The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (formerly the "Flow of Funds") Monday. Among the 4 tables it includes on money market mutual funds, the Second Quarter 2020 edition shows that Total MMF Assets increased by $298 billion to $4.636 trillion in Q2'20. The Household Sector, by far the largest investor segment with $2.615 trillion, saw assets jump in Q2, while the next largest segments, Other Financial Businesses and Nonfinancial Corporate Businesses, also saw assets surge from the massive coronavirus cash buildup.
The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also show a big asset increase in MMF holdings for the Rest of the World category in Q2 2020. Private Pension Funds, Nonfinancial Noncorporate Business, Life Insurance Companies and State & Local Government Retirement, State & Local Govts and Property-Casualty Insurance also all saw assets increase in Q2; no segments saw decreases. Over the past 12 months, the Household Sector, Nonfinancial Corporate Businesses and Other Financial Business showed the biggest asset increases. Every category saw increases over the past year.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $298 billion, or 6.9%, in the second quarter to $4.636 trillion. Over the year assets were up $1.430 trillion, or 44.6%. The largest segment, the Household sector, totals $2.615 trillion, or 56.4% of assets. The Household Sector jumped by $197 billion, or 8.2%, in the quarter, after increasing $214 billion in Q1'20. Over the past 12 months through Q2'20, Household assets were up $703 billion, or 36.8%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $962 billion, or 20.8% of the total. Assets here rose by $46 billion in the quarter, or 5.0%, and they've increased by $470 billion, or 95.5%, over the past year. Other Financial Business was the third-largest investor segment with $417 billion, or 9.0% of money fund shares. They rose by $29 billion, or 7.4%, in the latest quarter. Other Financial Business has increased by $122 billion, or 41.5%, over the previous 12 months.
The fourth-largest segment, The Rest of the World, category held $165 billion (3.6%). Private Pension Funds was in 5th place, it held 3.5% of money fund assets ($164 billion), up by $1 billion (0.3%) for the quarter, and up $4 billion, or 2.6%. The Nonfinancial Noncorporate Business remained sixth place in market share among investor segments with 2.7%, or $125 billion, while Life Insurance Companies held $94 billion (2.0%), State and Local Governments held $34 billion (0.7%), State and Local Government Retirement Funds held $31 billion (0.7%) and Property-Casualty Insurance held $28 billion (0.6%) 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 $3.544 trillion, or 76.5% of the total. Debt securities includes: Open market paper ($219 billion, or 4.7%; we assume this is CP), Treasury securities ($2.350 trillion, or 50.7%), Agency and GSE-backed securities ($826 billion, or 17.8%), Municipal securities ($137 billion, or 2.9%) and Corporate and foreign bonds ($13 billion, or 0.3%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($906 billion, or 19.5% of total assets) and Time and savings deposits ($215 billion, or 4.6%). Money funds also hold minor positions in Miscellaneous assets ($13 billion, or 0.3%), Foreign deposits ($2 billion, 0.0%) and Checkable deposits and currency (-$45 billion, -1.0%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $45 billion.
During Q2, Debt Securities were up $976 billion. This subtotal included: Open Market Paper (down $6 billion), Treasury Securities (up $1.082 trillion), Agency- and GSE-backed Securities (down $105 billion), Corporate and Foreign Bonds (down $1 billion) and Municipal Securities (up $6 billion). In the second quarter of 2020, Security Repurchase Agreements were down a massive $562 billion, Foreign Deposits were down $2 billon, Checkable Deposits and Currency were down $19 billion, Time and Savings Deposits were down by $24 billion, and Miscellaneous Assets were down $70 billion.
Over the 12 months through 6/30/20, Debt Securities were up $1.745 trillion, which included Open Market Paper down $13B, Treasury Securities up $1.606T, Agencies up $150B, Municipal Securities (up $1), and Corporate and Foreign Bonds (up $1B). Foreign Deposits were flat, Checkable Deposits and Currency were down $48B, Time and Savings Deposits were down $44B, Securities repurchase agreements were down $227B 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."
