ICI's latest weekly "Money Market Fund Assets" report shows money fund assets falling $9.6 billion to $6.914 trillion, after rising $5.5 billion to a record $6.923 trillion the week prior and rising $44.9 billion two weeks prior. Money fund assets have risen in 20 of the last 29, and 31 of the last 44, weeks, increasing by $610.1 billion (or 9.7%) since the Fed cut on 9/18/24 and increasing by $936.2 billion (or 15.7%) since 4/24/24. MMF assets are up by $905 billion, or 15.1%, in the past 52 weeks (through 2/19/25), with Institutional MMFs up $475 billion, or 13.0% and Retail MMFs up $430 billion, or 18.2%. Year-to-date, MMF assets are up by $63 billion, or 0.9%, with Institutional MMFs up $2 billion, or 0.0% and Retail MMFs up $61 billion, or 2.2%. (Note: Register soon for our upcoming Bond Fund Symposium, which is March 27-28 in Newport Beach, Calif!)
ICI's weekly release says, "Total money market fund assets decreased by $9.55 billion to $6.91 trillion for the week ended Wednesday, February 19.... Among taxable money market funds, government funds decreased by $12.78 billion and prime funds increased by $1.42 billion. Tax-exempt money market funds increased by $1.81 billion." ICI's stats show Institutional MMFs decreasing $21.5 billion and Retail MMFs increasing $12.0 billion in the latest week. Total Government MMF assets, including Treasury funds, were $5.667 trillion (82.0% of all money funds), while Total Prime MMFs were $1.113 trillion (16.1%). Tax Exempt MMFs totaled $133.1 billion (1.9%).
It explains, "Assets of retail money market funds increased by $11.95 billion to $2.80 trillion. Among retail funds, government money market fund assets increased by $8.09 billion to $1.78 trillion, prime money market fund assets increased by $2.12 billion to $893.88 billion, and tax-exempt fund assets increased by $1.74 billion to $121.72 billion." Retail assets account for over a third of total assets, or 40.5%, and Government Retail assets make up 63.7% of all Retail MMFs.
They add, "Assets of institutional money market funds decreased by $21.50 billion to $4.12 trillion. Among institutional funds, government money market fund assets decreased by $20.87 billion to $3.89 trillion, prime money market fund assets decreased by $700 million to $219.46 billion, and tax-exempt fund assets increased by $68 million to $11.36 billion." Institutional assets accounted for 59.5% of all MMF assets, with Government Institutional assets making up 94.4% of all institutional MMF totals.
According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets have risen by $23.2 billion in February through 2/19/25 to $7.250 trillion. (They hit a record high on 1/7 at $7.266 trillion.) Assets rose by $52.8 billion in January, $110.9 billion in December, $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 last February. 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.
In other news, J.P. Morgan published its "Mid-Week US Short Duration Update," which is titled, "January MMF holdings update: less RRP, more non-fed repo and T-bills." It states, "In January, taxable MMFs experienced another strong month of growth, with balances rising by $90bn and AUMs almost reaching $7.2tn. Despite this increase, MMFs withdrew nearly $235bn from the ON RRP between year-end and the end of January, leaving only about $150bn in total cash at the facility."
JPM explains, "Instead, MMFs collectively shifted more of their portfolios to non-Fed repos during the month, adding an additional $166bn, or 7%, to reach $2.4tn. This increase partly reflects a reversal from the prior month, as dealers typically reduce repo exposure at year-end. As a result, MMFs increased allocations to dealers in the US by $65bn, in France by $55bn, and in the UK by $51bn. However, they reduced exposure to Canadian banks by approximately $70bn by the end of January, due to the fiscal quarter-end."
They tell us, "Interestingly, MMFs boosted their sponsored repo allocation by an additional $47bn month-over-month, setting a new record high of $876bn. Notably, MMFs have now allocated 37% of their entire repo holdings (excluding Fed) via FICC repo, up by 12% from a year ago ... as dealers position towards sponsored repo in anticipation of the clearing mandate."
The piece says, "Also, government MMFs actively allocated more of their portfolios to T-bills, increasing their holdings by nearly $90bn month-over-month, or a 4% rise.... This shift aligns with the increase in T-bill outstandings, which rose by $195bn, indicating that MMFs absorbed nearly 47% of the additional supply during the month.... [A]side from repo (excluding Fed), prime funds directed more of their portfolios towards credit products, specifically increasing allocations to banks located in the Eurozone by $49bn."
It adds, "To that end, at January-end levels, MMFs account for about 40% of total T-bill supply, hovering near the highest levels since May 2021. However, with the debt ceiling unresolved and T-bill supply beginning to turn negative towards the end of February, some MMFs might consider reallocating their T-bill holdings towards other avenues. To the extent that MMFs can, it's possible they will deploy more towards non-Fed repos, or the ON RRP as a backstop."
Finally, Fitch Ratings' "Local Government Investment Pools: 4Q24 comments, "Fitch Ratings' two local government investment pool (LGIP) indices experienced an aggregate asset increase in the fourth quarter of 2024 (4Q24), in line with seasonal flow trends. Total assets for the Fitch Liquidity LGIP Index and the Fitch Short-Term LGIP Index were $644.2 billion at the end of 4Q24, representing an increase of $39.2 billion qoq and an increase of $39.6 billion yoy. The Fitch Liquidity LGIP Index rose by 6.0% qoq and the Fitch Short-Term LGIP Index was up 7.4% qoq, compared to average increases of 7.2% and 12.1%, respectively, over the past three years during the fourth quarter."
The update continues, "Weighted average maturities (WAMs) increased in 4Q24 as the Fed implemented two more interest rate cuts in November and December, ending the year with a target range of 4.25% to 4.5%. The WAM of the Fitch Liquidity LGIP Index increased to 37 days, still higher than prime '2a-7' money market funds at 29 days. The Fitch Short-Term LGIP Index ended the quarter with a duration of 1.27 years, down 4% from last quarter. Both Fitch indices ended 4Q24 with decreased average yield profiles, with net yields averaging 4.53% for the Liquidity Index and 4.29% for the Short-Term Index."
It adds, "The Fitch Liquidity LGIP Index increased exposure to Government Agencies by 1.29% and reduced exposure to CP by 0.98% qoq. Overall exposure to Government Agencies, Supranational, and ABS increased by 2.25% qoq."
