The ICI's latest weekly "Money Market Fund Assets" shows that assets rose for the fifth week in a row, rising by $87.5 billion after falling $55.3 billion the week including April 15. They've moved into the black year-to-date, up $83 billion, or 2.7%, and to MMFs' highest level since February 2010. Over the past 52 weeks, ICI's money fund asset series has increased by $305 billion, or 10.8%, with Retail MMFs rising by $190 billion (18.5%) and Inst MMFs rising by $116 billion (6.4%). (For the SEC's latest monthly money fund asset series, see our May 22 News, "SEC Stats: MMF Assets Flat at Just Under $3.5 Tril, Prime Hits $1 Trillion," and see our May MFI XLS for Crane Data's latest monthly MMF asset totals or our MFI Daily for our latest daily series.)
They write, "Total money market fund assets increased by $29.94 billion to $3.13 trillion for the week ended Wednesday, May 22, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $25.41 billion and prime funds increased by $6.22 billion. Tax-exempt money market funds decreased by $1.69 billion." ICI's weekly series shows Institutional MMFs rising $24.7 billion and Retail MMFs rising $5.3 billion. Total Government MMF assets, including Treasury funds, stood at $2.333 trillion (74.5% of all money funds), while Total Prime MMFs rose to $659.2 billion (21.1%). Tax Exempt MMFs totaled $138.7 billion, or 4.4%.
ICI states, "Assets of retail money market funds increased by $5.26 billion to $1.22 trillion. Among retail funds, government money market fund assets increased by $2.62 billion to $693.75 billion, prime money market fund assets increased by $3.35 billion to $392.74 billion, and tax-exempt fund assets decreased by $708 million to $128.64 billion." Retail assets account for over a third of total assets, or 38.8%, and Government Retail assets make up 57.1% of all Retail MMFs.
The release adds, "Assets of institutional money market funds increased by $24.68 billion to $1.92 trillion. Among institutional funds, government money market fund assets increased by $22.79 billion to $1.64 trillion, prime money market fund assets increased by $2.87 billion to $266.49 billion, and tax-exempt fund assets decreased by $978 million to $10.08 billion." Institutional assets accounted for 61.2% of all MMF assets, with Government Institutional assets making up 85.6% of all Institutional MMF totals.
In other news, a press release entitled, "Moody's Assigns A-mf ratings to Schroders Sterling Liquidity Plus and Schroder ISF EURO liquidity, withdraws Aa-bf ratings," tells us, "Moody's Investors Service ("Moody's") has assigned A-mf ratings to the SSSF Sterling Liquidity Plus Fund (Schroders Sterling Liquidity Plus Fund) and SISF - Euro Liquidity (Schroder ISF EURO Liquidity Fund), two standard variable net asset value money market funds (MMF). The funds are domiciled in Luxembourg and comply with the European Union's money market fund rules. At the same time, Moody's withdrew the Aa-bf bond fund ratings of these two funds."
Moody's explains, "In light of the new European MMF rules effective since Jan 21 2019, Schroders has adjusted the investment strategy of the SSSF Sterling Liquidity Plus Fund and SISF Euro Liquidity in line with the expectations of the MMF rules. The funds qualify as standard MMFs. Following the change to the funds' investment objectives, Moody's has decided to change the primary methodology used to rate these funds under to the Money Market Funds rating methodology from Moody's Bond Fund Rating Methodology."
They write, "The Funds' A-mf ratings reflect Moody's expectation that those funds will have a moderate ability to meet their objectives of providing liquidity and preserving capital. The funds were previously rated by Moody's under the Bond Fund methodology as ultra-short duration BFs. They now operate under a standard variable net asset value (VNAV) MMF structure. They offer a t+1 settlement and continue to be managed by the same team. The investors in the funds are internal funds as well as institutional entities such as corporates and insurance companies."
The release says, "The Funds invest in high credit quality securities, primarily commercial paper and deposit securities, short-dated bonds from government, agency, corporate and financial issuers. The Funds' weighted average maturity (WAM) will remain below 180 days and we expect the Funds to maintain an adequate liquidity profile in line with regulatory requirement for Standard VNAV MMFs. As a result, Moody's expects the Funds to have moderate exposure to market risk."
It adds, "As of end of March 2019, the average credit quality of SSSF Sterling Liquidity Plus Fund as measured by Moody's credit matrix was Aa2. The fund had a WAM of 142 days, 13% of the fund was invested in overnight securities and the adjusted NAV was 0.9828 mapping to a score of 4, in line with Moody's expectation for an A-mf MMF."
Finally, Moody's comments, "As of end of March 2019, the average credit quality of SISF - Euro Liquidity as measured by Moody's credit matrix was Aa2. The fund had a WAM of 119 days, 14% of the fund was invested in overnight securities and the adjusted NAV was 0.9833 mapping to a score of 4, in line with Moody's expectation for an A-mf MMF. Schroders is the investment manager of the funds. Both are part of Schroders which managed GBP 8 billion in liquidity strategies at the end of 2018." (Note: Crane Data currently does not track this fund, but we'll be looking to add this to our Money Fund Intelligence International in coming weeks.)
