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 2021 edition shows that Total MMF Assets increased by $186 billion to $5.206 trillion in Q4'21. The Household Sector, by far the largest investor segment with $2.944 trillion, saw the biggest asset increase in Q4. The second largest segment, Nonfinancial Corporate Businesses, also experienced a jump in assets. The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also shows big asset increases in MMF holdings for the Other Financial Business and Mutual Funds categories in Q4 2021. (Reminder: We're still taking registrations for our upcoming Bond Fund Symposium in Newport Beach, Calif., March 28-29!)
Private Pension Funds, Life Insurance Companies, Nonfinancial Noncorporate Business, Exchange-traded Funds, the Rest of the World and State & Local Governments categories all saw minor asset increases last quarter. The Property-Casualty Insurance category saw a small asset decrease in Q4, while the State & Local Govt Retirement sector remained unchanged. Over the past 12 months, the Household Sector, Other Financial Business and Mutual Funds categories showed the biggest asset increases, while Life Insurance Companies saw the only asset decrease.
The Federal Reserve made a number of changes to the tables this quarter. Describing a "Money market funds sector data source change," the report says, "The money market mutual funds (MMF) sector (tables F.121 and L.121) has been revised beginning 2010:Q4 to reflect a change in data source to Securities and Exchange Commission Form NMFP. The level of assets and shares outstanding of the sector have increased due to the inclusion of private placement MMFs in the source data. Changes in the level due to changes in the data source in 2010:Q4 are recorded as other volume changes in the Financial Accounts."
On "Mutual funds sector holdings of money market funds," Z.1 tells us, "The mutual funds sector (tables F.122 and L.122) has been revised beginning 2010:Q4 to reflect holdings of money market funds not previously reported on the tables. In addition, holdings of repurchase agreements, commercial paper, corporate bonds, and miscellaneous assets have been revised. Additional and revised holdings are estimated using data from Morningstar and Investment Company Institute.... The exchange-traded funds sector (tables F.124 and L.124) has been revised beginning 2010:Q4 to reflect holdings of money market funds not previously reported on the tables."
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $186 billion, or 3.7%, in the fourth quarter to $5.206 trillion. The largest segment, the Household sector, totals $2.944 trillion, or 56.6% of assets. The Household Sector increased by $94 billion, or 3.3%, in the quarter. Over the past 12 months through Dec. 31, 2021, Household assets were up $268 billion, or 10.0%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $694 billion, or 13.3% of the total. Assets here increased by $34 billion in the quarter, or 5.1%, and they've increased by $16 billion, or 2.4%, over the past year. Other Financial Business was the third-largest investor segment with $533 billion, or 10.2% of money fund shares. This category jumped $33 billion, or 6.6%, in the latest quarter. Other Financial Business, which we believe includes Securities Lending, has increased by $52 billion, or 10.7%, over the previous 12 months.
The fourth-largest segment (a new addition to the tables), Mutual Funds, held $321 billion (6.2%). Private Pension Funds, was the 5th largest category with 4.6% of money fund assets ($238 billion); it was up by $4 billion (1.6%) for the quarter and up $18 billion, or 8.1% over the last 12 months. The Rest of World remained sixth place in market share among investor segments with 2.7%, or $139 billion, while ` Nonfinancial Noncorporate Business <b:>`_ held $122 billion (2.3%), Life Insurance Companies held $63 billion (1.2%), Exchange-traded Funds held $42 billion (0.8%), Property-Casualty Insurance held $41 billion (0.8%), State & Local Governments held $38 billion (0.7%) and State & Local Govt Retirement held $32 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 $2.569 trillion, or 49.3% of the total. Debt securities includes: Open market paper ($226 billion, or 4.3%; we assume this is CP), Treasury securities ($1.815 trillion, or 34.9%), Agency and GSE-backed securities ($410 billion, or 7.9%), Municipal securities ($111 billion, or 2.1%) and Corporate and foreign bonds ($7 billion, or 0.1%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($2.496 trillion, or 47.9% of total assets) and Time and savings deposits ($144 billion, or 2.8%). Money funds also hold minor positions in Miscellaneous assets ($-3 billion, or -0.1%) and Foreign deposits ($0 billion, 0.0%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $35 billion.
During Q4, Debt Securities were up $34 billion. This subtotal included: Open Market Paper (down $23 billion), Treasury Securities (up $120 billion), Agency- and GSE-backed Securities (down $64 billion), Corporate and Foreign Bonds (down $3 billion) and Municipal Securities (up $5 billion). In the fourth quarter of 2021, Security Repurchase Agreements were up $232 billion, Foreign Deposits were down $1 billion, Time and Savings Deposits were down by $36 billion, and Miscellaneous Assets were down -107.0%.
Over the 12 months through 12/31/21, Debt Securities were down $956 billion, which included Open Market Paper (down $6B), Treasury Securities (down $651B), Agencies (down $278B), Municipal Securities (down $15B), and Corporate and Foreign Bonds (down $6B). Foreign Deposits were unchanged, Time and Savings Deposits were down $21B, Securities repurchase agreements were up $1.427 trillion and Miscellaneous Assets were down $10B.
The Z.1 L.121 table also added new subtotals for various fund types. They show Stable NAV money market funds with $4,587 billion, or 88.1% of the total (up $231.9 or 5.3% in Q4 and up $459B or 11.1% over 1-year), and Floating NAV money market funds with $619 billion, or 11.9% (down $45.7B or -6.9% in Q4 and down $19B or -3.0% in 2021). Government money market funds total $4.304 trillion, or 82.7% (up $241B or 5.9% in Q4 and up $549B or 14.6% over 1-year), Prime money market funds total $807 billion, or 15.5% (down $51.4B or -6.0% in Q4 and down $62B or -7.1% in 2021) and Tax-exempt money market funds $94B, or 1.8% (down $3.4B or -3.5% in Q4 and down $20B or -17.3% last year).
