The Federal Reserve's latest quarterly Z.1 "Flow of Funds" Survey was released late last week. The 125-page report contains a number of tables relating to money market mutual fund assets and holdings. The Third Quarter 2009 edition shows that the largest investors in money market mutual funds remain by far the household sector, followed by funding corporations (which includes securities lenders), and nonfinancial corporate businesses.
Money fund assets declined by $221 billion in Q3, following a decline of $155 billion during Q2'09. Households, which account for $1.359 trillion, or 40.4%, of the $3.363 trillion tracked in the Fed's series, accounted for the bulk of the decline, down $125 billion. Funding corporations showed the second largest decline, losing $101 billion to $705 billion in the quarter, representing 21.0% of assets. Funding corporations are defined as "Funding subsidiaries, nonbank financial holding companies, and custodial accounts for reinvested collateral of securities lending operations. (Figures are from table L.206 on page 79 entitled, "Money Market Mutual Fund Shares.")
The third largest segment, nonfinancial corporate businesses, now holds $700 billion, or 20.8%, and actually showed a $12 billion increase in money fund shares during the quarter. Life insurance companies rank fourth with $257 billion (7.6%) in money funds. Private pension funds also increased their holdings in money funds slightly, adding $4 billion to $96 billion (2.9%). Nonfarm, noncorporate businesses hold $86 billion (2.5%), state and local governments hold $81 billion (2.3%), the category "rest of the world" holds $61 billion (1.7%), and state and local government retirement funds hold $19 billion (0.5%).
The Fed's Flow of Funds Table L.121, which covers money fund holdings, shows Agency and GSE-backed securities accounting for the biggest declines in Q3. Governments dropped $98 billion, but at $635 billion they still represent the largest percentage holding (18.9%). Time and saving deposits are the second largest sector with $545 billion (16.2%), followed by "Open market paper" at $514 billion (15.3%). Security RPs rank 4th with $495 billion (14.7%), Treasury securities rank 5th with $426 billion (12.7%), Municipal securities rank 6th with $421 billion (12.5%), Corporate and foreign bonds rank 7th with $168 billion (5%), and Foreign deposits and miscellaneous holdings total $160 billion (4.7%).
