MMF Assets Dip; Prime Shifts to Govt
Money fund assets dipped $8.0 billion, the second straight week of declines following five straight weeks of asset gains, according to ICI's latest "Money Market Fund Assets" report. Government assets and Prime assets continue to head in opposite directions with Govt Inst growing and Prime Inst assets falling. The release says, "Total money market fund assets decreased by $8.00 billion to $2.73 trillion for the week ended Wednesday, June 8, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $14.37 billion and prime funds decreased by $19.88 billion. Tax-exempt money market funds decreased by $2.49 billion." Government assets, including Institutional and Retail (and Treasury and Government), stand at $1.397 trillion, while Prime assets are at $1.122 trillion. Government fund assets moved ahead of Prime assets earlier this year, fueled by the conversion (or liquidation) of $245.4 billion of Prime funds to Govt funds (so far) through May 31. The past two weeks' Prime-to-Government shifts were influenced by the recategorization of funds and the liquidation of PNC's Prime Funds on May 31, but they also could well reflect the beginning of an investor shift from Prime to Govt. ICI's release continues, "Assets of retail money market funds decreased by $2.32 billion to $965.87 billion. Among retail funds, government money market fund assets increased by $3.05 billion to $413.08 billion, prime money market fund assets decreased by $3.86 billion to $391.93 billion, and tax-exempt fund assets decreased by $1.50 billion to $160.86 billion." It adds, "Assets of institutional money market funds decreased by $5.69 billion to $1.76 trillion. Among institutional funds, government money market fund assets increased by $11.32 billion to $983.49 billion, prime money market fund assets decreased by $16.01 billion to $730.30 billion, and tax-exempt fund assets decreased by $990 million to $45.74 billion." Year-to-date through June 8, MMF assets are down $34 billion with Inst assets down $60 billion and Retail assets up $27 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."
