Money market mutual fund assets broke above $2.8 trillion, reaching their highest level since the end of 2010. The Investment Company Institute's latest "Money Market Fund Assets" report shows that year-to-date, MMF assets have increased by $78 billion, or 2.9%. If trends continue, money fund assets should post their biggest annual increase since 2009. Since the end of June 2017, they've jumped by $190 billion, or 7.2%. ICI's numbers also show Prime money market fund assets rose for their 8th week in a row and their 15th week in the past 18. They've now increased by $73.4 billion, or 19.1%, year-to-date. We review ICI's latest money fund numbers, as well as the Federal Reserve's latest Z.1 statistics, below.

ICI writes, "Total money market fund assets increased by $8.39 billion to $2.81 trillion for the week ended Wednesday, December 6, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $6.54 billion and prime funds increased by $838 million. Tax-exempt money market funds increased by $1.02 billion." Total Government MMF assets, which include Treasury funds too, stand at $2.218 trillion (79.0% of all money funds), while Total Prime MMFs stand at $459.3 billion (16.4%). Tax Exempt MMFs total $130.1 billion, or 4.6%.

They explain, "Assets of retail money market funds increased by $7.52 billion to $996.12 billion. Among retail funds, government money market fund assets increased by $6.21 billion to $605.39 billion, prime money market fund assets increased by $462 million to $266.49 billion, and tax-exempt fund assets increased by $842 million to $124.24 billion." Retail assets account for over a third of total assets, or 35.5%, and Government Retail assets make up 60.8% of all Retail MMFs.

ICI's release adds, "Assets of institutional money market funds increased by $874 million to $1.81 trillion. Among institutional funds, government money market fund assets increased by $323 million to $1.61 trillion, prime money market fund assets increased by $376 million to $192.75 billion, and tax-exempt fund assets increased by $175 million to $5.87 billion." Institutional assets account for 64.5% of all MMF assets, with Government Inst assets making up 89.0% of all Institutional MMFs.

In other news, the Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (formerly the "Flow of Funds") yesterday. Among the 4 tables it includes on money market mutual funds, the Third Quarter, 2017 edition shows that the Household Sector remains the largest investor segment; assets here rose in Q3 after falling in Q2. The next largest segment, Funding Corporations (primarily Securities Lending money) also saw assets increase in the third quarter, while the third largest, Nonfinancial Corporate Businesses, saw assets decline. The Rest of the World category, State & Local Governments, Nonfinancial Noncorporate Business, and Property Casualty Insurance all saw assets rise slightly in Q3, while the State and Local Govt Retirement and Private Pension Funds categories saw assets inch lower in the latest quarter. Over the past 12 months, Funding Corporations, the Household Sector and State & Local Govt Retirement holdings increased, but `Nonfinancial Corporate Businesses and Life Insurance Companies showed decreases.

The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $114 billion, or 4.3%, in the third quarter to $2.748 trillion. Over the year through Sept. 30, 2017, assets were up $76 billion, or 2.8%. The largest segment, the Household sector, totals $1.042 trillion, or 37.9% of assets. The Household Sector increased by $65 billion, or 6.7%, in the quarter, after decreasing $21 billion in Q2'17. Over the past 12 months through Q3'17, Household assets were up $70 billion, or 7.2%.

Funding Corporations, which became the second largest segment in Q1'17 according to the Fed's data series, held $584 billion, or 21.3% of the total. Securities lending reinvestment (aka funding corporations) assets in money funds jumped by $62 billion in the quarter, or 11.8%, and they've increased by $128 billion, or 27.9%, over the past year. Nonfinancial Corporate Businesses remained the third largest investor segment with $449 billion, or 16.3% of money fund shares. They fell by $14 billion, or -3.0%, in the latest quarter, after dipping in Q2'17 (down $6 billion). Corporate money fund holdings decreased $126 billion, or -21.9%, over the previous 12 months.

The fourth largest segment, State and Local Governments held 6.8% of money fund assets ($186 billion) -- up $3 billion, or 1.4%, for the quarter, and up $4 billion, or 2.3%, for the year. Private Pension Funds, which held $149 billion (5.4%), remained in 5th place. The Rest Of The World category was the sixth largest segment in market share among investor segments with 4.0%, or $109 billion, while Nonfinancial Noncorporate Businesses held $101 billion (3.7%), State and Local Government Retirement Funds held $67 billion (2.5%), Life Insurance Companies held $42 billion (1.5%), and Property-Casualty Insurance held $18 billion (0.6%), according to the Fed's Z.1 breakout.

The Fed's "Flow of Funds" Table L.121 shows "Money Market Mutual Funds" largely invested in "Debt Securities," or Credit Market Instruments, with $1.594 trillion, or 58.0%. Debt securities includes: Open market paper ($133 billion, or 4.8%; we assume this is CP), Treasury securities ($651 billion, or 23.7%), Agency and GSE backed securities ($666 billion, or 24.2%), Municipal securities ($135 billion, or 4.9%), and Corporate and foreign bonds ($8 billion, or 0.3%).

Other large holdings positions in the Fed's series include Security repurchase agreements ($910 billion, or 33.1%) and Time and savings deposits ($199 billion, or 7.2%). Money funds also hold minor positions in Foreign deposits ($6 billion, or 0.2%), Miscellaneous assets ($4 billion, or 0.2%), and Checkable deposits and currency ($36 billion, 1.3%). Note: The Fed also recently added a new breakout line to this table which lists "Variable Annuity Money Funds;" they currently total $33 billion, down $2 billion in the quarter.

During Q3, Treasury Securities (up $26 billion), Agency- and GSE-Backed Securities (up $23 billion), Time and Savings Deposits (up $22 billion), Checkable Deposits and Currency (up $21 billion), Security Repurchase Agreements (up $15 billion), and Open market paper (up $9 billion) showed gains, while Municipal Securities (down $7 billion) showed a decrease. Over the 12 months through 9/30/17, Security Repurchase Agreements (up $54B), Agency- and GSE-Backed Securities (up $24B), Open Market Paper (down $20B), and Treasury Securities (up $15B) all showed big gains over the 12 months through Q2'17. Municipal Securities (down $21B) and Checkable deposits and currency (down $14B) both showed declines.

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