The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (a.k.a. "Flow of Funds") Thursday. Among the 4 tables it includes on money market mutual funds, the Fourth Quarter 2020 edition shows that Total MMF Assets decreased by $74 billion to $4.336 trillion in Q4'20. The Household Sector, by far the largest investor segment with $2.419 trillion, saw assets drop in Q4, after a massive buildup in the first half of 2020. The second largest segment, Nonfinancial Corporate Businesses, also experienced a drop in assets. The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also show asset decreases in MMF holdings for the Other Financial Business (formerly Funding Corps) and Life Insurance Companies categories in Q4 2020.
Private Pension Funds, the Rest of the World and State & Local Governments also saw small asset decreases in Q4. No segments increased over the last quarter, but the Nonfinancial Noncorporate Business, Property-Casuality Insurance and State&Local Govt Retirement sectors remained unchanged. Over the past 12 months, the Nonfinancial Corporate Businesses, Household Sector and Other Financial Business showed the biggest asset increases. Every category except Property-Casualty Insurance and the Rest of the World saw increases over the past year.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets decreased by $74 billion, or -1.7%, in the fourth quarter to $4.336 trillion. For all of 2020, assets were up $693 billion, or 19.0%. The largest segment, the Household sector, totals $2.419 trillion, or 55.8% of assets. The Household Sector fell by $49 billion, or -2.0%, in the quarter. Over the past 12 months through Q4'20, Household assets were up $215 billion, or 9.7%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $916 billion, or 21.1% of the total. Assets here fell by $11 billion in the quarter, or -1.2%, but they've increased by $358 billion, or 64.1%, over the past year. Other Financial Business was the third-largest investor segment with $443 billion, or 10.2% of money fund shares. They fell by $6 billion, or -1.3%, in the latest quarter. Other Financial Business has increased by $105 billion, or 31.1%, over the previous 12 months.
The fourth-largest segment, Private Pension Funds , held $162 billion (3.7%). The Rest of the World, was the 5th largest category with 2.9% of money fund assets ($127 billion); it was down by $2 billion (-1.7%) for the quarter and down $2 billion, or -1.9% over the last 12 months. The Nonfinancial Noncorporate Business remained sixth place in market share among investor segments with 2.8%, or $120 billion, while Life Insurance Companies held $71 billion (1.6%), State and Local Governments held $32 billion (0.7%), State and Local Government Retirement Funds held $24 billion (0.5%), Property-Casualty Insurance also held $24 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 $3.185 trillion, or 73.5% of the total. Debt securities includes: Open market paper ($173 billion, or 4.0%; we assume this is CP), Treasury securities ($2.256 trillion, or 52.0%), Agency and GSE-backed securities ($630 billion, or 14.5%), Municipal securities ($113 billion, or 2.6%) and Corporate and foreign bonds ($13 billion, or 0.3%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($1.006 trillion, or 23.2% of total assets) and Time and savings deposits ($141 billion, or 3.2%). Money funds also hold minor positions in Miscellaneous assets ($11 billion, or 0.2%), Foreign deposits ($1 billion, 0.0%) and Checkable deposits and currency (-$7 billion, -0.2%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $41 billion.
During Q4, Debt Securities were down $105 billion. This subtotal included: Open Market Paper (down $5 billion), Treasury Securities (down $19 billion), Agency- and GSE-backed Securities (down $70 billion), Corporate and Foreign Bonds (down $4 billion) and Municipal Securities (down $9 billion). In the fourth quarter of 2020, Security Repurchase Agreements were up $9 billion, Foreign Deposits were flat, Checkable Deposits and Currency were up $67 billion, Time and Savings Deposits were down by $40 billion, and Miscellaneous Assets were down $5 billion.
Over the 12 months through 12/31/20, Debt Securities were up $1.004 trillion, which included Open Market Paper down $64B, Treasury Securities up $1.220T, Agencies down $125B, Municipal Securities (down $21), and Corporate and Foreign Bonds (down $6B). Foreign Deposits were down $7B, Checkable Deposits and Currency were down $9B, Time and Savings Deposits were down $118B, Securities repurchase agreements were down $169B and Miscellaneous Assets were flat.
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."
