Another Big Shift to Govt MMFs
Money fund assets increased slightly in the past week, up $1.7 billion, as another batch of Prime money funds officially converted to Government funds. ICI's latest weekly "Money Market Fund Assets" report says, "Total money market fund assets increased by $1.65 billion to $2.71 trillion for the week ended Wednesday, May 4, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $26.48 billion and prime funds decreased by $24.45 billion. Tax-exempt money market funds decreased by $380 million." Government assets, including Institutional and Retail (and Treasury and Government), surpassed $1.3 trillion for the first time (now at $1.313 trillion), while Prime assets dipped below $1.2 trillion (at $1.182 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). ICI's report continues, "Assets of retail money market funds increased by $40 million to $978.61 billion. Among retail funds, government money market fund assets increased by $8.64 billion to $394.07 billion, prime money market fund assets decreased by $8.29 billion to $417.53 billion, and tax-exempt fund assets decreased by $320 million to $167.00 billion." It adds, "Assets of institutional money market funds increased by $1.61 billion to $1.73 trillion. Among institutional funds, government money market fund assets increased by $17.84 billion to $918.82 billion, prime money market fund assets decreased by $16.17 billion to $764.30 billion, and tax-exempt fund assets decreased by $60 million to $48.91 billion." Year-to-date through May 4, MMF assets are down $48 billion with Inst assets down $88 billion and Retail assets up $40 billion. 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." On May 2, 23 funds, totaling $28.4 billion, converted from Prime to Government. In other news, Invesco reported net inflows of $3.8 billion into its money market funds in the first quarter, according to their Q1 earnings release.
