As we mentioned earlier this week, the Investment Company Institute recently published its "2019 Investment Company Fact Book," an annual compilation of statistics and commentary on the mutual fund industry. (See our May 1 News, "ICI's 2019 Fact Book Reviews Money Funds Globally, MMFs vs. Deposits.") We reviewed the update on worldwide and U.S. domestic money funds in our last piece, but today we focus on the numerous "Data Tables" involving "Money Market Mutual Funds, which start on page 226. ICI lists annual statistics on shareholder accounts, the number of funds, net assets, net new cash flows, paid and reinvested dividends, composition of prime and government funds, and net assets of institutional investors by type of institution.
ICI's annual statistics show that there's been a steady decline in the number of money market mutual funds over the last 15 years. (See Table 35 on page 226.) In 2018, according to the Fact Book, there were a total of 368 money funds, down from 382 in 2017, 802 in 2007, and down from 1,015 in 2001. The number of share classes stood at 1,128 in 2018, down from 1,177 in 2017 and 1,998 in 2008.
Table 36 on page 227, "Money Market Funds: Total Net Assets by Type of Fund," shows that total net assets in taxable U.S. money market funds increased $189.7 billion to $3.037 trillion in 2018. At year-end 2018, $1.850 trillion (61.0%) was in institutional money market funds, while $1.187 trillion (39.1%) was in retail money market funds. Breaking the numbers down by fund type, $564.4 billion (18.6%) was in prime funds, $2.326 trillion (76.6%) was in government money market funds, and $145.3 billion (4.8%) was in tax-exempt accounts.
Also, Table 37 on page 228, "Money Market Funds: Net New Cash Flow by Type of Fund," shows that there was $158.8 billion in net new cash flow into money market funds last year. A closer look at the data shows $6.4 billion in net new cash flow out of institutional funds and a $165.2 billion cash inflow into retail funds. There were also $342.9 billion in net inflows into Government funds, versus $103.3 billion in net outflows from Prime funds.
Table 39 (page 230), "Money Market Funds: Paid and Reinvested Dividends by Type of Fund," shows dividends paid by money funds reached their highest level in 10 years, $42.3 billion, $23.1 billion of which was reinvested (57.8%). Dividends have been as high as $127.9 billion in 2007 (when rates were over 5%), and as low as $5.2 billion in 2011 (when rates were 0.05%). Reinvestment rates were 64.4% in 2007 and 62.3% in 2011, so they've remained relatively stable over the past decade.
ICI's Tables 40 and 41 on pages 231 and 232, "Taxable Government Money Market Funds: Asset Composition as a Percentage of Total Net Assets" and "Taxable Prime Money Market Funds: Asset Composition," show that of the $2.326 trillion in taxable government money market funds, 27.4% were in U.S. government agency issues, 38.6% were in Repurchase agreements, 23.6% were in U.S. Treasury bills, 12.0% were in Other Treasury securities, and -1.7% was in "Other" assets. The average maturity was 31 days, down 2 days from the end of 2017.
The second table shows that of the $565.4 billion in Prime funds at year-end 2018, 33.7% was in Certificates of deposit, 33.4% was in Commercial paper, 21.5% was in Repurchase agreements, 1.0% was in US government agency issues, 0.3% was in Other Treasury securities, 0.8% was in Corporate notes, 0.5% percent was in Bank notes, 7.2% was in US Treasury bills, 0.3% was in Eurodollar CDs, and 1.2% was in Other assets (which includes Banker's acceptances, municipal securities and cash reserves).
Table 60 on page 251, "Total Net Assets of Mutual Funds Held in Individual and Institutional Accounts," shows that there was $1.102 trillion of assets in money funds with Institutional investors and $1.935 in MMF assets in Individual accounts in 2018.
Finally, Table 62, "Total Net Assets of Institutional Investors in Taxable Money Market Funds by Type of Institution and Type of Fund," shows of the total of $1.097 trillion in Total Institutional assets ($1.005 trillion in Institutional funds and another $91.6 billion in Retail funds), $465.5 billion were held by business corporations (42.4%), $468.4 billion were held by financial institutions (42.7%), $95.7 billion were held by nonprofit organizations (8.7%), and $67.3 billion were held by Other (6.1%).
In other news, the ICI's latest weekly "Money Market Fund Assets" shows that assets rose for the second week in a row, after falling three weeks ago on tax payments.
They write, "Total money market fund assets increased by $21.72 billion to $3.07 trillion for the week ended Wednesday, May 1, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $17.49 billion and prime funds increased by $2.37 billion. Tax-exempt money market funds increased by $1.86 billion." ICI's weekly series shows Institutional MMFs rising $18.7 billion while Retail MMFs rose by $3.0 billion. Total Government MMF assets, including Treasury funds, stood at $2.292 trillion (74.6% of all money funds), while Total Prime MMFs rose to $645.5 billion (21.1%). Tax Exempt MMFs totaled $134.5 billion, or 4.4%.
ICI states, "Assets of retail money market funds increased by $3.02 billion to $1.20 trillion. Among retail funds, government money market fund assets decreased by $504 million to $689.68 billion, prime money market fund assets increased by $1.92 billion to $387.09 billion, and tax-exempt fund assets increased by $1.60 billion to $124.91 billion." Retail assets account for over a third of total assets, or 39.1%, and Government Retail assets make up 57.4% of all Retail MMFs.
The release adds, "Assets of institutional money market funds increased by $18.70 billion to $1.87 trillion. Among institutional funds, government money market fund assets increased by $17.99 billion to $1.60 trillion, prime money market fund assets increased by $450 million to $258.43 billion, and tax-exempt fund assets increased by $259 million to $9.61 billion." Institutional assets accounted for 60.9% of all MMF assets, with Government Institutional assets making up 85.7% of all Institutional MMF totals.
