Money market mutual fund assets continued their recovery in the week ended Wednesday, October 22, rising $18.56 billion to $3.536 trillion. ICI's series shows assets growing for the third straight week following increases of $60.80 billion last week and $57.57 billion the week prior. Money fund assets have recovered 75% ($136.92 billion) of their overall asset declines ($182.35 billion) that occurred in the 3 weeks following Sept. 11, which includes the Sept. 16 "breaking of the buck" of The Reserve Fund.
Though Government funds (including Treasury) continue to account for the bulk of the inflows, Prime Institutional assets rose for the second straight week. Prime Inst MMFs increased by $5.94 billion in the latest week to $1.005 trillion, following a $6.95 billion increase last week. Prime (or "General Purpose") Institutional money funds declined by $461.6 billion over the 4-week period starting Sept. 11, with 80% of the declines ($371.79 billion) occurring in the two weeks ended Sept. 24. (These numbers include The Reserve's $65 billion Prime total meltdown.) Two weeks ago Prime Inst assets fell below the $1 trillion level and saw Govt Inst funds surpass them in assets (now at $1.067 trillion).
Tax Exempt money funds increased assets for the third straight week, rising $1.93 billion on the Institutional side (to $188.40 billion) and $2.09 billion on the Retail side (to $301.72 billion). Tax Exempt money funds declined sharply in the 3 weeks including the "break the buck" event, falling $17.49 billion (Retail) and $23.36 billion (Inst), respectively. Over the past 3 weeks, Retail T-E funds have rebounded by $13.01 billion and Institutional T-E MMFs have increased by $9.62 billion.
Year-to-date, money fund assets remain solidly in the black. Assets have grown by $391.5 billion, or 12.4%. Institutions still account for the bulk of the growth ($277.0 billion, or 14%) vs. $114.5 billion (9.9%) for Retail funds. Over 52 weeks, overall money fund totals have increased by $551 billion, or 18.5%. Institutional fund assets have increased by 19.5% over the past year, while Retail assets have grown by 11.9%.
Yields on money market funds continued climbing among Taxable funds and continue falling among Tax-Exempt funds in the latest week. For the week through Wednesday, our Crane Money Fund Average 7-Day Yield rose 0.05% to 1.71% while our Crane Tax-Exempt Index fell 0.76% to 2.36%. Sharply rising Treasury yields driven by the unwinding of the flight to safety have overwhelmed a decline in commercial paper and LIBOR-based rates.
Check back later today for news on the Federal Reserve's Commercial Paper Funding Facility, which goes live on Monday.
