The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (a.k.a. "Flow of Funds") late last week. Among the 4 tables it includes on money market mutual funds, the Fourth Quarter 2022 edition shows that Total MMF Assets increased by $139 billion to $5.223 trillion in Q4'22. The Household Sector, by far the largest investor segment with $2.794 trillion, saw the biggest asset increase in Q4, followed closely by Nonfinancial Corporate Businesses. The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also showed noticeable increases for the Other Financial Business (formerly Funding Corps), the Life Insurance Companies and the Mutual Fund categories in Q4 2022. (Note: Crane Data's Money Fund Intelligence Daily shows money fund assets skyrocketing this week, increasing by $37.7 billion on Monday and $47.8 billion Tuesday to a record $5.376 trillion. Month-to-date, money fund assets are up an impressive $123.6 billion.)
The Property-Casualty Insurance, Private Pension Funds, State & Local Governments, Nonfinancial Noncorporate Business, the Rest of the World and the Exchange-traded fund categories saw small asset increases in Q4. The State & Local Govt Retirement category was the only one that saw an asset decrease last quarter. Over the past 12 months, the Private Pension Funds, Life Insurance Companies, Household Sector, Rest of World and Nonfinancial Corporate Business categories showed the biggest asset increases, while Other Financial Business, Household Sector, State & Local Govt Retirement and Property-Casualty Insurance saw the biggest asset decreases.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $139 billion, or 2.7%, in the fourth quarter to $5.223 trillion. The largest segment, the Household sector, totals $2.794 trillion, or 53.5% of assets. The Household Sector increased by $42 billion, or 1.5%, in the quarter. Over the past 12 months through December 31, 2022, Household assets were down $10 billion, or -0.4%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $819 billion, or 15.7% of the total. Assets here increased by $38 billion in the quarter, or 4.8%, and they've increased by $6 billion, or 0.8%, over the past year. Other Financial Business was the third-largest investor segment with $556 billion, or 10.6% of money fund shares. This category jumped $19 billion, or 3.5%, in the latest quarter. Other Financial Business, which we believe includes Securities Lending, has decreased by $35 billion, or -5.9%, over the previous 12 months.
The fourth-largest segment, Mutual Funds (a recent addition to the tables), held $270 billion (5.2%). Private Pension Funds, was the 5th largest category with 4.8% of money fund assets ($252 billion); it was up by $7 billion (2.6%) for the quarter and up $23 billion, or 10.0% over the last 12 months. The Rest of World remained sixth place in market share among investor segments with 3.5%, or $184 billion, while Nonfinancial Noncorporate Business held $126 billion (2.4%), Life Insurance Companies held $87 billion (1.7%), State & Local Governments held $56 billion (1.1%), Exchange-traded Funds held $35 billion (0.7%), Property-Casualty Insurance held $27 billion (0.5%), and State & Local Govt Retirement held $18 billion (0.3%) 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 “Security Repurchase Agreements” with $2.977 trillion, or 57.0% and "Debt Securities," or Credit Market Instruments, with $2.022 trillion, or 38.7% of the total. Debt securities includes: Open market paper ($254 billion, or 4.9%; we assume this is CP), Treasury securities ($1.064 trillion, or 20.4%), Agency and GSE-backed securities ($580 billion, or 11.1%), Municipal securities ($118 billion, or 2.3%) and Corporate and foreign bonds ($6 billion, or 0.1%).
Another large MMF position in the Fed's series includes `Time and savings deposits ($190 billion, or 3.6%). Money funds also hold minor positions in Miscellaneous assets ($33 billion, or 0.3%) and Foreign deposits ($1 billion, 0.0%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $43 billion.
During Q4, Debt Securities were down $91 billion. This subtotal included: Open Market Paper (up $8 billion), Treasury Securities (down $192 billion), Agency- and GSE-backed Securities (up $88 billion), Corporate and Foreign Bonds (unchanged) and Municipal Securities (up $5 billion). In the fourth quarter of 2022, Security Repurchase Agreements were up $233 billion, Foreign Deposits were unchanged, Time and Savings Deposits were down by $20 billion, and Miscellaneous Assets were up $17 billion.
Over the 12 months through 12/31/22, Debt Securities were down $547 billion, which included Open Market Paper (up $28B), Treasury Securities (down $751B), Agencies (up $170B), Municipal Securities (up $7B), and Corporate and Foreign Bonds (down $1B). Foreign Deposits (up $1B), Time and Savings Deposits were up $47B, Securities repurchase agreements were up $481 billion and Miscellaneous Assets were up $36B.
The L.121 table shows `Stable NAV money market funds with $4,589 billion, or 87.9% of the total (up $178.4 or 4.0% in Q4 and up $3B or 0.1% over 1-year), and Floating NAV money market funds with $634 billion, or 12.1% (down $39.7B or -5.9% in Q4 and up $15B or 2.4% over 1-year). Government money market funds total $4.064 trillion, or 77.8% (up $52.5B or 1.3% in Q4 and down $240B or -5.6% over 1-year), Prime money market funds total $1.040 trillion, or 19.9% (up $74.2B or 7.7% in Q4 and up $233B or 28.9% over 1-year) and Tax-exempt money market funds $119B, or 2.3% (up $12.2B or 11.4% in Q4 and up $25B or 26.3% last year).
The Federal Reserve made changes to the Z.1 tables four quarters ago. 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."
