The Investment Company Institute released its latest monthly "Trends in Mutual Fund Investing" and "Month-End Portfolio Holdings of Taxable Money Funds" for January 2023 Monday. ICI's monthly "Trends" report shows that money fund assets increased $31.5 billion in January to a record $4.808 trillion. Meanwhile, bond fund assets rebounded, increasing $146.2 billion to $4.638 trillion. Money fund assets, which surpassed bond fund assets in September 2022 for the first time since 2010, saw their lead over bond funds shrink last month. MMFs have increased by $188.6 billion over the past 12 months. (The bond fund totals don't include bond ETFs, which total $1.317 trillion as of 1/31, according to ICI.)
Money funds' January asset increase follows a gain of $105.3 billion in December, $63.4 billion in November, $36.8 billion in October and $4.2 billion in Sept. MMFs decreased $6.4 billion in August, but they increased $34.3 billion in July and $25.0 billion in June. MMFs decreased $8.0 billion in May and $71.0 billion in April. They increased $9.6 billion in March, decreased $38.3 billion in February, and decreased $136.1 billion last January. For the 12 months through Jan. 31, 2023, money fund assets increased by $188.6 billion, or 4.1%. (For the month of February through 2/24, MMF assets have increased by $27.9 billion to $5.213 trillion according to Crane's MFI XLS, which tracks a broader universe of funds than ICI. Crane Data's Prime asset totals have increased by $52.8 billion in February to $1.152 trillion.)
ICI's monthly release states, "The combined assets of the nation's mutual funds increased by $1.03 trillion, or 4.7 percent, to $23.14 trillion in January, 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 inflow of $17.56 billion in January, compared with an outflow of $53.28 billion in December.... Money market funds had an inflow of $22.25 billion in January, compared with an inflow of $96.43 billion in December. In January funds offered primarily to institutions had an outflow of $33.04 billion and funds offered primarily to individuals had an inflow of $55.29 billion."
The Institute's latest statistics show that both Taxable and Tax Exempt MMFs were higher last month. Taxable MMFs increased by $31.4 billion in January to $4.696 trillion. Tax-Exempt MMFs increased $0.1 billion to $112.5 billion. Taxable MMF assets increased year-over-year by $162.3 billion (3.6%), and Tax-Exempt funds rose by $26.3 billion over the past year (30.5%). Bond fund assets increased by $146.2 billion (after dropping by $73.4 billion in Dec.) to $4.638 trillion; they've decreased by $866.2 billion (-15.7%) over the past year.
Money funds represent 20.8% of all mutual fund assets (down 0.8% from the previous month), while bond funds account for 20.0%, according to ICI. The total number of money market funds was 281, down ten from the prior month and down from 305 a year ago. Taxable money funds numbered 232 funds, and tax-exempt money funds numbered 49 funds.
ICI's "Month-End Portfolio Holdings" confirm a drop in Repo and plunge in Treasuries last month. Repurchase Agreements remained the largest composition segment in January, decreasing $9.3 billion, or -0.3%, to $2.653 trillion, or 56.5% of holdings. Repo holdings have increased $525.5 billion, or 24.7%, over the past year. (See our Feb. 10 News, "Feb. MF Portfolio Holdings: Repo and T-Bills Fall; TDs, CP, CDs All Jump.")
Treasury holdings in Taxable money funds fell again, but they remained the second largest composition segment. Treasury holdings plunged $96.7 billion, or -8.9%, to $991.7 billion, or 21.1% of holdings. Treasury securities have decreased by $716.5 billion, or -41.9%, over the past 12 months. U.S. Government Agency securities were the third largest segment; they increased $28.0 billion, or 5.3%, to $560.2 billion, or 11.9% of holdings. Agency holdings have increased by $187.6 billion, or 50.4%, over the past 12 months.
Certificates of Deposit (CDs) remained in fourth place; they increased by $72.9 billion, or 42.6%, to $244.0 billion (5.2% of assets). CDs held by money funds rose by $60.1 billion, or 32.7%, over 12 months. Commercial Paper remained in fifth place, up $31.3 billion, or 18.3%, to $202.0 billion (4.3% of assets). CP increased $56.7 billion, or 39.0%, over one year. Other holdings decreased to $15.6 billion (0.3% of assets), while Notes (including Corporate and Bank) inched up to $4.8 billion (0.1% of assets).
The Number of Accounts Outstanding in ICI's series for taxable money funds decreased to 59.008 million, while the Number of Funds fell by four funds to 232. Over the past 12 months, the number of accounts rose by 10.734 million and the number of funds decreased by 13. The Average Maturity of Portfolios was a record low 14 days, unchanged from December. Over the past 12 months, WAMs of Taxable money have decreased by 17.
