The Investment Company Institute's latest "Trends in Mutual Fund Investing" shows that total money fund assets increased by $8.1 billion in August. However, looking at the numbers for September, it appears that the 4-month winning streak may be in jeopardy as assets appear to be down slightly month-to-date. We review recent flows and ICI's latest Trends, as well as their "Month-End Portfolio Holdings of Taxable Money Funds" below. The latter verifies our previously reported increase in money fund holdings in Agencies and Time Deposits (the latter which ICI categorizes within CDs). (See Crane Data's Sept. 11 News, "Portfolio Holdings Show Jump in Agencies; Prime to Govt Shift Starts.")
Despite finishing September with a bang, money market fund assets will likely finish the month flat to slightly down; this would be the first month since April that MMF assets have declined. Assets were up $8.1 billion in August, $45.9 billion in July, $12.9 billion in June, and $38.0 billion in May. Over the past week (through 9/29), according to our Money Fund Intelligence Daily, MMF assets were up $21.8 billion. However, month-to-date, MMF assets are down $3.9 billion. (ICI's weekly "Money Market Mutual Fund Assets showed assets jumping $14.0 billion last week through Sept. 23, but they had declined the previous 3 weeks in a row.)
ICI's August Trends says, "The combined assets of the nation's mutual funds decreased by $648.78 billion, or 4.0 percent, to $15.63 trillion in August, according to the Investment Company Institute's official survey of the mutual fund industry. Equity funds posted an outflow of $9.22 billion in August, compared with an outflow of $10.19 billion in July.... Bond funds had an outflow of $22.97 billion in August, compared with an outflow of $8.20 billion in July."
It continues, "Money market funds had an inflow of $8.77 billion in August, compared with an inflow of $47.87 billion in July. In August funds offered primarily to institutions had an outflow of $12.66 billion and funds offered primarily to individuals had an inflow of $21.42 billion." Money funds now represent 16.4% of all mutual fund assets, while bond funds represent 21.6%.
Big bond fund outflows continue in September too. Looking at ICI's latest weekly "Long-term Mutual Fund Flows," bond funds have experienced $15.1 billion in outflows through September 23. Bond funds have had 9 straight weeks of outflows.
ICI's latest Portfolio Holdings summary shows that CDs (including Eurodollar CDs) increased by $6.8B, or 1.1%, in August to $650.2 billion. (ICI's CD total likely includes Time Deposits, which we, and the SEC, categorize as "Other" -- we reported a big increase in Other in August.) CDs remained ahead of Repo as the largest segment of taxable fund holdings, making up 26.8% of holdings. Repo holdings decreased $6.2 billion, or 1.1%, in August to $538.5 billion, representing 22.2% of taxable MMF holdings.
Treasury Bills & Securities remained in third place among composition segments, decreasing by $1.7 billion, or 0.4%, in August to $412.5 billion (17.0% of assets). U.S. Government Agency Securities moved ahead of CP into fourth place, after increasing $29.4 billion, or 8.6%, to $370.3 billion (15.3% of assets). We believe that is due in part to asset shifts in the largest money fund, Fidelity Cash Reserves, which is in the process of converting from Prime to Government. Commercial Paper was fifth, falling $3.1B, or 0.9%, to $360.1 billion (14.8% of assets). Notes (including Corporate and Bank) dropped by $1.8 billion, or 2.4%, to $75.1 billion (3.1% of assets), and Other holdings (including Cash Reserves) stood at $19.4 billion, down $17.7 billion.
The Number of Accounts Outstanding in ICI's series for taxable money funds increased by 55.5 thousand to 23.335 million, while the Number of Funds fell 1 to 352. Over the past 12 months, the number of accounts fell by 174.7 thousand and the number of funds declined by 9. The Average Maturity of Portfolios was 36 days in August, down 2 days from July. Over the past 12 months, WAMs of Taxable money funds have declined by 9 days. At 36 days, WAM's remain at the lowest level since June 2010, according to our analysis of ICI's data.
Note: Crane Data has update its Sept. MFI XLS to reflect the 8/31/15 composition data and maturity breakouts for our entire fund universe. 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 Sept. Money Fund Portfolio Holdings and the latest version of this new file.)
