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 First Quarter 2021 edition shows that Total MMF Assets increased by $164 billion to $4.500 trillion in Q1'21. The Household Sector, by far the largest investor segment with $2.783 trillion, saw assets jump in Q1. The second largest segment, Nonfinancial Corporate Businesses, 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, show asset decreases in MMF holdings for the Nonfiancial Corporate Business and Life Insurance Companies categories in Q1 2021. (Reminder: Register for our upcoming "Asian Money Fund Symposium" webinar, which takes place next Thursday, June 17 from 10am-12pm Eastern.)
Other Financial Business (formerly Funding Corps), the Rest of the World, Property-Casuality Insurance and State & Local Governments all saw small asset increases in Q1. The Private Pension Funds and State&Local Govt Retirement sectors remained unchanged. Over the past 12 months, the Household Sector and the Other Financial Business categories showed the biggest asset increases, while Nonfinancial Corporate Businesses saw the biggest asset decrease.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $164 billion, or 3.8%, in the first quarter to $4.500 trillion. The largest segment, the Household sector, totals $2.783 trillion, or 61.9% of assets. The Household Sector rose by $188 billion, or 7.2%, in the quarter. Over the past 12 months through Q1'21, Household assets were up $365 billion, or 15.1%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $629 billion, or 14.0% of the total. Assets here fell by $49 billion in the quarter, or -7.3%, and they've decreased by $291 billion, or -31.7%, over the past year. Other Financial Business was the third-largest investor segment with $520 billion, or 11.6% of money fund shares. They rose by $24 billion, or 4.9%, in the latest quarter. Other Financial Business has increased by $102 billion, or 24.3%, over the previous 12 months.
The fourth-largest segment, Private Pension Funds, held $161 billion (3.6%). The Rest of the World, was the 5th largest category with 2.9% of money fund assets ($132 billion); it was up by $5 billion (3.8%) for the quarter and up $1 billion, or 1.1% over the last 12 months. The Nonfinancial Noncorporate Business remained sixth place in market share among investor segments with 2.5%, or $114 billion, while Life Insurance Companies held $63 billion (1.4%), Property-Casualty Insurance held $39 billion (0.9%), State and Local Governments held $36 billion (0.8%), and State and Local Government Retirement Funds held $24 billion (0.5%), 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 $3.234 trillion, or 71.9% of the total. Debt securities includes: Open market paper ($183 billion, or 4.1%; we assume this is CP), Treasury securities ($2.363 trillion, or 52.5%), Agency and GSE-backed securities ($573 billion, or 12.7%), Municipal securities ($104 billion, or 2.3%) and Corporate and foreign bonds ($13 billion, or 0.3%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($1.056 trillion, or 23.5% of total assets) and Time and savings deposits ($185 billion, or 4.1%). Money funds also hold minor positions in Miscellaneous assets ($77 billion, or 1.7%), Foreign deposits ($2 billion, 0.0%) and Checkable deposits and currency (-$54 billion, -1.2%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $39 billion.
During Q1, Debt Securities were up $49 billion. This subtotal included: Open Market Paper (up $9 billion), Treasury Securities (up $106 billion), Agency- and GSE-backed Securities (down $58 billion), Corporate and Foreign Bonds (were flat) and Municipal Securities (down $9 billion). In the first quarter of 2021, Security Repurchase Agreements were up $50 billion, Foreign Deposits were up $1 billion, Checkable Deposits and Currency were down $46 billion, Time and Savings Deposits were up by $45 billion, and Miscellaneous Assets were up $66 billion.
Over the 12 months through 3/31/21, Debt Securities were up $666 billion, which included Open Market Paper down $43B, Treasury Securities up $1.095T, Agencies down $358B, Municipal Securities (down $27), and Corporate and Foreign Bonds (down $1B). Foreign Deposits were down $2B, Checkable Deposits and Currency were down $28B, Time and Savings Deposits were down $54B, Securities repurchase agreements were down $413B and Miscellaneous Assets were down $7B.
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."
