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 Third Quarter 2019 edition shows that Total MMF Assets increased by $237 billion to $3.443 trillion in Q3'19. The Household Sector, by far the largest investor segment with $2.064 trillion, saw assets jump in Q3, as did the next largest segments, Nonfinancial Corporate Businesses and Other Financial Business (formerly Funding Corporations). Treasuries accounted for the vast majority of the increase in money fund assets in Q3, but Repos and Agencies rose as well.
The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also show slight asset increases in MMF holdings for the Rest of the World, Life Insurance Companies and Property-Casualty Insurance categories in Q3 2019. Nonfinancial Noncorporate Business, State & Local Govts and Private Pension Funds also saw assets inch higher in Q3, while State & Local Govt Retirement MMF holdings saw a big decrease. Over the past 12 months, the Household Sector, Nonfinancial Corporate Businesses and Other Financial Business showed the biggest asset increases. Every category showed increases over the past year.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $237 billion, or 7.4%, in the third quarter to $3.443 trillion. Over the year through Sept. 30, 2019, assets were up $575 billion, or 20.1%. The largest segment, the Household sector, totals $2.064 trillion, or 59.9% of assets. The Household Sector increased by $156 billion, or 8.2%, in the quarter, after increasing $82 billion in Q2'19. Over the past 12 months through Q3'19, Household assets were up $393 billion, or 23.5%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $528 billion, or 15.3% of the total. Assets here rose by $36 billion in the quarter, or 7.4%, and they've increased by $79 billion, or 17.5%, over the past year. Other Financial Business was the third-largest investor segment with $290 billion, or 8.4% of money fund shares. They rose by $32 billion, or 12.2%, in the latest quarter. Other Financial Business has increased by $53 billion, or 22.5%, over the previous 12 months.
The fourth-largest segment, Private Pension Funds held 4.8% of money fund assets ($164 billion), up by $2 billion (0.9%) for the quarter, and up $12 billion, or 7.6%, for the year. Nonfinancial Noncorporate Businesses, which held $112 billion (3.3%), were in 5th place. The Rest of The World category remained in sixth place in market share among investor segments with 3.2%, or $111 billion, while Life Insurance Companies held $60 billion (1.7%), State and Local Government Retirement Funds held $58 billion (1.7%), Property-Casualty Insurance held $34 billion (1.0%), and State and Local Governments held $22 billion (0.7%) 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 $2.030 trillion, or 59.0% of the total. Debt securities includes: Open market paper ($242 billion, or 7.0%; we assume this is CP), Treasury securities ($946 billion, or 27.5%), Agency and GSE-backed securities ($696 billion, or 20.2%), Municipal securities ($130 billion, or 3.8%) and Corporate and foreign bonds ($16 billion, or 0.5%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($1.173 trillion, or 34.1%) and Time and savings deposits ($256 billion, or 7.4%). Money funds also hold minor positions in Foreign deposits ($4 billion, or 0.1%), Miscellaneous assets ($11 billion, or 0.3%) and Checkable deposits and currency (-$30 billion, -0.9%). Note: The Fed also lists "Variable Annuity Money Funds;" they currently total $36 billion.
During Q3, Debt Securities were up $231 billion. This subtotal included: Open Market Paper (up $10 billion), Treasury Securities (up $202 billion), Agency- and GSE-backed Securities (up $20 billion), Corporate and Foreign Bonds (up $4 billion) and Municipal Securities (down $6 billion). In the third quarter of 2019, Security Repurchase Agreements were up $39 billion, Foreign Deposits were up $2 billon, Checkable Deposits and Currency were down $34 billion, Time and Savings Deposits were down by $3 billion, and Miscellaneous Assets were up $1 billion.
Over the 12 months through 9/30/19, Debt Securities were up $306B, which included Open Market Paper up $48B, Treasury Securities down $178B, Agencies up $75B, Municipal Securities (down $1), and Corporate and Foreign Bonds (up $6B). Foreign Deposits were up $2 billon, Checkable Deposits and Currency were down $50B, Time and Savings Deposits were up $61B, Securities repurchase agreements were up $252B and Miscellaneous Assets were up $4B.
Note that the Federal Reserve changed its numbers related to money market funds substantially in the second quarter of 2018. Its "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."
