Prime MMF Assets Resume Plunge
ICI's latest "Money Market Fund Assets" show Prime assets plummeting, the week after their first increase in 10 weeks. The release says, "Total money market fund assets decreased by $5.59 billion to $2.71 trillion for the week ended Wednesday, July 20, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $23.56 billion and prime funds decreased by $29.04 billion. Tax-exempt money market funds decreased by $110 million." Government assets, including Institutional and Retail (and Treasury and Government), stand at $1.518 trillion, their first time ever above the $1.5 trillion level. Meanwhile Prime assets are poised to fall below $1 trillion (at $1.008 trillion) for the first time since 1998. Government fund assets moved ahead of Prime assets earlier this year, fueled by the conversion (or liquidation) of over $300 billion of Prime funds to Govt funds (to date). The release explains, "Assets of retail money market funds increased by $3.89 billion to $958.37 billion. Among retail funds, government money market fund assets increased by $6.55 billion to $457.11 billion, prime money market fund assets decreased by $1.68 billion to $357.17 billion, and tax-exempt fund assets decreased by $980 million to $144.09 billion.... Assets of institutional money market funds decreased by $9.47 billion to $1.76 trillion. Among institutional funds, government money market fund assets increased by $17.02 billion to $1.06 trillion, prime money market fund assets decreased by $27.36 billion to $651.06 billion, and tax-exempt fund assets increased by $870 million to $44.18 billion." ICI notes, "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." (Note: The most recent conversion is SEI, which is liquidating its Prime funds on 7/22.) Year-to-date through July 20, money fund assets are down $44 billion, or 1.6%, with Institutional assets down $64 billion and Retail assets up $19 billion. Prime MMF assets have declined by $275.6 billion YTD (-21.5%) and have declined by $450.2 billion (-30.9%) since 10/31/15 (when the first of the large Prime-to-Govie conversions began). Government MMFs assets have increased by $297.3B (24.3%) YTD and have increased by over half a trillion dollars -- $504.5B -- (49.8%) since 10/31. Tax-Exempt MMFs have declined by $66.1B YTD (-26.0%) and by $56.7B (-23.1%) since 10/29/15. See also the FT's "Investors stall on prime money market pullout".
