The Investment Company Institute released its latest monthly "Trends in Mutual Fund Investing" and "Month-End Portfolio Holdings of Taxable Money Funds" for February 2022 yesterday. The report confirms a drop in money fund assets in February. The monthly "Trends" report shows that money fund assets dropped $38.3 billion in February to $4.581 trillion. This follows a decrease of $136.1 billion in January, increases of $136.1 billion in December (coincidentally the exact same size as January's decline), $65.5 billion in November, $11.1 billion in October, $6.4 billion in September and $25.5 in August. MMFs decreased $24.4 billion in July and $73.4 billion in June, but increased $78.6 billion in May, $31.9 billion in April and $129.4 billion in March. For the 12 months through Feb. 28, 2022, money fund assets increased by $213.8 billion, or 4.9%. (Month-to-date in March through 3/29, MMF assets have increased by $16.6 billion to $5.002 trillion according to Crane's MFI Daily, which tracks a broader universe of funds.)
The monthly release states, "The combined assets of the nation's mutual funds decreased by $530.63 billion, or 2.1 percent, to $25.21 trillion in February, according to the Investment Company Institute's official survey of the mutual fund industry. In the survey, mutual fund companies report actual assets, sales, and redemptions to ICI.... Bond funds had an outflow of $34.51 billion in February, compared with an outflow of $13.47 billion in January.... Money market funds had an outflow of $37.59 billion in February, compared with an outflow of $136.14 billion in January. In February funds offered primarily to institutions had an outflow of $42.34 billion and funds offered primarily to individuals had an inflow of $4.75 billion."
The Institute's latest statistics show that Taxable funds and Tax Exempt MMFs both saw losses last month. Taxable MMFs decreased by $37 billion in February to $4.496 trillion. Tax-Exempt MMFs decreased $1.3 billion to $84.9 billion. Taxable MMF assets increased year-over-year by $229.9 billion (5.4%), while Tax-Exempt funds fell by $16.1 billion over the past year (-16.0%). Bond fund assets decreased by $89.2 billion in February to a $5.415 trillion, but they rose by $123.5 billion (2.3%) over the past year.
Money funds represent 18.0% of all mutual fund assets (up 0.1% from the previous month), while bond funds account for 21.8%, according to ICI. The total number of money market funds was 302, down 3 from the prior month and down from 331 a year ago. Taxable money funds numbered 243 funds, and tax-exempt money funds numbered 59 funds.
ICI's "Month-End Portfolio Holdings" confirms a drop in Treasuries last month and an increase in Repo. Repurchase Agreements remained the largest composition segment in February, increasing $11.0 billion, or 0.5%, to $2.138 trillion, or 47.6% of holdings. Repo holdings have increased $1.115 trillion, or 109.0%, over the past year. (See our March 10 News, "March MF Portfolio Holdings Flat: Repo Inches Higher, Treasuries Lower.)
Treasury holdings in Taxable money funds fell last month but remained the second largest composition segment. Treasury holdings decreased $13.8 billion, or -0.8%, to $1.694 trillion, or 37.7% of holdings. Treasury securities have decreased by $526.5 trillion, or -23.7%, over the past 12 months. U.S. Government Agency securities were the third largest segment; they decreased $7.3 billion, or -1.9%, to $371.6 billion, or 8.2% of holdings. Agency holdings have fallen by $244.6 billion, or -39.7%, over the past 12 months.
Certificates of Deposit (CDs) reclaimed fourth place; they increased by $4.4 billion, or 2.4%, to $188.2 billion (4.2% of assets). CDs held by money funds shrank by $10.6 billion, or -5.3%, over 12 months. Commercial Paper fell back to fifth place, but was up $2.0 billion, or 1.3%, to $147.3 billion (3.3% of assets). CP has decreased by $42.2 billion, or -22.3%, over one year. Other holdings increased to $26.4 billion (0.6% of assets), while Notes (including Corporate and Bank) inched higher to $3.5 billion (0.1% of assets).
The Number of Accounts Outstanding in ICI's series for taxable money funds increased to 48.536 million, while the Number of Funds dropped by 2 this past month to 243. Over the past 12 months, the number of accounts rose by 6.126 million and the number of funds decreased by 20. The Average Maturity of Portfolios was 28 days, 3 days lower than January. Over the past 12 months, WAMs of Taxable money have decreased by 18.
In related news, ICI also published the release, "Retirement Assets Total $39.4 Trillion in Fourth Quarter 2021," which includes data tables showing that money market funds held in retirement accounts inched lower to $529 billion in Q4'21, now accounting for 11% of the total $4.756 trillion in money funds. MMFs represent 4.2% of the total $12.578 trillion of mutual funds in retirement accounts.
The release says, "Total US retirement assets were $39.4 trillion as of December 31, 2021, up 4.5 percent from September and up 11.6 percent for the year. Retirement assets accounted for 33 percent of all household financial assets in the United States at the end of December 2021. Assets in individual retirement accounts (IRAs) totaled $13.9 trillion at the end of the fourth quarter of 2021, an increase of 4.3 percent from the end of the third quarter of 2021. Defined contribution (DC) plan assets were $11.0 trillion at the end of the fourth quarter, up 5.3 percent from September 30, 2021."
The ICI tables also show money funds accounting for $366 billion, or 6%, of the $6.210 trillion in IRA mutual fund assets, $110 billion, or 2%, of the $4.982 trillion in 401(k) plan assets, and $164 billion, or 3%, of the $6.368 trillion in defined contribution plan holdings.
