ICI's latest "Money Market Fund Assets" report shows that Prime money market funds' 3-week recovery came to an end in the latest week, with a decline of $1.4 billion. Prime MMFs began November with their first increase since July 13 and have risen $2.9 billion since 11/2. (Crane Data's Money Fund Intelligence Daily shows Prime MMFs down by $7.5 for the month of November though.) Tax Exempt MMFs also dipped after rising for 6 weeks in a row. However, overall assets, which broke back above $2.7 trillion for the first time since August last week, continued their push higher in the latest week. Year-to-date they're down $40 billion, or 1.4%. Total MMF assets, which have seen year-end growth spurts in each of the past 5 years, appear to again be embarking on a push to close the remaining deficit before year-end.

The new release says, "Total money market fund assets increased by $13.85 billion to $2.72 trillion for the eight-day period ended Wednesday, November 30, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $15.40 billion and prime funds decreased by $1.42 billion. Tax-exempt money market funds decreased by $130 million." Total Government MMF assets, which represent 81.4% of all money funds, stand at $2.213 trillion, while Total Prime MMFs, which total 13.8%, stand at $375. billion. Tax Exempt MMFs total $130.0 billion, or 4.8%.

ICI explains, "Assets of retail money market funds decreased by $2.28 billion to $972.10 billion. Among retail funds, government money market fund assets decreased by $1.31 billion to $594.67 billion, prime money market fund assets decreased by $830 million to $252.06 billion, and tax-exempt fund assets decreased by $140 million to $125.37 billion."

Their latest continues, "Assets of institutional money market funds increased by $16.13 billion to $1.75 trillion. Among institutional funds, government money market fund assets increased by $16.71 billion to $1.62 trillion, prime money market fund assets decreased by $590 million to $123.58 billion, and tax-exempt fund assets increased by $10 million to $4.63 billion."

Finally, it notes, "ICI reports money market fund assets to the Federal Reserve each week. Data for previous weeks reflect revisions due to data adjustments, reclassifications, and changes in the number of funds reporting. Weekly money market assets for the last 20 weeks are available on the ICI website. For more information about the implementation of new money market fund rules by the Securities and Exchange Commission (SEC), please see our ICI Viewpoints."

Prior to this week's Prime outflows, the past 3 weeks had seen (admittedly modest) inflows of $4.3 billion in total. Prime MMFs had declined by 16 weeks in a row prior to this, dropping by $663.1 billion. YTD, Prime MMF assets have declined by $908.2 billion, or 70.7%, and they've declined by $1.083 trillion, or 74.2%, since 10/31/15 (just prior to the start of the massive Prime to Government migration). Government money funds have gained $37.5 billion over the past 4 weeks, and they increased by $575.2 billion over the 15 weeks prior.

Govt MMFs are up by $992.7 billion YTD (81.3%) and they're up by $1.200 trillion (118.4%) since 10/31/15. Prior to this week's minor outflows, Tax Exempt MMFs had risen for 6 weeks in a row, up $2.6 billion. They'd fallen by $68.5 billion the previous 14 weeks. Tax Exempt MMFs are down by $124.4 billion YTD (-48.9%) and they're down by $115.0 billion (-46.9%) since 10/31/15.

Also, Fitch Ratings released a brief update entitled, "Prime Money Fund Assets Gain for Second Consecutive Week" yesterday. It says, "As more than $1 trillion shifted out of prime money funds in response to reform, Fitch's U.S. Commercial Paper Monitor shows that the funds significantly reduced investments in bank, corporate, and asset-backed CP. Fitch's U.S. Money Fund Reform Dashboard illustrates that following reform implementation, prime money fund managers have begun to revert back to more normal portfolio management strategies, as fund flows have stabilized.

Fitch explains, "Managers have been extending maturities and reducing liquidity in a bid to increase prime funds' yields and attract investors back from government money funds; prime institutional funds' assets increased $3 billion between Nov. 14 and Nov. 28. Average weekly liquidity across 29 prime institutional funds Fitch reviewed fell 19% from a peak of 87% on Oct.7, 2016 to 68% on Nov. 28, 2016. The spread between institutional prime and government funds increased to 0.22% as of Nov. 28 from a recent trough of 0.12% as of Sept. 14, a month before reform."

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