ICI: Prime MMFs Fall Below $900B
Prime assets fell hard again, breaking below the $900 billion level for the first time since 1998, after seeing their steepest decline of the year last week. ICI's "Money Market Fund Assets" report shows MMFs overall increasing $24.6 billion in the latest week. Prime funds fell $23.8 billion -- their 14th decline out of the past 15 weeks (-$300.0B). Government funds gained $55.1 billion, renewing the recent trend of Govt MMFs gaining more than prime funds lost. Since Oct. 29, 2015, Prime assets have fallen by a massive $577.8 billion, or 38.0%. Govt MMFs have increased by $684.0 billion during this same time (up 67.5%) while Tax Exempt MMFs have fallen by $88.6 billion (-36.2%). YTD in 2016, Prime MMFs are down by $403.2 billion, or 31.4% while Govt MMFs are up by $476.7 billion, or 39.1%. The shift was initially fueled by the conversion of over $300 billion of Prime funds into Govt funds, but since June appears to be driven by investors and investor segments. ICI's latest weekly says, "Total money market fund assets increased by $24.63 billion to $2.73 trillion for the week ended Wednesday, August 24, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $55.07 billion and prime funds decreased by $23.82 billion. Tax-exempt money market funds decreased by $6.62 billion." Government assets, including Institutional and Retail (and Treasury and Government) stand at $1.698 trillion, while Prime assets, which dipped below the $1.0 trillion level for the first time in 17 years 4 weeks ago, are at $880.6 billion. The release explains, "Assets of retail money market funds decreased by $2.85 billion to $933.54 billion. Among retail funds, government money market fund assets increased by $3.03 billion to $490.52 billion, prime money market fund assets decreased by $2.05 billion to $322.07 billion, and tax-exempt fund assets decreased by $3.83 billion to $120.95 billion.... Assets of institutional money market funds increased by $27.48 billion to $1.80 trillion. Among institutional funds, government money market fund assets increased by $52.04 billion to $1.21 trillion, prime money market fund assets decreased by $21.77 billion to $558.54 billion, and tax-exempt fund assets decreased by $2.79 billion to $35.41 billion." In other news, see the WSJ's "Number of U.S. Prime Money-Market Funds to Drop as Rules Change", which says, "The number of U.S. prime money-market funds is projected to decline by nearly half, while the tally of government funds is expected to climb 23% when fund sponsors complete revamping their lineups to reflect Securities and Exchange Commission rules that take effect in October, according to iMoneyNet, which tracks money funds."
