ICI released its latest monthly "Money Market Fund Holdings" summary, which reviews the aggregate daily and weekly liquid assets, regional exposure, and maturities (WAM and WAL) for Prime and Government money market funds. The release says, "The Investment Company Institute (ICI) reports that, as of the final Friday in November, prime money market funds held 39.2 percent of their portfolios in daily liquid assets and 52.3 percent in weekly liquid assets, while government money market funds held 84.2 percent of their portfolios in daily liquid assets and 89.5 percent in weekly liquid assets." Prime DLA was up from 36.4% in October, and Prime WLA was down from 53.6%. Govt MMFs' DLA was down from 86.7% and Govt WLA decreased from 92.6% the previous month. (Thank you to our Money Fund University speakers, sponsors and attendees! We hope you enjoyed last week's show in Boston.... Attendees and subscribers may access the recordings and conference materials at the bottom of our "Content" page or via our "Money Fund University 2022 Download Center.")
ICI explains, "At the end of November, prime funds had a weighted average maturity (WAM) of 12 days and a weighted average life (WAL) of 51 days. Average WAMs and WALs are asset-weighted. Government money market funds had a WAM of 15 days and a WAL of 61 days." Prime WAMs were 3 days longer and WALs were 1 day shorter than the previous month. Govt WAMs were 1 day shorter and WALs were unchanged from October.
Regarding Holdings by Region of Issuer, the release tells us, "Prime money market funds' holdings attributable to the Americas rose from $268.54 billion in October to $284.14 billion in November. Government money market funds' holdings attributable to the Americas declined from $3,743.63 billion in October to $3,694.88 billion in November."
The Prime Money Market Funds by Region of Issuer table shows Americas-related holdings at $284.1 billion, or 47.0%; Asia and Pacific at $123.5 billion, or 20.4%; Europe at $190.8 billion, or 31.5%; and, Other (including Supranational) at $6.3 billion, or 1.1%. The Government Money Market Funds by Region of Issuer table shows Americas at $3.695 trillion, or 93.9%; Asia and Pacific at $81.0 billion, or 2.1%; Europe at $147.2 billion, 3.7%, and Other (Including Supranational) at $9.9 billion, or 0.3%.
A separate release from the Investment Company Institute tells us that, "Retirement Assets Total $32.3 Trillion in Third Quarter 2022." It includes data tables showing that money market funds held in retirement accounts rose to $581 billion (from $569 billion) in total, or 13% of the total $4.571 trillion in money funds. MMFs represent just 6.0% of the total $9.665 trillion of mutual funds in retirement accounts.
This release says, "Total US retirement assets were $32.3 trillion as of September 30, 2022, down 4.5 percent from June 30, 2022. Retirement assets accounted for 30 percent of all household financial assets in the United States at the end of September 2022. `Assets in individual retirement accounts (IRAs) totaled $11.0 trillion at the end of the third quarter of 2022, a decrease of 5.3 percent from the end of the second quarter of 2022. Defined contribution (DC) plan assets were $8.9 trillion at the end of the third quarter, down 5.0 percent from June 30, 2022. Government defined benefit (DB) plans—including federal, state, and local government plans—held $7.2 trillion in assets as of the end of September 2022, a 2.9 percent decrease from the end of June 2022. Private-sector DB plans held $3.0 trillion in assets at the end of the third quarter of 2022, and annuity reserves outside of retirement accounts accounted for another $2.1 trillion."
The ICI tables also show money funds accounting for $410 billion, or 9%, of the $4.801 trillion in IRA mutual fund assets and $171 billion, or 4%, of the $4.864 trillion in defined contribution plan holdings. (Money funds in 401k plans totaled $118 billion, or 3% of the $3.830 trillion of mutual funds in 401k's.)
In other news, The Wall Street Journal's CFO Journal writes, "The Morning Ledger: Fed Raises Rates Again, Signals More Increases to Come." They explain, "The Federal Reserve on Wednesday approved another interest-rate increase–this time of 0.5 percentage point–and signaled it plans to keep raising rates to fight high inflation. The decision marked a step down after four consecutive increases of 0.75 point and raised the benchmark federal-funds rate to a range between 4.25% and 4.5%. Fed Chair Jerome Powell indicated the U.S. central bank would strongly consider dialing down the size of rate rises to a more traditional quarter-percentage-point increment at its next meeting."
The piece comments, "There is an upside to higher interest rates, as finance chiefs are generating higher returns on their companies' cash holdings. Still, the amount of cash that companies are storing in corporate bank accounts is declining as high inflation takes its toll. Corporate cash holdings fell to $3.46 trillion during the third quarter, down $488 billion since the beginning of the year, according to an analysis of Fed data by the Carfang Group, which provides treasury consulting services."
It adds, "About 22.6% of corporate cash was held in money-market funds during the third quarter, a level last seen in 2016, according to Carfang. Those funds -- a form of mutual fund that invests in short-term debt securities including Treasury bills and commercial paper -- provided an average yield of 3.63% as of Dec. 9, compared with 0.02% in December 2021, according to Crane Data, which tracks money-market funds. Total assets, at $5.169 trillion, were largely unchanged from December 2021, Crane Data said."
