Govt Now Twice as Big as Prime
Prime assets fell hard again, heading towards $825 billion, while Government money fund assets jumped again. Govt MMFs are now more than twice the size of Prime assets for the first time ever. ICI's "Money Market Fund Assets" report shows MMFs overall decreasing $10.5 billion in the latest week. Prime funds fell $54.1 billion -- their 15th decline out of the past 16 weeks (-$354.1B). Government funds gained $48.2 billion in the past week. Since Oct. 29, 2015, Prime assets have fallen by a massive $631.8 billion, or 43.3%. Govt MMFs have increased by $732.2 billion during this same time (up 72.2%) while Tax Exempt MMFs have fallen by $93.3 billion (-38.1%). YTD in 2016, Prime MMFs are down by $457.2 billion, or 35.6% while Govt MMFs are up by $524.9 billion, or 43.0%. Over the past 5 weeks, Prime MMFs have fallen by 163.4 billion and they've fallen by 337.5 billion over the past 14 weeks. (Govt MMFs have risen 204.5 billion over 5 weeks and 386.5 billion over 14 weeks.) 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 decreased by $10.50 billion to $2.72 trillion for the week ended Wednesday, August 31, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $48.20 billion and prime funds decreased by $54.05 billion. Tax-exempt money market funds decreased by $4.66 billion." Government assets, including Institutional and Retail (and Treasury and Government) stand at $1.746 trillion, while Prime assets, which dipped below the $1.0 trillion level for the first time in 17 years 4 weeks ago, are at $826.6 billion. The release explains, "Assets of retail money market funds decreased by $2.35 billion to $931.19 billion. Among retail funds, government money market fund assets increased by $6.00 billion to $496.51 billion, prime money market fund assets decreased by $6.17 billion to $315.90 billion, and tax-exempt fund assets decreased by $2.18 billion to $118.77 billion…. Assets of institutional money market funds decreased by $8.15 billion to $1.79 trillion. Among institutional funds, government money market fund assets increased by $42.21 billion to $1.25 trillion, prime money market fund assets decreased by $47.88 billion to $510.66 billion, and tax-exempt fund assets decreased by $2.48 billion to $32.93 billion."
