Following a surge in October, money fund assets have continued higher in November, increasing for the 8th week out of the last 10 and hitting their highest levels of 2015. The Investment Company Institute's weekly statistics show that assets are up about $7 billion through November 24, and year-to-date assets are down just $9 billion, or 0.3% (assets are higher this week than every week of the year but lower than their starting level on 12/30/14). ICI's latest monthly asset flow numbers also verify October's money fund asset jump, the largest increase of the year. We review ICI's latest "Trends in Mutual Fund Investing," and ICI's latest weekly "Money Market Fund Assets" report below. We also examine ICI's "Month-End Portfolio Holdings of Taxable Money Funds," which confirms that holdings of Repurchase Agreements plummeted (to $582.0 billion) in October (after hitting an all-time high in Sept.) and Government Agency holdings continued climbing, reached their highest level ($435.9 billion) since June 2010. (See Crane Data's November 12 News, "Nov. Portfolio Holdings: Time Deps, Agencies Jump; Repos Plummet."
The most recent weekly asset update says, "Total money market fund assets increased by $11.83 billion to $2.72 trillion for the six-day period ended Tuesday, November 24, the Investment Company Institute reported today. Among taxable money market funds, government funds (including agency and repo) increased by $5.90 billion and prime funds increased by $6.05 billion. Tax-exempt money market funds decreased by $120 million."
ICI explains, "Assets of retail money market funds decreased by $450 million to $893.45 billion. Among retail funds, government money market fund assets decreased by $900 million to $217.79 billion, prime money market fund assets increased by $700 million to $497.02 billion, and tax-exempt fund assets decreased by $250 million to $178.64 billion. Assets of institutional money market funds increased by $12.27 billion to $1.83 trillion. Among institutional funds, government money market fund assets increased by $6.79 billion to $853.98 billion, prime money market fund assets increased by $5.35 billion to $908.43 billion, and tax-exempt fund assets increased by $130 million to $67.76 billion."
A Note adds, "In anticipation of the Securities and Exchange Commission's (SEC) new money market fund regulations, many advisers are changing their prime money market funds into government money market funds. As a result, there have been, and will continue to be, large shifts in assets from prime funds to government funds before the October 2016 deadline. For more information about the SEC's new money market fund rules, read our recent ICI Viewpoints."
ICI's latest monthly "Trends" confirms a big jump in MMFs in October, as assets increased by $45.2 billion, or 0.2%, to $2.714 trillion. Assets have increased in five of the last 6 months -- assets were down $5.1 billion in September, but up $8.1 billion in August, $45.9 billion in July, $12.9 billion in June, and $38.0 billion in May. In the 12 months through Oct. 31, 2015, money fund assets are up $90.1 billion, according to ICI. It says, "The combined assets of the nation's mutual funds increased by $692.98 billion, or 4.5 percent, to $15.97 trillion in October, according to the Investment Company Institute's official survey of the mutual fund industry."
Trends continues, "Bond funds had an inflow of $4.37 billion in October, compared with an outflow of $20.01 billion in September.... Money market funds had an inflow of $43.92 billion in October, compared with an outflow of $6.06 billion in September. In October funds offered primarily to institutions had an inflow of $51.61 billion and funds offered primarily to individuals had an outflow of $7.69 billion." Money funds now represent 17.0% of all mutual fund assets, while bond funds represent 21.8%.
The fund industry trade association's latest "Portfolio Holdings" summary shows that Repos plummeted following quarter-end while CDs rebounded and retook the No. 1 spot. Repurchase agreement holdings decreased $11049 billion, or 15.9%, in October to $582.0 billion. Repo dropped down to the 2nd largest portfolio segment, representing 23.6% of taxable MMF holdings. As they normally do following quarter-end, CDs (including Eurodollar CDs) jumped, increasing $104.5B, or 21.1%, in October to $599.0 billion. (ICI's CD totals likely include Time Deposits, which Crane Data, and the SEC, categorize as "Other" -- we reported a sizable increase in Other/TDs in October.) CDs make up 24.3% of holdings.
U.S. Government Agency Securities continued surging higher, increasing $36.5 billion, or 9.1%, to $399.3 billion (17.7% of assets). This jump is due to the migration of money fund assets from Prime to Government, including the $115 billion Fidelity Cash Reserves, which is set to complete its conversion by December 1. Treasury Bills & Securities remained in fourth place among composition segments, increasing $13.1 billion, or 3.3%, in October to $404.5 billion (16.4% of assets). Commercial Paper was still fifth, declining $0.9B, or 0.3%, to $337.1 billion (13.7% of assets). Notes (including Corporate and Bank) inched lower by $169 million, or 0.2%, to $77.2 billion (3.1% of assets), and Other holdings (including Cash Reserves) stood at $33.0 billion, up $1.7 billion.
The Number of Accounts Outstanding in ICI's series for taxable money funds increased by 108.5 thousand to 23.231 million, while the Number of Funds remained flat at 350. Over the past 12 months, the number of accounts fell by 376.7 thousand and the number of funds declined by 16. The Average Maturity of Portfolios rose to 38 days in October, up 3 days from Sept. Over the past 12 months, WAMs of Taxable money funds have declined by 9 days. The previous month, WAM's were at the lowest level since June 2010, according to our analysis of ICI's data.
Note: Crane Data updated its November MFI XLS to reflect the 10/31/15 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.)
