The latest "Month-End Portfolio Holdings of Taxable Money Market Funds" report issued by the Investment Company Institute shows that money market mutual funds continued to add Treasury bills and securities, certificates of deposit, and Eurodollar CDs in August, while they continued to reduce exposure to corporate notes, repurchase agreements (repo), and commercial paper (CP). These trends have been in place all year, and likely accelerated in September.
While taxable money fund holdings of CP declined by $10.6 billion, or 1.4% in August, to $738.5 billion, commercial paper remains the largest holding, representing 24.5% of assets. Over the past year, CP has declined from 29.9% a year ago, though total holdings have increased over the past year by $34.6 billion. Repo remains the second largest holding at 17.4%, or $523.5 billion, down $11.3 billion in the month and up $26.6 billion over the past year. U.S. Government Agency securities rank third in holdings with 13.6% of assets, unchanged from last month but up dramatically from 6.7% a year ago.
Certificates of deposit and Eurodollar CD holdings jumped in August. CDs, which include those issued by American branches of foreign banks, rose from 10.6% of assets to 11.2% ($339.1 billion). Eurodollar CDs, which include those issued by foreign branches of domestic banks, rose from 5.0% to 5.5% of holdings ($165.9 billion). Over the past year, CDs have increased by $124.8 billion and Eurodollar CDs have increased by $87.1 billion. Treasury bills and Other Treasury securities comprise 9.9% of taxable money fund portfolios, or $297.7 billion. Money funds' Treasury holdings have surged from $162.4 billion a year ago.
Corporate notes, which include medium-term notes (or MTNs), continued shrinking in August to $272.9 billion, or 9.0% of assets (from 9.6% a month ago). This sector has shown the sharpest decline over the past year, falling by $94.4 billion. It was the only category to decline in dollar terms over the prior 12 months, which was likely due to the implosion of the structured investment vehicle MTN segment. Bank notes represent 3.5% of money fund portfolios, down slightly from 3.6% a month ago. "Other" investments represent the remaining 5.3% of assets.
To request the full table of "Month-End Portfolio Holdings of Taxable Money Market Funds," e-mail Pete.
