Money fund assets jumped in October following a weak September, starting what is likely their traditional 4th quarter surge. (Money funds have averaged asset increases of over $100 billion in Q4 the past 4 years, according to our MFI XLS.) The Investment Company Institute's weekly statistics show that assets are up about $48.0 billion through October 28, making perhaps the strongest month since Dec. 2014. ICI's latest monthly asset flow numbers also verify that money fund assets decreased slightly in September, the first month since April that assets have declined. We review ICI's latest "Trends in Mutual Fund Investing," which shows that total money fund assets decreased by $5.1 billion in September, and ICI's latest weekly "Money Market Fund Assets" report. Further, we examine ICI's "Month-End Portfolio Holdings of Taxable Money Funds," which confirms our that holdings of Repurchase Agreements hit an all-time high in September ($692.4 billion) and Government Agency holdings reached their highest level since December 2010 ($399.3 billion). (See Crane Data's October 14 News, "Holdings Show Huge Jump in Fed Repo; Agencies Surge on Cash Res Shift."
Money market mutual fund assets increased for the sixth week in a row, according to ICI's latest weekly "Money Market Fund Assets" report. Month-to-date in October (through 10/28), money market fund assets are up $48.0 billion to $2.717 trillion. If it holds up, a $48.0 billion increase would make October the best month of the year for money funds. Year-to-date through October 28, money fund assets are down just $16 billion, with Retail assets up $4 billion and Institutional assets down $20 billion.
ICI's most recent weekly asset update, for the week ended October 29, says, "Total money market fund assets increased by $18.29 billion to $2.72 trillion for the week ended Wednesday, October 28, the Investment Company Institute reported today. Among taxable money market funds, Treasury funds (including agency and repo) increased by $12.18 billion and prime funds increased by $7.18 billion. Tax-exempt money market funds decreased by $1.07 billion."
The weekly series adds, "Assets of retail money market funds decreased by $4.45 billion to $890.88 billion. Among retail funds, Treasury money market fund assets decreased by $900 million to $207.02 billion, prime money market fund assets decreased by $2.79 billion to $505.22 billion, and tax-exempt fund assets decreased by $760 million to $178.65 billion. Assets of institutional money market funds increased by $22.74 billion to $1.83 trillion. Among institutional funds, Treasury money market fund assets increased by $13.08 billion to $806.54 billion, prime money market fund assets increased by $9.97 billion to $953.16 billion, and tax-exempt fund assets decreased by $310 million to $66.32 billion."
ICI's most recent "Trends" confirms that September was the first negative month since April, as total money fund assets dropped $5.1 billion, or 0.2%, to $2.668 trillion. This ended a four-month winning streak -- assets were up $8.1 billion in August, $45.9 billion in July, $12.9 billion in June, and $38.0 billion in May. However, in the 12 months since Sept. 30, 2014, money fund assets were up $64 billion, according to ICI.
The September release says, "The combined assets of the nation's mutual funds decreased by $360.94 billion, or 2.3 percent, to $15.28 trillion in September, according to the Investment Company Institute's official survey of the mutual fund industry.... Bond funds had an outflow of $20.05 billion in September, compared with an outflow of $23.53 billion in August.... Money market funds had an outflow of $6.06 billion in September, compared with an inflow of $8.77 billion in August. In September funds offered primarily to institutions had an outflow of $9.38 billion and funds offered primarily to individuals had an inflow of $3.32 billion." Money funds now represent 17.5% of all mutual fund assets, while bond funds represent 22.6%.
ICI's latest Portfolio Holdings summary shows that Repos had a record-setting month as holdings soared to new highs. Repurchase agreement holdings increased $153.9 billion, or 28.6%, in September to $692.4 billion. Repo jumped ahead of CDs as the largest segment representing 28.6% of taxable MMF holdings. As previously mentioned, the $692.4 billion in Repo appears to be the highest total we have ever seen. CDs (including Eurodollar CDs) went in the other direction, decreasing $156.8B, or 24.1%, in September to $494.5 billion. (ICI's CD total likely includes Time Deposits, which we, and the SEC, categorize as "Other" -- we reported a sizable decrease in Other in September.) CDs make up 20.4% of holdings.
U.S. Government Agency Securities vaulted over Commercial Paper and Treasuries into third place after increasing $29.0 billion, or 7.8%, to $399.3 billion (16.6% of assets). This jump is likely due to the conversion of money funds from Prime to Government, including the $115 billion Fidelity Cash Reserves, which is set to complete its conversion by December 1. Treasury Bills & Securities fell to fourth place among composition segments, decreasing $20.0 billion, or 5.1%, in September to $391.5 billion (16.1% of assets). Commercial Paper dropped to fifth, declining $22.2B, or 6.2%, to $337.9 billion (13.9% of assets). Notes (including Corporate and Bank) gained by $2.3 billion, or 3.0%, to $77.4 billion (3.2% of assets), and Other holdings (including Cash Reserves) stood at $31.8 billion, down $5.3 billion.
The Number of Accounts Outstanding in ICI's series for taxable money funds decreased by 170.2 thousand to 23.123 million, while the Number of Funds fell 2 to 350. Over the past 12 months, the number of accounts fell by 589.0 thousand and the number of funds declined by 19. The Average Maturity of Portfolios dropped to 35 days in September, down 1 day from August. Over the past 12 months, WAMs of Taxable money funds have declined by 10 days. At 35 days, WAM's remain at the lowest level since June 2010, according to our analysis of ICI's data.
Note: Crane Data updated its October MFI XLS to reflect the 9/30/15 composition data and maturity breakouts for our entire fund universe last 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 October Money Fund Portfolio Holdings and the latest version of this new file.)
