in keeping with SIFMA's policy on unscheduled changes in trading hours. This recommendation applies to trading of U.S. dollar-denominated government securities, mortgage- and asset-backed securities, over-the-counter investment-grade and high-yield corporate bonds, municipal bonds and secondary money market trading in bankers' acceptances, commercial paper and Yankee and Euro certificates of deposit. SIFMA's recommended early and full market closes are recommendations only; each member firm should decide for itself whether its fixed income departments remain open for trading. All SIFMA recommendations are subject to change due to market conditions." (Note: We'll see and we'll keep you posted, but `Crane Data expects most money market funds to close for the Jan. 9 Day of Mourning.)
