MMF Assets Drop; Prime to Govt Shift
Money market mutual fund assets dropped for the first time in seven weeks, according to ICI's latest weekly "Money Market Fund Assets" report. ICI's most recent weekly, which reflects the `reclassification of $26 billion worth of Prime funds to Government (ICI's "Treasury"), says, "Total money market fund assets decreased by $14.75 billion to $2.70 trillion for the week ended Wednesday, November 4, the Investment Company Institute reported today. Among taxable money market funds, Treasury funds (including agency and repo) increased by $18.34 billion and prime funds decreased by $34.68 billion. Tax-exempt money market funds increased by $1.59 billion." The weekly update explains, "Assets of retail money market funds decreased by $1.48 billion to $889.40 billion. Among retail funds, Treasury money market fund assets increased by $910 million to $207.92 billion, prime money market fund assets decreased by $3.25 billion to $501.96 billion, and tax-exempt fund assets increased by $870 million to $179.52 billion. Assets of institutional money market funds decreased by $13.27 billion to $1.81 trillion. Among institutional funds, Treasury money market fund assets increased by $17.43 billion to $823.98 billion, prime money market fund assets decreased by $31.43 billion to $921.73 billion, and tax-exempt fund assets increased by $720 million to $67.04 billion." The down week snapped 6 straight weeks of asset gains for money market funds. Year-to-date, money market fund assets are down $31 billion, or 1.1%. Our Money Fund Intelligence XLS, which ships to subscribers Friday morning, will reflect a similar shift of Prime assets to Government assets, as the first wave of funds "go government" due to pending money market reforms. We reclassified $23.8 billion in 3 Franklin money funds, including Franklin MMF (now Govt MMF) and Franklin Institutional Fiduciary Trust (IFT) Money Market Portfolio (now IFT US Govt MMP) and $2.3 billion in Dreyfus Inst Res Money (now Inst Pref Govt MMF), which changed on Nov. 1. (Crane Data will also be shifting some Fidelity funds this month, and the $115 billion `Fidelity Cash Reserves next month. See MFI and MFI XLS for details._) According to our Money Fund Intelligence, MMFs rose by $56.5 billion for the motnh of October, and assets have averaged asset increases of over $100B in Q4 the past 4 years. So we expect assets to rebound in coming weeks and inflows as we head into yearend.
