The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (a.k.a. "Flow of Funds") yesterday, and among the 4 tables it includes on money market mutual funds, the Fourth Quarter 2024 edition shows that Total MMF Assets increased by $404 billion to $7.243 trillion in Q4'24. The Household Sector, by far the largest investor segment with $4.600 trillion, saw the biggest asset increase in Q4, 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 Rest of the World categories in Q4 2024. (Note: For those attending our upcoming Bond Fund Symposium, which is March 27-28, 2025 in Newport Beach, Calif., we look forward to seeing you! See you in two weeks!)
Rest of World, State & Local Governments, Exchange-traded funds, Life Insurance Companies and Nonfin Noncorporate Business categories saw small asset increases in Q4, while the Mutual funds and Private Pension Funds categories saw the only asset decreases 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 Mutual funds and Private Pension Funds saw the biggest asset decreases.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $404 billion, or 5.9%, in the fourth quarter to $7.243 trillion. The largest segment, the Household sector, totals $4.600 trillion, or 63.5% of assets. The Household Sector increased by $275 billion, or 6.4%, in the quarter. Over the past 12 months through December 31, 2024, Household assets were up $596 billion, or 14.9%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $1.036 trillion, or 14.3% of the total. Assets here increased by $65 billion in the quarter, or 6.7%, and they've increased by $141 billion, or 15.8%, over the past year. Other Financial Business was the third-largest investor segment with $544 billion, or 7.5% of money fund shares. This category jumped $46 billion, or 9.2%, in the latest quarter. Other Financial Business, which we believe includes Securities Lending, has increased by $92 billion, or 20.4%, over the previous 12 months.
The fourth-largest segment, Mutual Funds (a recent addition to the tables), held $217 billion (3.0%). The Rest of World stayed in fifth place in market share among investor segments with 2.9%, or $213 billion, Private Pension Funds was the 6th largest category with 2.6% of money fund assets ($192 billion); it was down $2 billion for the quarter and down $4 billion, or -2.2% over the last 12 months. while Nonfinancial Noncorporate Business held $142 billion (2.0%), Life Insurance Companies held $106 billion (1.5%), State & Local Governments held $83 billion (1.2%), Property-Casualty Insurance held $49 billion (0.7%), Exchange-traded Funds held $38 billion (0.5%), and State & Local Govt Retirement held $23 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 $2.620 trillion, or 36.2% and "Debt Securities," or Credit Market Instruments, with $4.327 trillion, or 59.7% of the total. Debt securities includes: Open market paper ($299 billion, or 4.1%; we assume this is CP), Treasury securities ($2.995 trillion, or 41.3%), Agency and GSE-backed securities ($886 billion, or 12.2%), Municipal securities ($139 billion, or 1.9%) and Corporate and foreign bonds ($8 billion, or 0.1%).
Another large MMF position in the Fed's series includes `Time and savings deposits ($264 billion, or 3.6%). Money funds also hold minor positions in Miscellaneous assets ($29 billion, or 0.4%) and Foreign deposits ($4 billion, 0.1%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $47 billion.
During Q4, Debt Securities were up $439 billion. This subtotal included: Open Market Paper (up $6 billion), Treasury Securities (up $335 billion), Agency- and GSE-backed Securities (up $93 billion), Corporate and Foreign Bonds (down $2 billion) and Municipal Securities (up $7 billion). In the fourth quarter of 2024, Security Repurchase Agreements were down $68 billion, Foreign Deposits were up $1 billion, Time and Savings Deposits were down by $50 billion, and Miscellaneous Assets were up $82 billion.
Over the 12 months through 12/31/24, Debt Securities were up $912 billion, which included Open Market Paper (down $3B), Treasury Securities (up $725B), Agencies (up $178B), Municipal Securities (up $9B), and Corporate and Foreign Bonds (up $2B). Foreign Deposits (down $2 billion), Time and Savings Deposits were down $25B, Securities repurchase agreements were down $46 billion and Miscellaneous Assets were up $46B.
The L.121 table shows `Stable NAV money market funds with $6,905 billion, or 95.3% of the total (up $412.5B or 6.4% in Q4 and up $1.177 trillion or 20.6% over 1-year), and Floating NAV money market funds with $338 billion, or 4.7% (down $8.4B or -2.4% in Q4 and down $292B or -46.3% over 1-year). Government money market funds total $5.911 trillion, or 81.6% (up $364B or 6.6% in Q4 and up $991B or 20.1% over 1-year), Prime money market funds total $1.191 trillion, or 16.4% (up $33.2B or 2.9% in Q4 and down $115B or -8.8% over 1-year) and Tax-exempt money market funds $141B, or 1.9% (up $6.9B or 5.1% in Q4 and up $10B or 7.5% 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."
