The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (a.k.a. "Flow of Funds") on Thursday. Among the 4 tables it includes on money market mutual funds, the Second Quarter 2024 edition shows that Total MMF Assets increased by $107 billion to $6.547 trillion in Q2'24. The Household Sector, by far the largest investor segment with $4.128 trillion, saw the biggest asset increase in Q2, followed 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) and Mutual Funds categories in Q2 2024. (Note: For those attending our upcoming European Money Fund Symposium, which is Sept. 19-20, 2024 in London, safe travels! See you next week!)
Rest of World, Mutual funds, Exchange-traded funds, Life Insurance Companies, State & Local Governments and Nonfin Noncorporate Business categories saw small asset increases in Q2, while the State and local govt. retirement funds category saw the only asset decrease last quarter. Over the past 12 months, the Household Sector, Nonfinancial Corporate Business, Rest of World and Life Insurance Companies categories showed the biggest asset increases, while Exchange-traded funds saw the biggest asset decrease.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $107 billion, or 1.7%, in the second quarter to $6.547 trillion. The largest segment, the Household sector, totals $4.128 trillion, or 63.0% of assets. The Household Sector increased by $68 billion, or 1.7%, in the quarter. Over the past 12 months through June 30, 2024, Household assets were up $503 billion, or 13.9%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $922 billion, or 14.1% of the total. Assets here increased by $17 billion in the quarter, or 1.9%, and they've increased by $87 billion, or 10.4%, over the past year. Other Financial Business was the third-largest investor segment with $475 billion, or 7.2% of money fund shares. This category jumped $13 billion, or 2.7%, in the latest quarter. Other Financial Business, which we believe includes Securities Lending, has increased by $4 billion, or 0.7%, over the previous 12 months.
The fourth-largest segment, Mutual Funds (a recent addition to the tables), held $229 billion (3.5%). Private Pension Funds was the 5th largest category with 3.1% of money fund assets ($202 billion); it was unchanged for the quarter and up $1 billion, or 0.5% over the last 12 months. The Rest of World remained sixth place in market share among investor segments with 2.9%, or $189 billion, while Nonfinancial Noncorporate Business held $141 billion (2.1%), Life Insurance Companies held $97 billion (1.5%), State & Local Governments held $74 billion (1.1%), Property-Casualty Insurance held $43 billion (0.7%), Exchange-traded Funds held $30 billion (0.5%), and State & Local Govt Retirement held $20 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 $2.614 trillion, or 39.9% and "Debt Securities," or Credit Market Instruments, with $3.612 trillion, or 55.2% of the total. Debt securities includes: Open market paper ($282 billion, or 4.3%; we assume this is CP), Treasury securities ($2.450 trillion, or 37.4%), Agency and GSE-backed securities ($741 billion, or 11.3%), Municipal securities ($132 billion, or 2.0%) and Corporate and foreign bonds ($7 billion, or 0.1%).
Another large MMF position in the Fed's series includes `Time and savings deposits ($305 billion, or 4.7%). Money funds also hold minor positions in Miscellaneous assets ($12 billion, or 0.2%) and Foreign deposits ($5 billion, 0.1%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $45 billion.
During Q2, Debt Securities were down $131 billion. This subtotal included: Open Market Paper (down $34 billion), Treasury Securities (down $114 billion), Agency- and GSE-backed Securities (up $12 billion), Corporate and Foreign Bonds (up $1 billion) and Municipal Securities (up $4 billion). In the second quarter of 2024, Security Repurchase Agreements were up $232 billion, Foreign Deposits were unchanged, Time and Savings Deposits were down by $34 billion, and Miscellaneous Assets were up $38 billion.
Over the 12 months through 6/30/24, Debt Securities were up $1.219 trillion, which included Open Market Paper (up $18B), Treasury Securities (up $1.206T), Agencies (down $13B), Municipal Securities (up $11B), and Corporate and Foreign Bonds (down $3B). Foreign Deposits (up $2 billion), Time and Savings Deposits were up $38B, Securities repurchase agreements were down $619 billion and Miscellaneous Assets were down $10B.
The L.121 table shows `Stable NAV money market funds with $6,124 billion, or 93.5% of the total (up $344B or 6.0% in Q2 and up $858 trillion or 16.3% over 1-year), and Floating NAV money market funds with $424 billion, or 6.5% (down $237.4B or -35.9% in Q2 and down $228B or -34.9% over 1-year). Government money market funds total $5.226 trillion, or 79.8% (up $311.8B or 6.3% in Q2 and up $629B or 13.7% over 1-year), Prime money market funds total $1.188 trillion, or 18.1% (down $210.5B or -15.1% in Q2 and down $10B or -0.9% over 1-year) and Tax-exempt money market funds $133B, or 2.0% (up $5.1B or 4.0% in Q2 and up $11B or 9.1% last year).
The Federal Reserve made some changes to its Z.1 tables several years 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."
