The ICI released its "Trends in Mutual Fund Investing" and its "Month-End Portfolio Holdings of Taxable Money Funds" for May 2020 late yesterday. The former report shows that money fund assets increased by $31.8 billion to $4.769 trillion in May, after increases of $399.4 billion in April, $690.6 billion in March and $32.9 billion in February. For the 12 months through May 31, 2020, money fund assets have increased by a breath-taking $1.609 trillion, or 50.9%. (Crane Data's separate MFI Daily series shows money fund assets decreasing by $85.5 billion month-to-date in June through 6/26.)

ICI's monthly "Trends" release states, "The combined assets of the nation's mutual funds increased by $701.32 billion, or 3.4 percent, to $21.16 trillion in May, according to the Investment Company Institute's official survey of the mutual fund industry. In the survey, mutual fund companies report actual assets, sales, and redemptions to ICI."

It explains, "Bond funds had an inflow of $43.16 billion in May, compared with an outflow of $7.21 billion in April.... Money market funds had an inflow of $30.63 billion in May, compared with an inflow of $398.25 billion in April. In May funds offered primarily to institutions had an inflow of $20.08 billion and funds offered primarily to individuals had an inflow of $10.54 billion."

ICI's latest statistics show that both Taxable MMFs gained assets last month, while Tax Exempt MMFs lost assets. Taxable MMFs increased by $34.0 billion in May to $4.635 trillion. Tax-Exempt MMFs decreased $2.2 billion to $133.8 billion. Taxable MMF assets increased year-over-year by $1.611 trillion (53.3%), while Tax-Exempt funds fell by $1.9 billion over the past year (-1.4%). Bond fund assets increased by $12.0 billion in May (2.7%) to $4.598 trillion; they've risen by $22.0 billion (5.0%) over the past year.

Money funds represent 22.5% of all mutual fund assets (down 0.7% from the previous month), while bond funds account for 21.7%, according to ICI. The total number of money market funds was 358, down 2 from the month prior and down from 368 a year ago. Taxable money funds numbered 278 funds, and tax-exempt money funds numbered 80 funds.

ICI's "Month-End Portfolio Holdings" confirms a big jump in Treasuries and a drop in Repo and Agencies last month. Treasury holdings in Taxable money funds remained in first place among composition segments; after passing Repo in April. Treasury holdings increased by $342.5 billion, or 17.6%, to $2.293 trillion, or 49.5% of holdings. Treasury securities have increased by $1.545 trillion, or 206.6%, over the past 12 months. (See our June 10 News, "June Portfolio Holdings: Treasuries Skyrocket; Repo, Agencies Plunge.")

Repurchase Agreements were in second place among composition segments; they decreased by $215.5 billion, or -17.3%, to $1.032 trillion, or 22.3% of holdings. Repo holdings have dropped $91.8 billion, or -8.2%, over the past year. U.S. Government Agency securities were the third largest segment; they decreased $97.5 billion, or -9.8%, to $894.6 trillion, or 19.3% of holdings. Agency holdings have risen by $206.5 billion, or 30.0%, over the past 12 months.

Certificates of Deposit (CDs) stood in fourth place; they decreased by $10.8 billion, or -4.3%, to $238.7 billion (5.1% of assets). CDs held by money funds shrunk by $1.7 billion, or -0.7%, over 12 months. Commercial Paper remained in fifth place, up $5.5 billion, or 2.7%, to $213.0 billion (4.6% of assets). CP has decreased by $10.5 billion, or -4.7%, over one year. Other holdings increased to $32.1 billion (0.7% of assets), while Notes (including Corporate and Bank) were down to $7.3 billion (0.2% of assets).

The Number of Accounts Outstanding in ICI's series for taxable money funds decreased by 8.686 million to 39.308 million, while the Number of Funds was down two at 278. Over the past 12 months, the number of accounts rose by 4.458 million and the number of funds decreased by nine. The Average Maturity of Portfolios was 43 days, three more than in April. Over the past 12 months, WAMs of Taxable money have increased by 13.

In other news, money market fund yields continue to bottom out around 1/8th of a percent above zero, as our flagship Crane 100 inched down by just one basis point to 0.12%. The Crane 100 Money Fund Index fell below the 1.0% level in mid-March and below the 0.5% level in late March. It is down from 1.46% at the start of the year and down from 2.23% at the beginning of 2019. Over half of all money funds and over one quarter of MMF assets have since landed on the zero yield floor, though many continue to show some yield.

According to our Money Fund Intelligence Daily, as of Friday, 6/26, 475 funds (out of 849 total) yield 0.00% or 0.01% with assets of $1.465 trillion, or 29.1% of the total. There are 179 funds yielding between 0.02% and 0.10%, totaling $1.305 trillion, or 25.9% of assets; 121 funds yielded between 0.11% and 0.25% with $1.650 trillion, or 32.8% of assets; 71 funds yielded between 0.26% and 0.50% with $535.5 billion in assets, or 10.6%; and just three funds yield between 0.51% and 0.99% with $81.9 billion in assets or 1.6% (no funds yield over 1.00%).

The Crane Money Fund Average, which includes all taxable funds tracked by Crane Data (currently 671), shows a 7-day yield of 0.08%, down a basis point in the week through Friday, 6/26. The Crane Money Fund Average is down 39 bps from 0.47% at the beginning of April. Prime Inst MFs were down 1 basis point to 0.20% in the latest week and Government Inst MFs were flat at 0.06%. Treasury Inst MFs were unchanged at 0.05%. Treasury Retail MFs currently yield 0.01%, (unchanged in the last week), Government Retail MFs yield 0.02% (down a basis point in the last week), and Prime Retail MFs yield 0.11% (down a basis point for the week), Tax-exempt MF 7-day yields were unchanged at 0.04%. (Let us know if you'd like to see our latest MFI Daily.)

The largest funds tracked by Crane Data yielding 0.00% or 0.01% include: Fidelity Govt Cash Reserves ($200.2B), Fidelity Government Money Market ($192.4B), Fidelity Treasury Fund ($29.2B) and Edward Jones Money Mkt Inv ($22.5B).

Our Crane Brokerage Sweep Index, which hit the zero floor a little over two months ago, remains at 0.01%. The latest Brokerage Sweep Intelligence, with data as of June 26, shows no changes in the last week. All of the major brokerages now offer rates of 0.01% for balances of $100K. No brokerage sweep rates or money fund yields have gone negative to date, but this could become a distinct possibility in coming weeks or months. Crane's Brokerage Sweep Index has been flat for the last ten weeks at 0.01% (for balances of $100K). Ameriprise, E*Trade, Fidelity, Merrill Lynch, Morgan Stanley, Raymond James, RW Baird, Schwab, TD Ameritrade, UBS and Wells Fargo all currently have rates of 0.01% for balances at the $100K tier level (and almost every other tier too).

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