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 Second Quarter, 2018 edition shows that Total MMF Assets increased by $28 billion to $2.821 trillion in Q2. The Household Sector saw assets inch higher and remained the largest investor segment with $1.585 trillion. The next largest segment, Nonfinancial Corporate Businesses also saw assets increase in the second quarter, as did Property-Casualty Insurance and Life Insurance Companies holdings of money funds. We review the latest Z.1 stats below. (Note that the Federal Reserve changed its numbers related to money market funds substantially in the latest quarter; see their comment below.)
A statement entitled, "Release Highlights Second Quarter 2018," tells us, "New source data for money market funds from the U.S. Securities and Exchange Commission’s (SEC) form N-MFP have been incorporated into the sector’s asset holdings (tables F.121 and L.121). Money market funds not available to the public, which are included in the SEC data, are excluded from Financial Accounts’ estimates. Data revisions begin 2013:Q1. Holdings of money market fund shares by households and nonprofit organizations, state and local governments, and funding corporations (tables F.206 and L.206) have been revised due to a change in methodology based on detail from the Investment Company Institute. Data revisions begin 1976:Q1."
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 Nonfinancial Noncorporate Business and Rest of the World categories in Q2 2018. Funding Corporations, State & Local Govt Retirements, and Private Pension Funds saw assets fall slightly in Q2. Over the past 12 months, the Household Sector, Funding Corporations and Nonfinancial Corporate Businesses showed increases in assets, while the State and Local Government Retirement and Private Pension Funds categories showed decreases.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $28 billion, or 1.0%, in the second quarter to $2.821 trillion. Over the year through June 30, 2018, assets were up $186 billion, or 7.1%. The largest segment, the Household sector, totals $1.585 trillion, or 56.2% of assets. The Household Sector increased by $15 billion, or 1.0%, in the quarter, after decreasing $38 billion in Q1'18. Over the past 12 months through Q2'18, Household assets were up $105 billion, or 7.1%.
Nonfinancial Corporate Businesses, the second largest segment according to the Fed's data series, held $471 billion, or 16.7% of the total. Assets here rose by $5 billion in the quarter, or 1.0%, and they've increased by $27 billion, or 6.1%, over the past year. Funding Corporations were the third largest investor segment with $254 billion, or 9.0% of money fund shares. They fell by $6 billion, or -2.3%, in the latest quarter. Funding Corporations have increased by $37 billion, or 16.9%, over the previous 12 months.
The fourth largest segment, Private Pension Funds held 5.5% of money fund assets ($154 billion) -- down $1 billion, or -0.5%, for the quarter, and down $3 billion, or -1.7%, for the year. Nonfinancial Noncorporate Businesses, which held $109 billion (3.9%), were in 5th place. The Rest Of The World category remained in sixth place in market share among investor segments with 3.4%, or $96 billion, while Life Insurance Companies held $51 billion (1.8%), State and Local Government Retirement Funds held $50 billion (1.8%), Property-Casualty Insurance held $28 billion (1.0%), and State and Local Governments held $23 billion (0.8%), 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 $1.710 trillion, or 60.6% of the total. Debt securities includes: Open market paper ($174 billion, or 6.2%; we assume this is CP), Treasury securities ($729 billion, or 25.8%), Agency and GSE backed securities ($663 billion, or 23.5%), Municipal securities ($136 billion, or 4.8%), and Corporate and foreign bonds ($8 billion, or 0.3%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($909 billion, or 32.2%) and Time and savings deposits ($177 billion, or 6.3%). Money funds also hold minor positions in Foreign deposits ($3 billion, or 0.1%), Miscellaneous assets ($7 billion, or 0.3%), and Checkable deposits and currency ($16 billion, 0.6%). Note: The Fed also lists "Variable Annuity Money Funds;" they currently total $32 billion in the quarter.
During Q2, Debt Securities were down $113 billion. This subtotal included: Open Market Paper (up $15 billion), Treasury Securities (down $152 billion), Agency- and GSE-backed Securities (up $20 billion), Municipal Securities (up $4 billion), and Corporate and Foreign Bonds (unchanged). In the second quarter of 2018, Security Repurchase Agreements were up $127 billion, Foreign Deposits were up $2 billion, Checkable Deposits and Currency were up $6 billion, Time and Savings Deposits were up $5 billion, and Miscellaneous Assets were up $1 billion.
Over the 12 months through 6/30/18, Debt Securities were up $170B, which included Open Market Paper up $45B, Treasury Securities up $104B, Agencies up $20B, Municipal Securities (up $3B), and Corporate and Foreign Bonds (down $1B). Foreign Deposits were flat, Checkable Deposits and Currency were up $1B, Time and Savings Deposits were down $1B, Securities repurchase agreements were up $16B, and Miscellaneous Assets were flat.
Finally, thank you to those who attended and supported our 6th annual European Money Fund Symposium, which finishes Friday afternoon in London. Stop by the Hilton London Tower Bridge if you're in town, watch for coverage of the sessions in coming days, and mark your calendars for next year's show in Dublin (Sept. 23-24, 2019)!
