The Investment Company Institute, the trade group for mutual funds, released its most recent monthly "Trends in Mutual Fund Investing" and "Month-End Portfolio Holdings of Taxable Money Funds" yesterday. The former shows both taxable and tax-exempt money fund assets down slightly in October, while the latter confirms earlier reports of a continued surge in Treasury holdings and plunge in Repo and CDs last month. (See our Nov. 10 News, "November Portfolio Holdings: Treasuries Jump; Repo, TDs, CDs Fall.")

ICI's latest "Trends in Mutual Fund Investing - October 2016" shows a $12.1 billion decrease in money market fund assets in Oct. to $2.660 trillion. The increase follows a decrease of $51.1 billion in Sept., and an increase of $18 billion in August and $14 billion in July. In the 12 months through Oct. 31, money fund assets have gone down by $54.7 billion, or 2.0%. (Month-to-date in Nov. through 11/28, our Money Fund Intelligence Daily shows total assets up by $49.1 billion with Prime MMFs down $5.2 billion, Tax Exempt MMFs up $1.6 billion, and Govt MMFs up $52.7 billion.)

The monthly report states, "The combined assets of the nation's mutual funds decreased by $275.38 billion, or 1.7 percent, to $16.08 trillion in October, according to the Investment Company Institute's official survey of the mutual fund industry. In the survey, mutual fund companies report actual assets, sales, and redemptions to ICI.... Bond funds had an inflow of $10.15 billion in October, compared with an inflow of $17.62 billion in September.... Money market funds had an outflow of $13.24 billion in October, compared with an outflow of $52.38 billion in September. In October funds offered primarily to institutions had an outflow of $7.89 billion and funds offered primarily to individuals had an outflow of $5.35 billion."

The latest "Trends" shows that both Taxable MMFs and Tax-Exempt MMFs decreased slightly in October. Tax-Exempt MMFs declined by $0.4 billion after falling $15.3 billion in September. Taxable MMFs decreased by $11.7 billion, after dipping $1.1 billion the prior month. Year-to-date through Oct. 31, MMFs have had $95.4 billion in outflows, with $28.0 billion in inflows to Taxable funds and $123.4 billion in outflows from Tax-Exempt funds. Money funds now represent 16.5% (up from 16.3%) of all mutual fund assets, while bond funds represent 23.2%. The total number of money market funds dropped to 410 in Oct., down from 416 in Sept. and down from 501 a year ago.

ICI's Portfolio Holdings confirms a jump in Treasuries and an increase in Agencies in Oct., while every other composition category declined. Repo remained the largest portfolio segment, but it fell by $64.7 billion, or 7.6%, to $790.9 billion or 31.2% of holdings. Treasury Bills & Securities reclaimed second place among composition segments, rising $127.7 billion, or 20.1%, to $762.9 billion, or 30.1% of holdings. U.S. Government Agency Securities dropped to third place, gaining $19.8 billion, or 3.1%, to $662.5 billion or 26.2% of holdings. These increases were fueled by the final crescendo of assets shifting away from Prime fund assets and into Government funds ahead of the October 14 money fund reform deadline.

Certificates of Deposit (CDs) stood in fourth place, but decreased $64.7 billion, or 7.6%, to $150.9 billion (6.0% of assets). Commercial Paper remained in fifth place but decreased $5.3B, or 4.7%, to $107.9 billion (4.3% of assets). Notes (including Corporate and Bank) were down by $3.0 billion, or 26.9%, to $8.2 billion (0.4% of assets), and Other holdings fell to $39.2 billion.

The Number of Accounts Outstanding in ICI's series for taxable money funds increased by 427 thousand to 24.974 million, while the Number of Funds fell by 2 to 308. Over the past 12 months, the number of accounts rose by 1.737 million and the number of funds declined by 41. The Average Maturity of Portfolios was 42 days in Oct., up 3 days from Sept. Over the past 12 months, WAMs of Taxable money funds have lengthened by 4 days. Note: Crane Data also revised its Nov. MFI XLS last week to reflect the latest 10/31/16 Portfolio Composition data and Maturity breakouts. (Visit our Content Center and the latest Money Fund Portfolio Holdings download page to access our Sept. Money Fund Portfolio Holdings and the latest files.)

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