Money fund assets increased $10.4 billion in the past week, according to the ICI's latest statistics, but that wasn't enough to make up for April's big drop month-to-date. Crane Data shows money fund assets still down $45.2 billion for the month through April 27 with almost all of the decline coming from the Prime sectors. This will be the second straight month of MMF asset declines (assets dropped by $15.1 billion in March), no surprise given it includes tax season. We review ICI's latest weekly "Money Market Fund Assets" report, and their latest monthly "Trends in Mutual Fund Investing" report below. We also discuss ICI's "Month-End Portfolio Holdings of Taxable Money Funds," which confirms that holdings of CDs (primarily Time Deposits) plummeted in March, while Repo and Treasuries surged. (See our April 12 News, "April Portfolio Holdings: Repo and T-Bills Jump; TDs and CDs Plunge.")

ICI's latest weekly says, "Total money market fund assets increased by $10.35 billion to $2.71 trillion for the week ended Wednesday, April 27, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $7.24 billion and prime funds increased by $6.52 billion. Tax-exempt money market funds decreased by $3.42 billion." Government assets, including Institutional and Retail (and Treasury and Government), stand at $1.284 trillion, while Prime assets are at $1.208 trillion. Government fund assets moved ahead of Prime assets earlier this year, fueled by the conversion of $242.1 billion of Prime funds to Govt funds to date (through May 2).

The release explains, "Assets of retail money market funds decreased by $6.48 billion to $978.18 billion. Among retail funds, government money market fund assets increased by $420 million to $383.05 billion, prime money market fund assets decreased by $3.95 billion to $427.81 billion, and tax-exempt fund assets decreased by $2.95 billion to $167.32 billion. Assets of institutional money market funds increased by $16.82 billion to $1.73 trillion. Among institutional funds, government money market fund assets increased by $6.82 billion to $900.98 billion, prime money market fund assets increased by $10.47 billion to $780.47 billion, and tax-exempt fund assets decreased by $470 million to $48.97 billion." Our analysis of ICI data shows assets down about $56 billion in April (3/30–4/27), and down $50 billion YTD through 4/27.

A Footnote to ICI's weekly 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." After May 2 (when Deutsche and several other funds convert), we count $242.1 billion of Prime funds that will have converted to Government and another $47.6 billion scheduled to switch over before the October 14 MMF Reform deadline.

ICI's "Trends in Mutual Fund Investing March 2016" confirms a decrease in MMF assets in March, down $15.1 billion, or -0.5%, to $2.759 trillion. It's been a rollercoaster few months, as assets jumped $38.2 billion in February, decreased $19.0 billion in January, and climbed $35.3 billion in December. (As mentioned above, assets will be down in April, too). But in the 12 months through March 31, 2016, money fund assets are up $114.2 billion, or 4.3%, according to ICI.

The monthly release says, "The combined assets of the nation's mutual funds increased by $633.32 billion, or 4.2 percent, to $15.72 trillion in March, according to the Investment Company Institute's official survey of the mutual fund industry.... Bond funds had an inflow of $21.40 billion in March, compared with an inflow of $1.12 billion in February.... Money market funds had an outflow of $16.08 billion in March, compared with an inflow of $37.41 billion in February. In March funds offered primarily to institutions had an inflow of $2.71 billion and funds offered primarily to individuals had an outflow of $18.79 billion."

The report shows that the bulk of the money fund outflows in March were from Tax-Exempt MMFs, which declined by $13.2 billion, compared to taxable, which had only $2.9 billion in outflows. Year-to-date through March, MMFs have had $1.1 billion in inflows, with $31.3 billion in inflows to Taxable funds and $30.2 billion in outflows from Tax-Exempt funds." Money funds now represent 17.6% of all mutual fund assets, while bond funds represent 22.3%. The total number of money market funds dropped to 478 in March, down from 479 in February 2016 and down from 525 a year ago.

ICI's latest "Portfolio Holdings" summary shows that Repo, US Treasury Bills, and CP holdings gained in March, while CDs dropped sharply and Agencies also declined. Repurchase agreement moved ahead of CDs as the largest portfolio segment, gaining $55.1 billion, or 10.2%, in March to $597.1 billion. Repo represents 23.6% of taxable MMF holdings. Treasury Bills & Securities also leapfrogged CDs to move into second place among composition segments. Treasuries increased $30.9 billion, or 6.0%, in March to $545.3 billion (21.5% of assets). This reflects the ongoing shift of Prime funds to Government funds.

CDs (including Eurodollar CDs) fell to third, decreasing $84.0B, or 14.2%, in March to $507.8 billion. (ICI's CD totals likely include Time Deposits, which Crane Data and the SEC categorize as "Other" -- we reported a large decrease in Other/TDs in March.) CDs make up 20.0% of all holdings. U.S. Government Agency Securities stood in fourth place, decreasing $15.6 billion, or 3.3%, to $460.6 billion (18.2% of assets). Commercial Paper remained fifth, increasing $20.9B, or 6.7%, to $334.0 billion (13.2% of assets). Notes (including Corporate and Bank) dropped by $17.8 billion, or 25.3%, to $52.7 billion (2.1% of assets), and Other holdings (including Cash Reserves) stood at $36.1 billion.

The Number of Accounts Outstanding in ICI's series for taxable money funds increased by 309.5 thousand to 23.113 million, while the Number of Funds fell by 1 to 337. Over the past 12 months, the number of accounts fell by 194.3 thousand and the number of funds declined by 26. The Average Maturity of Portfolios was 39 days in March, unchanged from February. Over the past 12 months, WAMs of Taxable money funds have declined by 4 days.

Note: Crane Data also revised its April MFI XLS last week to reflect the latest 3/31/16 composition data and maturity breakouts for our entire fund universe. (Visit our Content Center and the latest Money Fund Portfolio Holdings download page to access our April Money Fund Portfolio Holdings and the latest files.)

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