Money market mutual fund assets increased for the fourth week in a row and for the 11th of the last 15 weeks, according to ICI's latest weekly "Money Market Fund Assets" report. They've also increased for 4 months in a row, rising $113 billion, or 4.4% since the end of April, the strongest late spring and summer stretch for assets since 2008. Month-to-date in August (through 8/26), money market fund assets are up $47.0 billion to $2.695 trillion. We also review ICI's latest "Trends in Mutual Fund Investing" for July, which shows that total money fund assets increased by $45.9 billion last month, and review ICI's latest "Month-End Portfolio Holdings of Taxable Money Funds" below. The latter verifies our previously reported decrease in Fed Repo and jump in CDs and TDs in July. (See Crane Data's August 12 News, "MF Port Holdings: Repo Plunges; Time Deposits, CDs, CP Jump in July.")
Their most recent asset update for the week ended August 26 says, "Total money market fund assets increased by $9.01 billion to $2.69 trillion for the week ended Wednesday, August 26, the Investment Company Institute reported.... Among taxable money market funds, Treasury funds (including agency and repo) increased by $140 million and prime funds increased by $9.25 billion. Tax-exempt money market funds decreased by $380 million."
It explains, "Assets of retail money market funds increased by $6.38 billion to $887.44 billion. Among retail funds, Treasury money market fund assets increased by $1.42 billion to $200.55 billion, prime money market fund assets increased by $5.63 billion to $506.97 billion, and tax-exempt fund assets decreased by $670 million to $179.92 billion. Assets of institutional money market funds increased by $2.63 billion to $1.81 trillion. Among institutional funds, Treasury money market fund assets decreased by $1.27 billion to $809.78 billion, prime money market fund assets increased by $3.61 billion to $929.15 billion, and tax-exempt fund assets increased by $290 million to $68.33 billion."
ICI's July Trends says, "The combined assets of the nation's mutual funds increased by $136.79 billion, or 0.8 percent, to $16.28 trillion in July.... Bond funds had an outflow of $8.43 billion in July, compared with an inflow of $8.24 billion in June.... Money market funds had an inflow of $47.80 billion in July, compared with an inflow of $12.54 billion in June. In July funds offered primarily to institutions had an inflow of $40.53 billion and funds offered primarily to individuals had an inflow of $7.26 billion." `Money funds now represent 16.4% of all mutual fund assets, while bond funds represent 21.6%.
Year-to-date through August 27, MMF assets are down just $38.0 billion, or 1.4%. As mentioned, August will likely be the fourth straight month that MMF assets increase, following a $45.9 billion increase in July, a $12.9 billion jump in June, and a $38.0 billion rise in May. June and July have traditionally been week months for money funds, which is why the sizable gains are worth noting. The $45.9 billion increase is the best July since at least 2008. Last year, assets dipped $19 billion in July and over the last 6 years they have averaged a decrease of $20 billion in the month. We believe that some of these recent inflows could be coming from bank deposits as well as bond funds, which are bracing for interest rate hikes.
ICI's latest Portfolio Holdings summary shows that CDs (including Eurodollar CDs) increased by $106.9B, or 19.9%, in July to $643.4 billion. (ICI's CD total likely includes Time Deposits, which we, and the SEC, categorize as "Other" -- we reported a sizable increase in Other in July.) CDs jumped ahead of Repo as the largest segment of taxable fund holdings, making up 26.6% of holdings. Repo holdings decreased $100.3 billion, or 15.5%, in July to $544.6 billion, representing 22.5% of taxable MMF holdings.
Treasury Bills & Securities remained in third place among composition segments, increasing by $9.9 billion, or 2.5%, in July to $414.2 billion (17.1% of assets). Commercial Paper stayed in fourth, rising $21.5B, or 6.3%, to $363.2 billion (15.0% of assets). U.S. Government Agency Securities was fifth after increasing $1.9 billion, or 0.6%, to $340.9 billion (14.1% of assets). Notes (including Corporate and Bank) gained by $8.6 billion, or 12.6%, to $76.9 billion (3.2% of assets), and Other holdings (including Cash Reserves) stood at $37.1 billion, down $2.4 billion.
The Number of Accounts Outstanding in ICI's series for taxable money funds decreased by 77.6 thousand to 23.279 million, while the Number of Funds fell 4 to 353. Over the past 12 months, the number of accounts fell by 428.9 thousand and the number of funds declined by 20. The Average Maturity of Portfolios remained at 38 days in July, same as June. Over the past 12 months, WAMs of Taxable money funds have declined by 7 days. At 38 days, WAM's remain at the lowest level since June 2010, according to our analysis of ICI's data.
Note: Crane Data will update its July MFI XLS to reflect the 7/31/15 composition data and maturity breakouts for our entire fund universe next week. Note too that we are now producing a "Holdings Reports Issuer Module," which allows subscribers to choose a series of Portfolio Holdings and Issuers and to see a full listing of which money funds own what paper. (Visit our Content Center and the latest Money Fund Portfolio Holdings download page to access our August Money Fund Portfolio Holdings and the latest version of this new file.)
