MMF Assets Drop, Prime Down Again
Money fund assets dropped for the third week in a row, which included a quarterly tax payment date (June 15), according to ICI's latest "Money Market Fund Assets" report. Prime funds continue to see asset outflows, apparently unrelated to Prime to Govt funds conversions. The release says, "Total money market fund assets decreased by $18.56 billion to $2.71 trillion for the week ended Wednesday, June 15, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $7.38 billion and prime funds decreased by $23.03 billion. Tax-exempt money market funds decreased by $2.90 billion." Government assets, including Institutional and Retail (and Treasury and Government), stand at $1.404 trillion, while Prime assets are at $1.099 trillion. Government fund assets moved ahead of Prime assets earlier this year, fueled by the conversion (or liquidation) of almost $250 billion of Prime funds to Govt funds to date (over $50 billion more is scheduled to move too). We believe that the recent Prime asset declines reflect investor segments shifting from Prime to Govt. Compared to asset totals on 12/31/15, when Prime funds were at $1.284 trillion, they're now down $185 billion, or 14.4%. Government fund assets, which were $1.221 trillion, are now up $183 billion, up 15.0%. ICI's release continues, "Assets of retail money market funds decreased by $3.95 billion to $961.93 billion. Among retail funds, government money market fund assets increased by $2.15 billion to $415.22 billion, prime money market fund assets decreased by $3.67 billion to $388.27 billion, and tax-exempt fund assets decreased by $2.42 billion to $158.44 billion." It adds, "Assets of institutional money market funds decreased by $14.61 billion to $1.74 trillion. Among institutional funds, government money market fund assets increased by $5.23 billion to $988.72 billion, prime money market fund assets decreased by $19.37 billion to $710.93 billion, and tax-exempt fund assets decreased by $480 million to $45.26 billion." Year-to-date through June 15, MMF assets are down $52 billion with Inst assets down $75 billion and Retail assets up $23 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."
