The Investment Company Institute's latest weekly "Money Market Fund Assets" report shows a big jump in money fund assets for the second week in a row and an increase in Prime MMFs for the 7th week in a row. Government money funds jumped for the second week in a row after showing outflows during most of the first half of the year, while Prime MMFs rose for the 13th increase in the past 15 weeks. Prime assets have risen by $18.7 billion over the past 11 weeks, money funds have made up over half of their year-to-date deficit (they're now down just $69 billion, or 2.5%, YTD). We review recent asset trends below, and we also cover yet another set of liquidations, including another Tax Free MMF withdrawal (this one from Western).
ICI writes, "Total money market fund assets increased by $20.43 billion to $2.66 trillion for the week ended Wednesday, August 2, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $14.68 billion and prime funds increased by $4.32 billion. Tax-exempt money market funds increased by $1.44 billion." Total Government MMF assets, which include Treasury funds too, stand at $2.102 trillion (79.0% of all money funds), while Total Prime MMFs stand at $427.0 billion (16.0%). Tax Exempt MMFs total $131.1 billion, or 4.9%.
They explain, "Assets of retail money market funds increased by $5.69 billion to $960.90 billion. Among retail funds, government money market fund assets increased by $3.06 billion to $581.67 billion, prime money market fund assets increased by $1.27 billion to $254.27 billion, and tax-exempt fund assets increased by $1.35 billion to $124.96 billion." Retail assets account for over a third of total assets, or 36.1%, and Government Retail assets make up 60.5% of all Retail MMFs.
ICI's release adds, "Assets of institutional money market funds increased by $14.75 billion to $1.70 trillion. Among institutional funds, government money market fund assets increased by $11.61 billion to $1.52 trillion, prime money market fund assets increased by $3.05 billion to $172.71 billion, and tax-exempt fund assets increased by $90 million to $6.15 billion." Institutional assets account for 63.9% of all MMF assets, with Government Inst assets making up 89.5% of all Institutional MMFs.
In other news, ICI also published a report entitled, "401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2015." It comments, "The bulk of 401(k) assets were invested in stocks. On average, at year-end 2015, 66 percent of 401(k) participants’ assets were invested in equity securities through equity funds, the equity portion of balanced funds, and company stock. Twenty-seven percent of assets were in fixed-income securities such as stable value investments, bond funds, and money funds."
The report shows money fund assets remaining at 4% of 401k plan assets, the sixth year in a row they've been at that level. GICs and stable value funds represented 6% of assets, while bond funds represented 8%. ICI writes, "Younger participants tended to favor equity funds and balanced funds, while older participants were more likely to invest in fixed-income securities such as bond funds, GICs and other stable value funds, or money funds."
The report says of 401k plans, "Over the past three decades, 401(k) plans have become the most widespread private-sector employer-sponsored retirement plan in the United States. In 2015, an estimated 54 million American workers were active 401(k) plan participants. By year-end 2015, 401(k) plan assets had grown to $4.4 trillion, representing 19 percent of all retirement assets." Thus, money funds in 401k plans total approximately $176 billion (4% of $4.4 trillion).
Finally, we ran into a couple more liquidation filings, including another State Tax Exempt money fund. Western Asset Management says in a filing for Western Asset Liquid Reserves, "The fund's Board of Trustees has determined that it is in the best interests of the Fund and its shareholders to terminate and wind up the Fund. The Fund is expected to cease operations on or about July 28, 2017. In preparation for the termination of the Fund, the assets of the Fund will be liquidated and the Fund will cease to pursue its investment objective."
It adds, "Shareholders of the Fund who elect to redeem their shares prior to the completion of the liquidation will be redeemed in the ordinary course at the Fund's net asset value per share. Each shareholder who remains in the Fund will receive a liquidating distribution equal to the aggregate net asset value of the shares of the Fund that such shareholder then holds. In the interim, effective immediately, the Fund will be closed to new purchases and incoming exchanges, except that dividend reinvestment will continue until the Fund is terminated."
Another filing for Western California Tax-Free Money Fund tells us, "The fund's Board of Trustees has determined that it is in the best interests of the Fund and its shareholders to terminate and wind up the Fund. The Fund is expected to cease operations on or about July 28, 2017. In preparation for the termination of the Fund, the assets of the Fund will be liquidated and the Fund will cease to pursue its investment objective."
It continues, "Shareholders of the Fund who elect to redeem their shares prior to the completion of the liquidation will be redeemed in the ordinary course at the Fund's net asset value per share. Each shareholder who remains in the Fund will receive a liquidating distribution equal to the aggregate net asset value of the shares of the Fund that such shareholder then holds. In the interim, effective immediately, the Fund will be closed to new purchases and incoming exchanges, except that dividend reinvestment will continue until the Fund is terminated. Current shareholders (including those investing through a systematic investment plan or payroll deduction) will be permitted to purchase additional Fund shares until July 14, 2017."
