Crane Data published its latest Weekly Money Fund Portfolio Holdings statistics Tuesday, which track a shifting subset of our monthly Portfolio Holdings collection. The most recent cut (with data as of Dec. 31, 2020) includes Holdings information from 92 money funds (up 23 funds from two weeks ago), which represent $2.593 trillion (up from $1.913 trillion) of the $4.711 trillion (55.0%) in total money fund assets tracked by Crane Data. (Our Weekly MFPH are e-mail only and aren't available on the website. We didn't publish last week due to the Holidays.)
Our latest Weekly MFPH Composition summary again shows Government assets dominating the holdings list with Treasury totaling $1.387 trillion (up from $1.040 trillion two weeks ago), or 53.5%, Repurchase Agreements (Repo) totaling $630.2 billion (up from $450.9 billion two weeks ago), or 24.3% and Government Agency securities totaling $326.4 billion (up from $258.3 billion), or 12.6%. Commercial Paper (CP) totaled $99.1 billion (up from $60.1 billion), or 3.8%, and Certificates of Deposit (CDs) totaled $60.3 billion (up from $49.1 billion), or 2.3%. The Other category accounted for $52.8 billion or 2.0%, while VRDNs accounted for $37.6 billion, or 1.4%.
The Ten Largest Issuers in our Weekly Holdings product include: the US Treasury with $1.391 trillion (53.6% of total holdings), Federal Home Loan Bank with $164.9B (6.4%), Fixed Income Clearing Corp with $91.9B (3.5%), BNP Paribas with $83.3B (3.2%), Federal Farm Credit Bank with $65.9B (2.5%), RBC with $56.3B (2.2%), Federal National Mortgage Association with $56.3B (2.2%), JP Morgan with $41.5B (1.6%), Federal Home Loan Mortgage Corp with $36.9B (1.4%) and Mitsubishi UFJ Financial Group Inc with $33.6B (1.3%).
The Ten Largest Funds tracked in our latest Weekly include: JPMorgan US Govt MM ($192.5 billion), Goldman Sachs FS Govt ($163.9B), Fidelity Inv MM: Govt Port ($142.9B), BlackRock Lq FedFund ($142.2B), Wells Fargo Govt MM ($139.0B), BlackRock Lq T-Fund ($117.3B), Federated Hermes Govt ObI ($110.9B), Morgan Stanley Inst Liq Govt ($103.2B), JPMorgan 100% US Treas MMkt ($92.4B) and Dreyfus Govt Cash Mgmt ($82.3B). (Let us know if you'd like to see our latest domestic U.S. and/or "offshore" Weekly Portfolio Holdings collection and summary, or our Bond Fund Portfolio Holdings data series.)
In other news, the latest Independent Adviser for Vanguard Investors newsletter features a piece entitled, "Looking Back: 2020 Year in Review," which reviews major Vanguard news over the past year, much of which involved money market funds. Editor Dan Wiener writes, "2020 was a year for the history books.... In the bond market, the Fed cut interest rates to the near-zero-bound, and the yield on the 10-year Treasury hit a new low. Here are the events in Malvern and beyond that caught our attention."
In March, he explains, "The Fed cuts rates to 0.00% to 0.25% and launches credit facilities to keep the bond markets functioning." In April, "Vanguard closes Treasury Money Market to new investors," and in July, "Pennsylvania Municipal Money Market's yield falls to 0.01%." In August, the publication says, "Vanguard reopens Treasury Money Market and announces that Prime Money Market will become Cash Reserves Federal Money Market in September."
He adds that in September "Prime Money Market's yield hits 0.01%. Shortly after, Vanguard recasts the fund as Cash Reserves Federal Money Market, closes the Investor shares and lowers the minimum on the Admiral shares from $5 million to $3,000.... Vanguard also announces plans to close New Jersey and Pennsylvania Municipal Money Market."
In December, Wiener writes, "Vanguard begins waiving fees on Municipal Money Market and New York Municipal Money Market while lowering the minimum on Treasury Money Market to $3,000." For more, see Crane Data's News stories: MF Assets Inch Lower, But Prime Plunges on Vanguard Shift; Confluence (10/2/20); Barron's on Vanguard Muni Retreat (9/30/20); SEC's Blass on Push for More MMF Reforms; Vanguard Liquidating PA, NJ (9/29/20); Vanguard Market Liquidity Changes (8/31/20); and, Vanguard Prime Money Market Fund Going Government; ICI's July Trends (8/28/20).
Finally, Marketwatch published the Opinion piece, "Investors are waiting for 'cash on the sidelines' to juice the stock market - this is why that idea is hogwash." It tells us, "Lance Roberts explains why money won't soon pour into the stock market from bank and money market accounts.... In the later stages of a bull market, the financial media and Wall Street analysts seek out rationalizations to support their views. A common refrain: 'There are trillions of dollars in cash sitting on the sidelines just waiting to come into the market.'"
The article explains, "Except ... there isn't. The reality is that, if investors haven't drained their bank accounts after four rounds of quantitative easing (QE) led by the U.S. Federal Reserve, a 400% advance in the markets and ongoing global QE, precisely what is it going to take? ... With professional investors leveraging their bets, there isn't much excess cash sitting around."
It adds, "Mutual fund managers are also holding record low levels of cash.... There are a few things we need to consider concerning money market funds.... [Y]ou will notice that the bulk of the money is in government money market funds. Those particular types of money market funds generally have much higher account minimums (from $100,000 to $1 million), suggesting the funds are not retail investors. (Those would be the smaller balances of prime retail funds.)"
Marketwatch writes, "As noted, much of the 'cash on the sidelines' is held by corporations. As we said in 'A major support for assets has reversed,' that isn't a surprise: 'CEOs make decisions on how they use their cash. If concerns of a recession persist, companies will become more conservative on the use of their cash, rather than continuing to repurchase shares.'"
