ICI's latest monthly "Trends in Mutual Fund Investing: October 2011," shows money fund assets declining modestly in October. (Month-to-date in November, though, money fund assets have increased by about $12 billion and have risen for 3 weeks in a row.) The mutual fund trade group also released its latest "Month-End Portfolio Holdings of Taxable Money Market Funds statistics, which shows a continued decline in CDs, and a continued increase in Treasury securities in October. In other news, online money market fund portal technology provider Cachematrix broke $100 billion in money fund assets, according to a release.
The ICI monthly report says, "The combined assets of the nation's mutual funds increased by $606.5 billion, or 5.5 percent, to $11.661 trillion in October, 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.... Bond funds had an inflow of $11.41 billion in October, compared with an inflow of $9.63 billion in September.... Money market funds had an outflow of $22.50 billion in October, compared with an outflow of $10.69 billion in September. Funds offered primarily to institutions had an outflow of $18.29 billion. Funds offered primarily to individuals had an outflow of $4.21 billion."
The statistics show total money fund assets at $2.608 trillion as of Oct. 31, which represents 22.4% of all mutual fund assets. ICI's "Net New Cash Flow" figures show money fund assets with an outflow of $22.5 billion in Oct. vs. an outflow of $10.7 billion in Sept. Overall money fund assets declined by $21.9 billion (including dividends) in October while bond funds increased assets by $50.1 billion. ICI's flows show outflows of $203.3 billion YTD 2011 vs. an outflow of $540.0 billion YTD in 2010 through October. (Bond funds have increased by $218 billion YTD.) ICI's survey tracks 433 taxable and 209 tax-free money funds (642 total) vs. 449 taxable and 216 tax-free money funds a year earlier (665 total).
ICI's latest "Month-End Portfolio Holdings of Taxable Money Market Funds" shows that Repurchase Agreements (Repo), the largest holdings of taxable money funds, increased by $14.7 billion to $505.2 billion, or 21.8% of assets. The second largest segment, Certificates of Deposits, plunged in October (down $43.0 billion, or 9.0%), dropping to $437.1 billion, or 18.8% <b:>`_. (Eurodollar CDs, which we include in the above total, represent $70.1 billion, or 16.0% of all CDs, and they accounted for $18.6 billion of the drop in October.)
Treasury Securities now rank third among taxable money fund holdings with an increase of $30.6 billion to $412.6 billion (17.8%). U.S. Government Agency Securities are now the fourth-largest segment at 16.2%, or $377.2 billion; they decreased $15.5 billion, or 4.0%, in October. Commercial Paper (CP) holdings, which are in fifth place, increased by $8.5 billion, or 2.4%, to $365.8 billion. ICI's numbers show Average Maturities extended by two days to 41 days in October, while the number of shareholder accounts outstanding fell to 26.81 million.
In other news, money fund portal technology company Cachematrix put out a press release entitled, "Cachematrix Bank Portals Top $100 Billion in Total Money Fund Assets." The company says, "Cachematrix, the leading provider of money market fund and fixed income trading technology for banks and financial institutions, announced today that its banking partners have surpassed $100 Billion in institutional money market fund assets under management.... Corporations are increasingly requiring their banks to implement highly automated short term cash management via portal technology, because corporations place a premium on the safety, convenience and liquidity that money fund portals provide."
Cachematrix Founder and CEO George Hagerman says, "It is becoming very apparent that the impact of money funds for corporate cash managers goes beyond just seeking a good return. Corporations use money funds for convenience, efficiency, predictability, as well as yield. There is also an added sense of security that comes from centralizing investments through a known commodity, such as a relationship bank. This provides corporations with a heightened level of transparency at both the overall portfolio level, as well as within each underlying investment."
He adds, "With bank deposits hitting record highs, corporations are looking for alternative ways to further their relationship with their banks while still maintaining investment diversification. Our patented portal technology allows banks to provide their clients with a menu of diversified money fund investment options through a seamless system that automates and consolidates the investment process for their corporate clients."
