Prime Institutional money market mutual fund assets rose yesterday for the first time since Sept. 9, according to our Money Fund Intelligence Daily, which tracks the 450 largest funds (those over $1 billion), representing 86% of all money fund assets. The Crane Prime Institutional Money Fund Index increased by $2.96 billion to $652.6 billion. While overall money fund assets have been rebounding since the Treasury announced its Temporary Guarantee Program for Money Market Funds, a continued gradual erosion in the "Prime" sector had been a growing and serious concern. With even a modest rebound in this sector though, we should see the pressures on the commercial paper market begin to ease.

The Investment Company Institute's weekly money fund figures show the overall stabilization of the asset base. (View the ICI and IDC webinar regarding the Treasury's Temporary Guarantee Program for Money Market Funds here.) ICI shows money fund assets increasing by $1.34 billion in the week through October 1 to $3.399 trillion. Through Wednesday, retail money fund assets rose $2.05 billion to $1.239 billion while institutional assets fell $714 million to $2.160 billion.

ICI's underlying numbers show a huge shift from General Purpose (or "Prime") money funds into Government funds. Over the past 3 weeks, $439 billion moved out of prime institutional funds, $23 billion moved out of tax-exempt institutional funds, and $277 billion moved into government institutional funds (including Treasury). Overall institutional money fund assets fell by $185 billion in the 3 weeks through Oct. 1.

Retail assets actually rose over the past 3 weeks, though these too show a shift from general purpose into government. Retail prime funds lost $40 billion, tax-exempt retail lost $17 billion, and government retail gained $60 billion since Sept. 10, the week prior to The Reserve Primary Fund's "breaking the buck."

Year-to-date and over the past 52 weeks, however, money market mutual fund assets remain up substantially. Money fund assets in total have increased by $177 billion, or 8.1%, YTD, and they've increased by $492 billion, or 16.9% over the past 52 weeks (through 10/1). At their current $3.4 trillion level, assets remain more than twice as large as their level of 10 years ago ($1.352 trillion at year-end 1998).

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