The Investment Company Institute's latest reports show money fund assets declined modestly in January and fractionally during the latest week, while holdings of Government agency securities fell sharply last month. ICI's monthly "Trends in Mutual Fund Investing" for January 2011 shows total money fund assets falling by $75.6 billion, or 2.7%, to $2.728 trillion, while ICI's weekly "Money Market Mutual Fund Assets" shows money fund assets falling slightly after rising for two straight weeks.
The Institute's latest weekly report says, "Total money market mutual fund assets decreased by $5.14 billion to $2.751 trillion for the week ended Wednesday, February 23, the Investment Company Institute reported today. Taxable government funds decreased by $6.31 billion, taxable non-government funds increased by $3.02 billion, and tax-exempt funds decreased by $1.85 billion." This drop follows two consecutive weekly gains of $9.1 billion and $10.2 billion, respectively, which in turn followed five weeks in a row of outflows to start the year. Year-to-date through Feb. 23, money fund assets have decreased by $59 billion, or 2.1%.
ICI's monthly says, "The combined assets of the nation's mutual funds increased by $55.9 billion, or 0.5 percent, to $11.874 trillion in January, according to the Investment Company Institute's official survey of the mutual fund industry. In the survey, mutual fund companies report actual assets, sales, and redemptions to ICI.... Money market funds had an outflow of $75.63 billion in January, compared with an outflow of $9.45 billion in December. Funds offered primarily to institutions had an outflow of $64.73 billion. Funds offered primarily to individuals had an outflow of $10.91 billion."
The monthly figures through Jan. 31, 2011, show bond fund inflows slowing to almost zero (up $3.7 billion to $2.612 billion) after rising by $400 billion (18.1%) in 2010. Money market fund assets decreased by $512.1 billion, or 15.4%, in 2010. Meanwhile, stock fund assets gained $107.6 billion in January to $5.774 trillion, after increasing by $709.6 billion, or 14.3%, in 2010. Liquid assets (or "cash") in stock mutual funds remained near a record low of 3.5% in January. ICI's monthly statistics tracked 442 taxable money funds and 210 tax-free money funds in January 2011 vs. 475 taxable and 228 tax-free money funds a year ago.
ICI also released (to members only) its "Month-End Portfolio Holdings of Taxable Money Funds," which showed a sharp decline in U.S. Government Agency securities in January. Certificates of Deposit remain the largest holding in taxable money funds at $560.4 billion, or 23.3%. Repurchase Agreements, which increased by $18.9 billion to $507.9 billion, ranked second with 21.1% of assets, while Commercial Paper regained the third largest holding spot with $390 billion (16.2%). Government Agency securities dropped to fourth place among fund holdings with their decline of $32.9 billion to $378,039, or 15.7% of assets.
