The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (formerly the "Flow of Funds") late last week. Among the 4 tables it includes on money market mutual funds, the First Quarter, 2018 edition shows that Total MMF Assets declined by $54 billion to $2.793 trillion in Q1. The Household Sector remained the largest investor segment with $998 billion; though assets here dipped back below $1 trillion in Q1 (after breaking over this level in Q3'17). The next largest segment, Funding Corporations (this is mainly Securities Lending reinvestment cash we believe) jumped again in the first quarter, while State and Local Govt Retirement and Nonfinancial Corporate Businesses holdings declined slightly. We review the latest Z.1 stats below, and we also remind you about and recap details about our upcoming big show, Crane's Money Fund Symposium in Pittsburgh, June 25-27. (Tickets are still available -- we hope to see you there!)
The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also show assets inching higher for the State & Local Governments, Life Insurance Companies, Nonfinancial Noncorporate Business, Property-Casualty Insurance, and Private Pension Funds categories. The Rest of the World category saw assets fall slightly in Q1. Over the past 12 months, Funding Corporations showed a jump in assets, while the Household Sector showed a decrease.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets decreased by $54 billion, or -1.9%, in the first quarter to $2.847 trillion. Over the year through March 31, 2018, assets were up $129 billion, or 4.8%. The largest segment, the Household sector, totals $938 billion, or 33.6% of assets. The Household Sector decreased by $116 billion, or -11.0%, in the quarter, after increasing $12 billion in Q4'17. Over the past 12 months through Q1'18, Household assets were down $60 billion, or -6.0%.
Funding Corporations, the second largest segment according to the Fed's data series, held $709 billion, or 25.4% of the total. Funding Corporations' assets in money funds jumped by $71 billion in the quarter, or 11.0%, and they've increased by $179 billion, or 33.6%, over the past year. Nonfinancial Corporate Businesses remained the third largest investor segment with $467 billion, or 16.7% of money fund shares. They fell by $5 billion, or -1.1%, in the latest quarter. Corporate money fund holdings have decreased by $2 billion, or -0.4%, over the previous 12 months.
The fourth largest segment, State and Local Governments held 6.8% of money fund assets ($191 billion) -- up $3 billion, or 1.5%, for the quarter, and up $9 billion, or 4.8%, for the year. Private Pension Funds, which held $150 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 $111 billion, while Nonfinancial Noncorporate Businesses held $104 billion (3.7%), State and Local Government Retirement Funds held $59 billion (2.1%), Life Insurance Companies held $44 billion (1.6%), and Property-Casualty Insurance held $20 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 $1.824 trillion, or 65.3% of the total. Debt securities includes: Open market paper ($154 billion, or 5.5%; we assume this is CP), Treasury securities ($879 billion, or 31.5%), Agency and GSE backed securities ($644 billion, or 23.1%), Municipal securities ($141 billion, or 5.0%), and Corporate and foreign bonds ($6 billion, or 0.2%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($783 billion, or 28.0%) and Time and savings deposits ($171 billion, or 6.1%). Money funds also hold minor positions in Foreign deposits ($1 billion, or 0.1%), Miscellaneous assets ($3 billion, or 0.1%), and Checkable deposits and currency ($10 billion, 0.4%). Note: The Fed also lists "Variable Annuity Money Funds;" they currently total $33 billion, or 0.5% in the quarter.
During Q1, Debt Securities were up $142 billion. This subtotal included: Open Market Paper (up $6 billion), Treasury Securities (up $177 billion), Agency- and GSE-backed Securities (down $39 billion), Municipal Securities (down $2 billion), and Corporate and Foreign Bonds (down $1 billion). In the first quarter of 2018, Security Repurchase Agreements were down $173 billion, Foreign Deposits were down $3 billion, Checkable Deposits and Currency were down $12 billion, Time and Savings Deposits were down $8 billion, and Miscellaneous Assets were down $1 billion.
Over the 12 months through 3/31/18, Debt Securities were up $169B, which included Open Market Paper up $45B, Treasury Securities up $139B, Agencies (flat), Municipal Securities (down $13B), and Corporate and Foreign Bonds (down $2B). Foreign Deposits were down $2B, Checkable Deposits and Currency were down $4B, Time and Savings Deposits were down $8B, Securities repurchase agreements were down $25B, and Miscellaneous Assets were down $1B.
In other news, there are just two weeks until the largest gathering of money market fund managers and cash investors in the world! We expect over 500 to attend our 10th Annual Money Fund Symposium. We're still accepting registrations ($750) for our June 25-27 conference at The Westin Convention Center Pittsburgh. The conference lineup features a keynote from Federated Investors' President & CEO Chris Donahue and a 'who's who' of speakers in the money market mutual fund industry. We hope you'll join us in Pittsburgh! (See here for the latest agenda, and see here to register.)
Also, we're making plans for Crane's 6th annual "offshore" money fund event, European Money Fund Symposium, which will be held in London, England, September 20-21, 2018. This website (www.euromfs.com) is now taking registrations and the preliminary agenda has been posted, and we expect a robust turnout in the U.K. due to pending regulatory changes and Brexit. (Contact us to inquire about sponsoring or speaking. A couple slots are still available.)
Finally, our next Money Fund University "basic training" event has shifted dates slightly -- it is scheduled for Jan. 17-18, 2019, in Stamford, Conn. The MFU website, as well as our Bond Fund Symposium site, will be taking registrations soon, and we'll be publishing these agenda late this summer. Our 3rd Bond Fund Symposium will be March 25-26, 2019, in Philadelphia, Pa. Watch www.cranedata.com for more details on these events, and please let us know if you have any questions or feedback on our growing conference business.
