The Investment Company Institute's latest "Money Market Fund Assets" report shows MMF assets hitting record levels for the fifth week in a row after a brief pause in mid-June and early July. ICI's asset series hit a record $5.570 trillion, after breaking the $5.5 trillion level two weeks ago, and shows MMFs up over $1.0 trillion, or 22.1%, over the past year. Assets are up by $835 billion, or 17.6%, year-to-date in 2023 (and up $749.5 billion, or 15.5%, since 2/22/23), with Institutional MMFs up $437 billion, or 14.3% and Retail MMFs up $398 billion, or 23.7%. Over the past 52 weeks, money fund assets have risen $1.008 trillion, or 22.1%, with Retail MMFs rising by $592 billion (39.9%) and Inst MMFs rising by $416 billion (13.5%). (Note: Please join us next month for our European Money Fund Symposium, Sept. 25-26, 2024 in Edinburgh. Make your hotel reservations ASAP -- our discount expires this week!)
Their weekly release says, "Total money market fund assets increased by $39.70 billion to $5.57 trillion for the week ended Wednesday, August 16, the Investment Company Institute reported.... Among taxable money market funds, government funds increased by $37.30 billion and prime funds increased by $5.08 billion. Tax-exempt money market funds decreased by $2.69 billion." ICI's stats show Institutional MMFs jumping $24.1 billion and Retail MMFs rising $15.6 billion in the latest week. Total Government MMF assets, including Treasury funds, were $4.586 trillion (82.3% of all money funds), while Total Prime MMFs were $869.9 billion (15.6%). Tax Exempt MMFs totaled $113.6 billion (2.0%).
ICI explains, "Assets of retail money market funds increased by $15.61 billion to $2.08 trillion. Among retail funds, government money market fund assets increased by $11.00 billion to $1.38 trillion, prime money market fund assets increased by $6.83 billion to $596.59 billion, and tax-exempt fund assets decreased by $2.23 billion to $102.79 billion." Retail assets account for over a third of total assets, or 37.3%, and Government Retail assets make up 66.3% of all Retail MMFs.
They add, "Assets of institutional money market funds increased by $24.09 billion to $3.49 trillion. Among institutional funds, government money market fund assets increased by $26.30 billion to $3.21 trillion, prime money market fund assets decreased by $1.75 billion to $273.27 billion, and tax-exempt fund assets decreased by $468 million to $10.79 billion." `Institutional assets accounted for 62.7% of all MMF assets, with Government Institutional assets making up 91.9% of all Institutional MMF totals.
According to Crane Data's separate Money Fund Intelligence Daily series, money fund assets broke the $5.9 trillion level on August 1 and hit a record $5.967 trillion on Tuesday, 8/15, before easing back to $5.955 trillion Wednesday. Assets have risen by $74.0 billion in August through 8/16 after rising by $34.7 billion in July. Note that ICI's asset totals don't include a number of funds tracked by the SEC and Crane Data, so they're over $400 billion lower than Crane's asset series.
In other news, State Street Global Advisors published a "Monthly Cash Review - July 2023," entitled, "Summer-End Blues Like Central Bank Woes." They write, "Since the debt ceiling resolution two months ago, T-Bill issuance has increased. T-Bill yields have also increased and become even more attractive for money market funds, leading to a decline in the usage of the Fed's reverse repurchase agreement (RRP) in favor of purchasing those T-Bills. This trend should continue as the US Treasury continues to grow its general account balance and, overall, increase T-Bill issuance as a percent of its overall indebtedness. The Fed should be pleased with the reduced reliance on the RRP as it would prefer not to be the 'lender of last resort.' The RRP is a critical tool in the Fed's management of monetary policy and without that facility it would be very difficult to control short-term rates."
They also tell us, "Meanwhile, Money Market Fund Reform was announced two weeks ago, and, overall, the regulatory changes seem reasonable. The SEC stepped back on the proposed swing pricing rule and opted instead for a liquidity fee. Additionally, it increased the size that a redemption must be to activate that liquidity fee. Lastly, it increased the amount of liquidity that funds would need to hold and included a reverse distribution mechanism in the event yields on funds turned negative. We will be publishing a more detailed report on the reform soon."
SSGA adds, "This year's Jackson Hole symposium, titled 'Structural Shifts in the Global Economy,' is set to take place from August 24-26. I am sure there will be no shortage of headlines. As summer comes to a close, we all hope for a few more good days at the beach, pool or pond (pond would be good for you). Let us hope we all do not get carried away and try to squeeze too much from the remaining days. We can hope that central banks do the same." (Note: Crane Data's Peter Crane will be out in Jackson, Wy., late next week too trying to buy drinks for any Central Bankers he sees, so let us know if you're in the area!)
The Public Funds Investment Institute writes in a recent brief that, "CalTRUST, a California LGIP, has a new investment manager. State Street Global Advisors replaced BlackRock as of August 1. It's the first entry of Sate Street into the LGIP industry."
