Money fund assets blasted through the $3.2 trillion level as Institutional MMFs surged to $2.0 trillion in the latest week. The Investment Company Institute’s new "Money Market Fund Assets" series shows that MMF assets rose for the 11th week in a row. They’ve increased by $195.5 billion, or 6.4%, since April 17. Money fund assets have increased by $145 billion, or 4.8%, year-to-date, according to ICI's weekly series, MMFs' highest level since February 2010. Over the past 52 weeks, ICI's money fund asset series has increased by $417 billion, or 14.8%, with Retail MMFs rising by $206 billion (20.0%) and Inst MMFs rising by $210 billion (11.8%).
They write, "Total money market fund assets increased by $46.17 billion to $3.24 trillion for the six-day period ended Tuesday, July 2, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $40.41 billion and prime funds increased by $3.03 billion. Tax-exempt money market funds increased by $2.73 billion." ICI's weekly series shows Institutional MMFs rising $36.2 billion and Retail MMFs rising $10.0 billion. Total Government MMF assets, including Treasury funds, stood at $2.423 trillion (74.8% of all money funds), while Total Prime MMFs rose to $676.4 billion (20.9%). Tax Exempt MMFs totaled $139.0 billion, or 4.3%.
ICI states, "Assets of retail money market funds increased by $9.97 billion to $1.24 trillion. Among retail funds, government money market fund assets increased by $5.89 billion to $705.15 billion, prime money market fund assets increased by $2.42 billion to $406.97 billion, and tax-exempt fund assets increased by $1.66 billion to $127.23 billion." Retail assets account for over a third of total assets, or 38.3%, and Government Retail assets make up 56.9% of all Retail MMFs.
The release adds, "Assets of institutional money market funds increased by $36.20 billion to $2.00 trillion. Among institutional funds, government money market fund assets increased by $34.52 billion to $1.72 trillion, prime money market fund assets increased by $611 million to $269.45 billion, and tax-exempt fund assets increased by $1.06 billion to $11.77 billion." Institutional assets accounted for 61.7% of all MMF assets, with Government Institutional assets making up 85.9% of all Institutional MMF totals.
Crane Data’s separate and broader Money Fund Intelligence Daily series shows money fund assets rising by $37.0 billion to $3.363 trillion in the week through July 2, 2019. Watch for the latest monthly totals in our Money Fund Intelligence and MFI XLS, which go out to subscribers on Monday morning. The preliminary totals for our even broader monthly series show assets rising $41.4 billion to $3.543 trillion in June. Crane Data’s Peter Crane predicted at our recent Money Fund Symposium that money fund totals will rise by over 20% in 2019, given the much stronger seasonal nature of MMF flows during the second half of the year.
In other news, Wells Fargo Securities' Garret Sloan asked last week, "Could A Decline in Rates Mean A Decline in MMF Assets?" He explained, "The Crane Money Fund Symposium is entering its third and final day in Boston. The conference began in the wake of dovish commentary at the FOMC meeting last week. One question linking money funds and the fed funds market is whether the dovish about-face could mark an inflection point in money fund asset growth?"
Sloan continued, "Pete Crane was quoted by Bloomberg as saying that the fund industry may have reached 'the peak'. For a time, many U.S. media outlets were running stories with some derivation on the phrase 'cash is king'. The rise in interest rates has unquestionably been one of the features that has spurred the growth of money market fund balances, which have swelled to a post-crisis record. At $3.18 billion, assets are at their highest point since 2010."
He added, "Government funds today have surpassed the pre-crisis prime fund asset peak. The week of September 10, 2008 (an ominous date to be sure), prime funds peaked at $2.136 billion. Prime funds now sit at $673 billion, which is quite a recovery considering that they fell to $380 billion following 2016's money market fund reform. Government funds have climbed to $2.375 trillion, with Treasury/Agency funds taking the lion's share of the government fund sector. They currently hold $1.68 trillion in assets, while Treasury/Repo funds currently hold $695 billion."
