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 Fourth Quarter 2018 edition shows that Total MMF Assets increased by $216 billion to $3.083 trillion in Q4. The Household Sector, which saw asset jump in Q4, remained the largest investor segment with $1.731 trillion. The next largest segment, Nonfinancial Corporate Businesses also saw assets increase in the fourth quarter, as did Funding Corporations' (primarily securities lending reinvestment cash) holdings of money funds.
The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also show asset increases for Life Insurance Companies, the Rest of the World and Nonfinancial Noncorporate Business categories in Q4 2018. Property-Casualty Insurance and State & Local Govt Retirements saw assets fall slightly in Q4, and Private Pension Funds MMF holdings were flat. Over the past 12 months, the Household Sector, Nonfinancial Corporate Businesses, Funding Corporations, Rest of the World and Nonfinancial Noncorporate Businesses showed asset increases, 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 $216 billion, or 7.5%, in the fourth quarter to $3.083 trillion. Over the year through Dec. 31, 2018, assets were up $235 billion, or 8.2%. The largest segment, the Household sector, totals $1.731 trillion, or 56.1% of assets. The Household Sector increased by $117 billion, or 7.3%, in the quarter, after increasing $29 billion in Q3'18. Over the past 12 months through Q4'18, Household assets were up $123 billion, or 7.6%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $502 billion, or 16.3% of the total. Assets here rose by $23 billion in the quarter, or 4.9%, and they've increased by $26 billion, or 5.6%, over the past year. Funding Corporations were the third-largest investor segment with $285 billion, or 9.2% of money fund shares. They rose by $14 billion, or 5.3%, in the latest quarter. Funding Corporations have increased by $20 billion, or 7.7%, over the previous 12 months.
The fourth-largest segment, Private Pension Funds held 5.0% of money fund assets ($155 billion) –- up slightly by 0.3% for the quarter, and down $2 billion, or -1.5%, for the year. Nonfinancial Noncorporate Businesses, which held $114 billion (3.7%), were in 5th place. The Rest Of The World category remained in sixth place in market share among investor segments with 3.4%, or $105 billion, while Life Insurance Companies held $54 billion (1.7%), State and Local Government Retirement Funds held $48 billion (1.6%), State and Local Governments held $25 billion (0.8%) and Property-Casualty Insurance held $20 billion (0.7%), and 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 $1.862 trillion, or 60.4% of the total. Debt securities includes: Open market paper ($194 billion, or 6.3%; we assume this is CP), Treasury securities ($874 billion, or 28.3%), Agency and GSE-backed securities ($644 billion, or 20.9%), Municipal securities ($143 billion, or 4.6%), and Corporate and foreign bonds ($8 billion, or 0.3%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($1.020 trillion, or 33.1%) and Time and savings deposits ($191 billion, or 6.2%). Money funds also hold minor positions in Foreign deposits ($2 billion, or 0.0%), Miscellaneous assets ($8 billion, or 0.3%), and Checkable deposits and currency ($-44 billion, -1.4%). Note: The Fed also lists "Variable Annuity Money Funds;" they currently total $38 billion.
During Q4, Debt Securities were up $139 billion. This subtotal included: Open Market Paper (down $1 billion), Treasury Securities (up $106 billion), Agency- and GSE-backed Securities (up $24 billion), Municipal Securities (up $12 billion), and Corporate and Foreign Bonds (down $2 billion). In the fourth quarter of 2018, Security Repurchase Agreements were up $99 billion, Foreign Deposits were down $1 billion, Checkable Deposits and Currency were down $63 billion, Time and Savings Deposits were down $4 billion, and Miscellaneous Assets were up $1 billion.
Over the 12 months through 12/31/18, Debt Securities were up $182B, which included Open Market Paper up $41B, Treasury Securities up $171B, Agencies down $38B, Municipal Securities (up $8B), and Corporate and Foreign Bonds (down $1B). Foreign Deposits were down $2B, Checkable Deposits and Currency were down $66B, Time and Savings Deposits were up $12B, Securities repurchase agreements were up $63B, and Miscellaneous Assets were up $2B.
Note that the Federal Reserve changed its numbers related to money market funds substantially in the second quarter of 2018. "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."
