Money fund assets dropped $7.7 billion last week, with all of it coming from Government funds, according to the ICI. Their latest "Money Market Fund Assets" release says, "Total money market fund assets1 decreased by $7.69 billion to $2.73 trillion for the week ended Wednesday, April 13, the Investment Company Institute reported today. Among taxable money market funds, government funds decreased by $7.18 billion and prime funds increased by $2.77 billion. Tax-exempt money market funds decreased by $3.29 billion." Government assets, including Institutional and Retail (and Treasury and Government), stand at $1.288 trillion, while Prime assets are at $1.221 trillion. Government fund assets moved ahead of Prime assets earlier this year, fueled by the conversion of $214 billion of Prime funds to Govt funds to date. (Another $75.6 billion is scheduled to switch over before the October 14 MMF Reform deadline.) ICI's report continues, "Assets of retail money market funds decreased by $8.87 billion to $988.87 billion. Among retail funds, government money market fund assets decreased by $890 million to $381.84 billion, prime money market fund assets decreased by $6.21 billion to $434.76 billion, and tax-exempt fund assets decreased by $1.77 billion to $172.27 billion." It adds, "Assets of institutional money market funds increased by $1.18 billion to $1.74 trillion. Among institutional funds, government money market fund assets decreased by $6.29 billion to $906.16 billion, prime money market fund assets increased by $8.98 billion to $786.13 billion, and tax-exempt fund assets decreased by $1.51 billion to $49.95 billion." Year-to-date through April 13, MMF assets are down $28 billion with Inst assets down $78 billion and Retail assets up $50 billion. (We've seen a number of reclassifications from Inst to Retail too.) A Footnote to ICI's release 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." This week, the $111 million Schwab MM Portfolio converted into Schwab Govt MM Portfolio on April 14; the $824 million UBS Liquid Assets will convert into UBS Liquid Assets Govt Fund on April 15; and $316 million Goldman Sachs VIT MMF will convert into Goldman Sachs Govt MMF on April 15. We expect large outflows over the next several weeks due to the April 15 income tax filing deadline (April 18 this year due to the Evacuation Day holiday in Washington).

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