Money market mutual fund assets broke above $2.85 trillion, reaching their highest level since early 2010. The Investment Company Institute's latest "Money Market Fund Assets" report shows that year-to-date, MMF assets have increased by $14 billion, or 0.5%. Over 52 weeks they've increased by $190 billion, or 7.0%. ICI's numbers also show Prime money market fund assets declined for the 2nd week in a row, while Govt MMF assets jumped. We review ICI's latest money fund numbers, as well as the Federal Reserve's latest Z.1 statistics, the latter of which confirm a big jump in money fund assets in the 4th quarter of 2017 (led by securities lenders and corporates), below.

ICI writes, "Total money market fund assets increased by $14.33 billion to $2.86 trillion for the week ended Wednesday, March 7, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $16.73 billion and prime funds decreased by $2.48 billion. Tax-exempt money market funds increased by $79 million." Total Government MMF assets, which include Treasury funds too, stand at $2.264 trillion (79.3% of all money funds), while Total Prime MMFs stand at $456.1 billion (16.0%). Tax Exempt MMFs total $136.1 billion, or 4.8%.

They explain, "Assets of retail money market funds increased by $2.05 billion to $1.01 trillion. Among retail funds, government money market fund assets increased by $1.77 billion to $617.54 billion, prime money market fund assets increased by $345 million to $263.78 billion, and tax-exempt fund assets decreased by $69 million to $129.09 billion." Retail assets account for over a third of total assets, or 35.4%, and Government Retail assets make up 61.1% of all Retail MMFs.

ICI's release adds, "Assets of institutional money market funds increased by $12.28 billion to $1.85 trillion. Among institutional funds, government money market fund assets increased by $14.95 billion to $1.65 trillion, prime money market fund assets decreased by $2.83 billion to $192.36 billion, and tax-exempt fund assets increased by $147 million to $6.96 billion." Institutional assets account for 64.6% of all MMF assets, with Government Inst assets making up 89.2% 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 Fourth Quarter, 2017 edition shows that the Household Sector remains the largest investor segment at over $1.0 trillion; assets here rose in Q4 after also rising in Q3. The next largest segment, Funding Corporations (primarily Securities Lending money) also saw assets increase again in the 4th quarter, while the third largest, Nonfinancial Corporate Businesses, saw jump after declining the previous quarter.

The Rest of the World, State & Local Governments, Nonfinancial Noncorporate Business, and State and Local Govt Retirement categories all saw assets rise slightly in Q4, while Life Insurance Companies and Private Pension Funds' holdings of money funds were flat in the latest quarter. Over the past 12 months, Funding Corporations, the Household Sector, State & Local Govt Retirement, Nonfinancial Corporate Businesses, and State & Local Governments' holdings increased, but `Nonfinancial Corporate Businesses, Life Insurance Companies and Private Pension Funds showed decreases.

The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $100 billion, or 3.6%, in the fourth quarter to $2.847 trillion. Over the year through Dec. 31, 2017, assets were up $119 billion, or 4.4%. The largest segment, the Household sector, totals $1.054 trillion, or 37.0% of assets. The Household Sector increased by $12 billion, or 1.1%, in the quarter, after increasing $65 billion in Q3'17. Over the past 12 months through Q4'17, Household assets were up $31 billion, or 3.0%.

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 $55 billion in the quarter, or 9.3%, and they've increased by $194 billion, or 43.5%, over the past year. Nonfinancial Corporate Businesses remained the third largest investor segment with $472 billion, or 16.6% of money fund shares. They rose by $23 billion, or 5.2%, in the latest quarter, after dipping in Q3'17 (down $14 billion). Corporate money fund holdings decreased $111 billion, or -19.0%, over the previous 12 months.

The fourth largest segment, State and Local Governments held 6.6% of money fund assets ($189 billion) -- up $3 billion, or 1.3%, for the quarter, and up $5 billion, or 2.9%, for the year. Private Pension Funds, which held $149 billion (5.2%), 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 $113 billion, while Nonfinancial Noncorporate Businesses held $103 billion (3.6%), State and Local Government Retirement Funds held $69 billion (2.4%), Life Insurance Companies held $42 billion (1.5%), and Property-Casualty Insurance held $19 billion (0.7%), 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 $1.683 trillion, or 59.1%. Debt securities includes: Open market paper ($148 billion, or 5.2%; we assume this is CP), Treasury securities ($702 billion, or 24.7%), Agency and GSE backed securities ($683 billion, or 24.0%), Municipal securities ($142 billion, or 5.0%), and Corporate and foreign bonds ($7 billion, or 0.3%).

Other large holdings positions in the Fed's series include Security repurchase agreements ($956 billion, or 33.6%) and Time and savings deposits ($179 billion, or 6.3%). Money funds also hold minor positions in Foreign deposits ($4 billion, or 0.1%), Miscellaneous assets ($3 billion, or 0.1%), and Checkable deposits and currency ($22 billion, 0.8%). Note: The Fed also recently added a new breakout line to this table which lists "Variable Annuity Money Funds;" they currently total $32 billion, down $1 billion in the quarter.

During Q4, Treasury Securities (up $52 billion), Security Repurchase Agreements (up $47 billion), Agency- and GSE-Backed Securities (up $16 billion), and Open market paper (up $15 billion), and Municipal Securities (up $7 billion) showed gains, while Time and Savings Deposits (down $20 billion) and Checkable Deposits and Currency (down $14 billion) showed a decrease. Over the 12 months through 12/31/17, Security Repurchase Agreements (up $156B), Agency- and GSE-Backed Securities (up $5B), and Open Market Paper (up $44B) all showed big gains over the 12 months through Q4'17. Treasury Securities (down $94B), Municipal Securities (down $20B) and Checkable deposits and currency (down $8B) all showed declines.

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