As we wrote on Monday, the Investment Company Institute recently published its "2021 Investment Company Fact Book," an annual compilation of statistics and commentary on the mutual fund industry. We reviewed much of the money fund content in our May MFI newsletter piece, "ICI 2021 Fact Book Shows Money Fund Trends in '20," in our May 17 News, "ICI's 2021 Fact Book Reviews U.S. and Worldwide Money Funds Trends," and in our May 6 Link of the Day, "ICI Publishes 2021 Fact Book." But below we focus on the numerous "Data Tables" involving "Money Market Mutual Funds, which start on page 244. ICI lists annual statistics on shareholder accounts, the number of funds, net assets, net new cash flows, paid and reinvested dividends, composition of prime and government funds, and net assets of institutional investors by type of institution. (Note: Thanks to those who attended our "Handicapping Money Fund Reforms" webinar yesterday! For those that missed it, you can see the recording here.)
ICI's annual statistics show that there's been a steady decline in the number of money market mutual funds over the last 16 years. (See Table 35 on page 244.) In 2020, according to the Fact Book, there were a total of 340 money funds, down from 364 in 2019, 802 in 2007, and down from 1,014 in 2001. The number of share classes stood at 1,108 in 2020, down from 1,126 in 2018 and 1,998 in 2008.
Table 36 on page 245, "Money Market Funds: Total Net Assets by Type of Fund," shows that total net assets in taxable U.S. money market funds increased $701.3 billion to $4.333 trillion in 2020. At year-end 2020, $2.804 trillion (64.7%) was in institutional money market funds, while $1.529 trillion (35.3%) was in retail money market funds. Breaking the numbers down by fund type, $542.9 billion (12.5%) was in prime funds, $3.685 trillion (85.0%) was in government money market funds, and $105.5 billion (2.4%) was in tax-exempt accounts.
Also, Table 37 on page 246, "Money Market Funds: Net New Cash Flow by Type of Fund," shows that there was $690.8 billion in net new cash flow into money market funds last year. A closer look at the data shows $535.5 billion in net new cash flow into institutional funds and a $155.3 billion cash inflow into retail funds. There were also $834.5 billion in net inflows into Government funds, versus $111.0 billion in net outflows from Prime funds.
Table 39 (page 248), "Money Market Funds: Paid and Reinvested Dividends by Type of Fund," shows dividends paid by money funds were $17.5 billion, $9.2 billion of which was reinvested (52.6%). Dividends have been as high as $127.9 billion in 2007 (when rates were over 5%), and as low as $5.2 billion in 2011 (when rates were 0.05%). Reinvestment rates were 64.4% in 2007 and 62.3% in 2011, so they've remained relatively stable over the past decade.
ICI's Tables 40 and 41 on pages 249 and 250, "Taxable Government Money Market Funds: Asset Composition as a Percentage of Total Net Assets" and "Taxable Prime Money Market Funds: Asset Composition," show that of the $3.685 trillion in taxable government money market funds, 17.0% were in U.S. government agency issues, 23.5% were in Repurchase agreements, 48.5% were in U.S. Treasury bills, 11.1% were in Other Treasury securities, and 0.0% was in "Other" assets. The average maturity was 49 days, up 11 days from the end of 2019.
The second table shows that of the $542.9 billion in Prime funds at year-end 2020, 25.8% was in Certificates of deposit, 30.9% was in Commercial paper, 26.3% was in Repurchase agreements, 0.4% was in US government agency issues, 4.9% was in Other Treasury securities, 0.6% was in Corporate notes, 0.2% percent was in Bank notes, 6.5% was in US Treasury bills, 0.1% was in Eurodollar CDs, and 4.2% was in Other assets (which includes Banker's acceptances, municipal securities and cash reserves).
Table 60 on page 269, "Total Net Assets of Mutual Funds Held in Individual and Institutional Accounts," shows that there was $1.627 trillion of assets in money funds with Institutional investors, and $2.706 in MMF assets in Individual accounts in 2020.
Finally, Table 62, "Total Net Assets of Institutional Investors in Taxable Money Market Funds by Type of Institution and Type of Fund," shows of the total of $1.619 trillion in Total Institutional assets ($1.508 trillion in Institutional funds and another $110.9 billion in Retail funds), $677.1 billion were held by business corporations (41.8%), $715.5 billion were held by financial institutions (44.2%), $139.8 billion were held by nonprofit organizations (8.6%), and $86.6 billion were held by Other (5.3%).
ICI also released its latest weekly "Money Market Fund Assets" report yesterday, which shows MMFs jumping in the latest week. Money fund assets are up $244 billion, or 5.7%, year-to-date in 2021. Inst MMFs are up $327 billion (11.8%), while Retail MMFs are down $83 billion (-5.4%). Over the past 52 weeks, money fund assets have decreased by $248 billion, or -5.2%, with Retail MMFs falling by $135 billion (-8.5%) and Inst MMFs falling by $114 billion (-3.5%).
ICI's "Assets" release says, "Total money market fund assets increased by $25.26 billion to $4.54 trillion for the week ended Wednesday, May 19, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $33.42 billion and prime funds decreased by $6.72 billion. Tax-exempt money market funds decreased by $1.44 billion." ICI's stats show Institutional MMFs increasing $32.7 billion and Retail MMFs decreasing $7.4 billion. Total Government MMF assets, including Treasury funds, were $3.959 trillion (87.2% of all money funds), while Total Prime MMFs were $488.8 billion (10.8%). Tax Exempt MMFs totaled $93.1 billion (2.0%). (Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're almost $400 billion lower than our asset series.)
It explains, "Assets of retail money market funds decreased by $7.41 billion to $1.44 trillion. Among retail funds, government money market fund assets decreased by $2.58 billion to $1.12 trillion, prime money market fund assets decreased by $3.49 billion to $236.87 billion, and tax-exempt fund assets decreased by $1.33 billion to $83.13 billion." Retail assets account for just under a third of total assets, or 31.8%, and Government Retail assets make up 77.8% of all Retail MMFs.
ICI adds, "Assets of institutional money market funds increased by $32.67 billion to $3.10 trillion. Among institutional funds, government money market fund assets increased by $36.01 billion to $2.84 trillion, prime money market fund assets decreased by $3.23 billion to $251.95 billion, and tax-exempt fund assets decreased by $109 million to $9.95 billion." Institutional assets accounted for 68.2% of all MMF assets, with Government Institutional assets making up 91.5% of all Institutional MMF totals.
