Last Thursday, the Federal Reserve released its latest quarterly "Flow of Funds Accounts of the United States" Z.1. statistics, which contains several tables on money market mutual fund investors and money fund holdings. The latest edition shows that money fund assets were basically flat in the fourth quarter of 2010, and that the household sector remains by far the largest holder of money fund shares, followed by funding corporations and nonfinancial corporate businesses. The Z.1. report also shows Security RPs, or repos, remained the largest holding of money funds for the third consecutive quarter.
The Z.1. Flow of Funds report contains four tables involving money market funds -- F.121 (p. 34) and L.121 (p. 79) on "Money Market Mutual Funds" (Holdings) Flows and Outstandings, respectively, and F.206 (p. 42) and L.206 (p. 87) on "Money Market Mutual Fund Shares" (Holders) Flows and Outstandings, respectively. The Fed's figures give a rare glimpse into the investor profile of money fund shareholders, and they give an alternative perspective on money fund portfolio composition.
As we mentioned, the Household sector remains the largest holder of money fund assets with $1.131 trillion, or 41.1%, of the $2.755 trillion total as of Dec. 31, 2010. This is up $6 billion from the previous quarter, but down $182 billion, or 13.8%, from a year ago. Funding corporations, which include Securities lenders, continue to be the second largest shareholder with $704 billion, or 25.6% of the total. Assets in this segment have declined by a steep $209 billion since Q4'09, or 22.9%, the largest drop of any shareholder type in both dollar and percentage terms.
Nonfinancial corporate business holdings of money funds remained the third largest slice, with $537 billion, or 19.5% of assets. These investors reduced money fund holdings by $94 billion, or 14.8%, over the past year. The remainder of money fund investors represent just single digit segments. These include: Private pension funds ($96 billion, or 3.5%); State and local governments ($91 billion, or 3.3%); Nonfarm noncorporate business ($66 billion, or 2.4%); Rest of the world ($61 billion, or 2.2%); Life insurance companies ($28 billion, or 1.0%); Property casualty insurance ($26 billion, or 1.0%); and State and local government retirement ($14 billion, or 0.5%).
The Fed's Z.1 Table L.121 "Money Market Mutual Funds" shows Security RPs accounting for $479 billion, or 17.4%, of all money fund assets. This is down just $1 billion from a year ago, while overall holdings of money fund assets decreased by $503 billion, or 15.4%. Time and savings deposits ranked second with $468 billion, or 17.0% of the total. These holdings declined by $105 billion, or 18.4%, since Q4'09. Agency and GSE backed securities ranked third among holdings with $403 billion, or 14.6%.
The Fed's Open market paper category, which we assume is Commercial Paper, was the fourth largest segment with $394 billion, or 14.3%. Other money fund holdings listed in the Fed's tables include: Treasury securities ($335 billion, or 12.2%); Municipal securities ($334 billion, or 12.1%); Corporate and foreign bonds ($154 billion, or 5.6%); Foreign deposits ($106 billion, or 3.8%); Miscellaneous assets ($67 billion, or 2.4%); and Checkable deposits and currency ($14 billion, or 0.5%).
To see the full "Flows of Funds" Z.1. release, go www.federalreserve.gov/releases/z1/Current/z1.pdf, or e-mail Pete Crane to request Crane Data's spreadsheet excerpts of the Fed's series. Also, watch for `Crane Data's latest Money Fund Portfolio Holdings files, part of our Money Fund Wisdom premium database service, to be released with Feb. 28, 2011 data early tomorrow.
