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 2019 edition shows that Total MMF Assets increased by $192 billion to $3.634 trillion in Q4'19. The Household Sector, by far the largest investor segment with $2.148 trillion, saw assets jump, as did the next largest segments, Nonfinancial Corporate Businesses and Other Financial Business (formerly Funding Corporations). Treasuries accounted for the biggest increase in money fund assets in Q4, but Repos and Agencies jumped as well. (Note: In other news, the Federal Reserve Board made an emergency move to cut its Federal funds rate by 100 basis points to a range of 0.00 to 0.25%. See the FOMC Statement here.)
The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also show a slight asset increase in MMF holdings for the Rest of the World category in Q4 2019. Private Pension Funds, Nonfinancial Noncorporate Business, State & Local Govts, Property-Casualty Insurance, Life Insurance Companies and State & Local Government Retirement also saw assets inch higher in Q3. No categories saw decreases. 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 $201 billion, or 5.8%, in the fourth quarter to $3.643 trillion. Over the year through Dec. 31, 2019, assets were up $605 billion, or 19.9%. The largest segment, the Household sector, totals $2.148 trillion, or 59.0% of assets. The Household Sector increased by $85 billion, or 4.1%, in the quarter, after increasing $156 billion in Q3'19. Over the past 12 months through Q4'19, Household assets were up $348 billion, or 19.4%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $577 billion, or 15.8% of the total. Assets here rose by $49 billion in the quarter, or 9.2%, and they've increased by $111 billion, or 23.7%, over the past year. Other Financial Business was the third-largest investor segment with $309 billion, or 8.5% of money fund shares. They rose by $41 billion, or 15.1%, in the latest quarter. Other Financial Business has increased by $74 billion, or 31.6%, over the previous 12 months.
The fourth-largest segment, Private Pension Funds held 4.5% of money fund assets ($165 billion), up by $1 billion (0.5%) for the quarter, and up $3 billion, or 2.0%, for the year. The Rest of the World, category which held $130 billion (3.6%), was in 5th place. The Nonfinancial Noncorporate Business dropped to sixth place in market share among investor segments with 3.1%, or $114 billion, while State and Local Government Retirement Funds held $68 billion (1.8%), Life Insurance Companies held $63 billion (1.7%), Property-Casualty Insurance held $36 billion (1.0%), and State and Local Governments held $25 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 $2.181 trillion, or 59.9% of the total. Debt securities includes: Open market paper ($237 billion, or 6.5%; we assume this is CP), Treasury securities ($1.037 billion, or 28.4%), Agency and GSE-backed securities ($755 billion, or 20.7%), Municipal securities ($134 billion, or 3.7%) and Corporate and foreign bonds ($19 billion, or 0.5%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($1.175 trillion, or 32.3%) and Time and savings deposits ($259 billion, or 7.1%). Money funds also hold minor positions in Miscellaneous assets ($11 billion, or 0.3%), Foreign deposits ($7 billion, 0.2%) and Checkable deposits and currency ($1 billion, 0.0%). Note: The Fed also lists "Variable Annuity Money Funds;" they currently total $35 billion.
During Q4, Debt Securities were up $152 billion. This subtotal included: Open Market Paper (down $5 billion), Treasury Securities (up $91 billion), Agency- and GSE-backed Securities (up $59 billion), Corporate and Foreign Bonds (up $2 billion) and Municipal Securities (up $4 billion). In the fourth quarter of 2019, Security Repurchase Agreements were up $3 billion, Foreign Deposits were up $4 billon, Checkable Deposits and Currency were up $32 billion, Time and Savings Deposits were up by $3 billion, and Miscellaneous Assets were unchanged.
Over the 12 months through 12/31/19, Debt Securities were up $319B, which included Open Market Paper up $44B, Treasury Securities up $163B, Agencies up $110B, Municipal Securities (down $9), and Corporate and Foreign Bonds (up $11B). Foreign Deposits were up $6 billon, Checkable Deposits and Currency were up $45B, Time and Savings Deposits were up $68B, Securities repurchase agreements were up $156B 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. 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."
